DoD's $31.2M optical instrument contract awarded to DRS Network & Imaging Systems LLC with no competition

Contract Overview

Contract Amount: $31,205,241 ($31.2M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2019-03-26

End Date: 2021-07-23

Contract Duration: 850 days

Daily Burn Rate: $36.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TARGET ACQUISITION

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $31.2 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: TARGET ACQUISITION Key points: 1. The contract value of $31.2 million represents a significant investment in specialized optical equipment. 2. Awarded on a sole-source basis, the lack of competition raises questions about potential price overruns and limited market exploration. 3. The contract duration of 850 days (approximately 2.3 years) suggests a need for sustained supply of these critical components. 4. The geographic location of performance in Florida (FL) may indicate specific operational requirements or existing infrastructure. 5. The fixed-price contract type aims to control costs, but the absence of competition could undermine this objective. 6. The contractor, DRS Network & Imaging Systems LLC, is a key player in the defense optics sector.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source award and lack of publicly available comparable contract data. The fixed-price nature provides some cost control, but without competitive bids, it's difficult to ascertain if the $31.2 million represents a fair market price. Further analysis would require access to detailed cost breakdowns and comparisons with similar sole-source awards for comparable optical systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, DRS Network & Imaging Systems LLC, was considered. This approach bypasses the standard competitive bidding process, which typically involves multiple companies submitting proposals. The lack of competition suggests potential reasons such as unique capabilities of the contractor, urgent need, or limited market availability of the required optical instruments.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to secure government contracts.

Public Impact

The Department of Defense is the primary beneficiary, receiving advanced optical instruments essential for its operations. The services delivered include the provision of specialized optical equipment, likely for surveillance, targeting, or imaging systems. Performance is concentrated in Florida, potentially supporting regional military installations or research facilities. The contract supports the workforce within DRS Network & Imaging Systems LLC and its supply chain, particularly in the optical instrument manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated pricing compared to a competitive procurement.
Sole-source awards can limit innovation by not engaging a broader range of suppliers.
Transparency concerns arise due to the absence of a competitive bidding process.
Dependence on a single supplier could create supply chain risks if the contractor faces production issues.

Positive Signals

The fixed-price contract type offers some cost certainty for the government.
The contractor, DRS Network & Imaging Systems LLC, is likely an established provider with relevant expertise in optical systems.
The contract duration suggests a stable, long-term need for these specific optical instruments.

Sector Analysis

The optical instrument and lens manufacturing sector (NAICS 333314) is critical for defense, scientific research, and various industrial applications. This contract falls within a niche segment of this industry, focusing on specialized equipment likely for defense purposes. The total market size for defense-related optical systems is substantial, driven by ongoing modernization efforts and operational requirements. Comparable spending benchmarks are difficult to establish without more specific details on the exact type of optical instruments procured.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary awardee, DRS Network & Imaging Systems LLC, is expected to fulfill the contract requirements directly or through its own resources, potentially limiting opportunities for small businesses to participate in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and financial accountability. The Department of Defense's Inspector General may also conduct audits or investigations into sole-source procurements to ensure fairness and prevent waste. Transparency is limited due to the sole-source nature, but contract award data is publicly available through systems like FPDS.

Related Government Programs

Defense Logistics Agency Procurement
Department of Defense Optical Systems
Sole-Source Defense Contracts
Optical Instrument Manufacturing

Risk Flags

Sole-source award lacks competition
Potential for price overruns due to lack of competition
Limited transparency in procurement process
No explicit small business subcontracting requirements noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.2 million to DRS NETWORK & IMAGING SYSTEMS LLC. TARGET ACQUISITION

Who is the contractor on this award?

The obligated recipient is DRS NETWORK & IMAGING SYSTEMS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $31.2 million.

What is the period of performance?

Start: 2019-03-26. End: 2021-07-23.

What specific types of optical instruments were procured under this contract, and what are their intended military applications?

The provided data does not specify the exact types of optical instruments. However, given the contractor's specialization (DRS Network & Imaging Systems LLC) and the awarding agency (Department of Defense), these instruments likely include advanced components such as night vision devices, thermal imagers, targeting pods, reconnaissance optics, or specialized lenses for various military platforms (e.g., aircraft, ground vehicles, soldier systems). Their applications would range from enhanced situational awareness and target acquisition in low-light or adverse conditions to intelligence gathering and precision engagement.

What is the justification for awarding this contract on a sole-source basis, and were any alternatives considered?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent requirements that only a specific contractor can meet. For this contract, the Department of Defense likely determined that DRS Network & Imaging Systems LLC possessed the sole ability to provide the required optical instruments, possibly due to specialized manufacturing processes, existing system integration, or intellectual property. While the data indicates 'NOT COMPETED,' a formal justification and approval (J&A) document would have been required, detailing why full and open competition was not feasible or not in the government's best interest. Alternatives might have been considered but deemed unsuitable or less advantageous.

How does the contract's fixed-price structure mitigate risks associated with a sole-source award?

A Firm Fixed Price (FFP) contract structure aims to shift cost risk to the contractor. In theory, this means the government pays a set price regardless of the contractor's actual costs. This can provide cost certainty for the government, especially in a sole-source situation where competitive benchmarking is absent. However, the effectiveness of FFP in a sole-source context is limited. If the contractor's costs are significantly lower than the negotiated fixed price, the government may overpay. Conversely, if costs are higher, the contractor may face financial strain, potentially impacting delivery or quality. Robust negotiation and oversight are still crucial to ensure the fixed price reflects fair value.

What is the track record of DRS Network & Imaging Systems LLC in fulfilling similar defense contracts, particularly sole-source awards?

DRS Network & Imaging Systems LLC, a subsidiary of Leonardo DRS, has a long history of providing advanced technology solutions to the U.S. military, including a wide range of electro-optical and infrared systems. They are a significant defense contractor with numerous awards across various agencies and contract types. While specific details on their sole-source award history are not provided here, their established presence and expertise in the defense sector suggest they have experience managing complex contracts. A deeper dive into their contract performance history, including any past issues or successes with sole-source procurements, would be necessary for a comprehensive assessment.

What are the potential implications of this contract's duration (850 days) on the government's long-term strategy for optical systems?

The contract duration of 850 days (approximately 2.3 years) indicates a sustained need for the specific optical instruments being procured. This suggests that these systems are integral to current military operations or planned deployments and are not considered short-term or easily replaceable solutions. It implies a level of strategic planning by the Department of Defense regarding its optical capabilities. However, it also raises questions about the government's long-term strategy: Is this a stop-gap measure, or are these systems intended for extended use? The duration could also influence future upgrade or replacement decisions, potentially locking the government into this technology or supplier for a significant period.

Are there any publicly available performance metrics or quality assurance reports related to this contract?

The provided data does not include specific performance metrics or quality assurance reports for this contract. Such information is typically generated during contract execution and may be held internally by the awarding agency (Department of Defense/Defense Logistics Agency) or made available through specific government reporting portals or Inspector General reports, often with a time lag. Without access to these detailed reports, it is difficult to assess the contractor's performance quality, adherence to specifications, and overall effectiveness in delivering the required optical instruments.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRRA218R0032

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 100 N BABCOCK ST, MELBOURNE, FL, 32935

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,205,241

Exercised Options: $31,205,241

Current Obligation: $31,205,241

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $3,612,658

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline