DoD awards $21.6M sole-source contract for circuit boards, raising value-for-money questions

Contract Overview

Contract Amount: $21,564,396 ($21.6M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-12

End Date: 2029-05-31

Contract Duration: 1,357 days

Daily Burn Rate: $15.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NOUN: TARGET ACQUISITIONS NSN: 5865-01-721-1219 P/N: 13748000

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $21.6 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: NOUN: TARGET ACQUISITIONS NSN: 5865-01-721-1219 P/N: 13748000 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long contract duration of over three years may impact price stability. 3. Fixed-price contract type shifts performance risk to the contractor. 4. No small business set-aside noted, potentially limiting broader participation. 5. Awarded by the Defense Logistics Agency, indicating a focus on defense readiness. 6. Geographic location in Florida may have implications for regional economic impact.

Value Assessment

Rating: questionable

The contract value of $21.6 million for bare printed circuit boards appears high given the sole-source nature and lack of competitive benchmarking. Without multiple bids, it's difficult to ascertain if this represents a fair market price. The fixed-price structure is standard, but the overall value proposition is weakened by the absence of competition. Further analysis would require comparing this to similar sole-source procurements or industry benchmarks for circuit board manufacturing, which are not readily available in this data.

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 solicited. This significantly limits price discovery and competitive pressure, which typically drives down costs for the government. The rationale for a sole-source award is not provided, but it suggests a potential lack of available qualified sources or a specific, urgent need that only this contractor could meet.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government foregoes the benefits of a competitive bidding process. This means taxpayer funds may not be utilized as efficiently as they could be under a more open competition.

Public Impact

The primary beneficiary is DRS Network & Imaging Systems LLC, securing a significant contract. The contract supports the Department of Defense's need for critical electronic components. The geographic impact is concentrated in Florida, where the contractor is located. Workforce implications are likely within DRS Network & Imaging Systems, potentially requiring skilled labor for circuit board manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency regarding the justification for sole-source procurement.
Long contract duration could lead to price escalation if market conditions change.
No indication of small business subcontracting goals, potentially limiting opportunities for smaller firms.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Award to an established entity (DRS Network & Imaging Systems LLC) may indicate reliability.
Contract supports critical defense needs, ensuring operational readiness.

Sector Analysis

The procurement falls within the broader electronics manufacturing sector, specifically focusing on printed circuit boards (PCBs). This is a critical component for a wide range of electronic devices, including those used in defense applications. The market for PCBs is competitive, but specialized or high-reliability boards, particularly for defense, can command premium pricing. This contract's value of $21.6 million is significant for a single award, but within the context of defense spending, it represents a specific component need rather than a large-scale program.

Small Business Impact

This contract does not appear to have been set aside for small businesses, nor is there an indication of a small business subcontracting plan. This means that opportunities for small businesses to participate in this specific procurement, either as prime contractors or subcontractors, are not explicitly mandated by the award terms. The absence of set-asides could limit the broader economic impact on the small business ecosystem within the defense supply chain for this particular contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring contractor performance and financial accountability. The Department of Defense's Inspector General may also conduct audits or investigations if specific concerns arise regarding waste, fraud, or abuse. Transparency is limited due to the sole-source nature, but contract award data is publicly available.

Related Government Programs

Department of Defense Electronics Procurement
Defense Logistics Agency Supply Chain Management
Printed Circuit Board Manufacturing Services
Sole-Source Defense Contracts

Risk Flags

Sole-source award may lead to higher costs.
Lack of competitive bidding limits price discovery.
Long contract duration increases potential for market volatility impact.
No explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.6 million to DRS NETWORK & IMAGING SYSTEMS LLC. NOUN: TARGET ACQUISITIONS NSN: 5865-01-721-1219 P/N: 13748000

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 $21.6 million.

What is the period of performance?

Start: 2025-09-12. End: 2029-05-31.

What is the track record of DRS Network & Imaging Systems LLC with the Department of Defense?

DRS Network & Imaging Systems LLC, a subsidiary of Leonardo DRS, has a substantial history of contracting with the U.S. Department of Defense. They are known for providing a wide range of defense electronics, including electro-optical/infrared systems, network-centric solutions, and aviation electronics. Their contract history with the DoD is extensive, encompassing numerous awards across various platforms and systems. While this specific contract is for bare printed circuit boards, the company's broader portfolio suggests significant experience in complex defense systems integration and manufacturing. Analyzing past performance on similar contracts, particularly those involving electronic components and manufacturing, would provide further insight into their reliability and quality.

How does the $21.6 million value compare to similar bare printed circuit board contracts?

Benchmarking the $21.6 million value for bare printed circuit boards is challenging without more specific technical details and contract terms. However, given that this is a sole-source award from the Defense Logistics Agency (DLA) to DRS Network & Imaging Systems LLC, it is plausible that the price reflects specialized requirements, high reliability standards, or specific technological needs that limit competition. Standard commercial bare PCBs can range significantly in price based on complexity, materials, and volume. For defense applications, costs are often higher due to stringent quality control, testing, and certification requirements. Without access to comparable sole-source awards or detailed market research data from the DLA, it's difficult to definitively state if this price is above, below, or in line with market rates for similar specialized defense-grade PCBs.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. When only one vendor is solicited, the government loses the leverage that competition provides to secure the best possible price. Another risk is contractor performance; while DRS Network & Imaging Systems LLC has a history with the DoD, any sole-source award carries an inherent risk if the contractor fails to deliver on time, within budget, or to the required quality standards, as there are no immediate alternative sources readily available. Furthermore, the long duration (over three years) increases the risk of price changes or obsolescence if market conditions or technological requirements shift significantly during the contract period.

What is the expected program effectiveness or outcome?

The expected outcome of this contract is the reliable supply of bare printed circuit boards to support Department of Defense systems. The effectiveness hinges on DRS Network & Imaging Systems LLC's ability to consistently deliver high-quality PCBs that meet stringent defense specifications throughout the contract period (ending May 2029). These circuit boards are fundamental components for various electronic systems, and their timely and quality delivery is crucial for maintaining the operational readiness and technological superiority of defense platforms. The effectiveness will be measured by the contractor's adherence to delivery schedules, quality standards, and the overall performance of the supplied components within the end-use systems.

How does this contract fit into the broader historical spending patterns for circuit boards by the DoD?

This $21.6 million contract represents a specific, albeit significant, procurement within the DoD's vast electronics and components spending. Historically, the DoD spends billions annually on electronic systems and components, including a substantial portion dedicated to circuit boards and related manufacturing. While individual contracts for specific components like bare PCBs may fluctuate year-to-year based on program needs and lifecycle stages, the overall demand for such items remains consistent due to the continuous need for military hardware sustainment, modernization, and new platform development. This contract aligns with historical spending patterns by addressing a fundamental component requirement for defense systems, likely supporting ongoing sustainment or specific platform upgrades.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Bare Printed Circuit Board Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

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: $21,564,396

Exercised Options: $21,564,396

Current Obligation: $21,564,396

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $1,497,043

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRRA220D0012

IDV Type: IDC

Timeline