Army Awards $17.5M for Cryptographic Devices to Sierra Nevada Company, LLC

Contract Overview

Contract Amount: $17,460,696 ($17.5M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2025-05-20

End Date: 2026-12-11

Contract Duration: 570 days

Daily Burn Rate: $30.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS DELIVERY ORDER IS FOR SHIPMENT OF SIMPLE KEY LOADER (SKL) CRYPTOGRAPHIC DEVICES.

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to SIERRA NEVADA COMPANY, LLC for work described as: THIS DELIVERY ORDER IS FOR SHIPMENT OF SIMPLE KEY LOADER (SKL) CRYPTOGRAPHIC DEVICES. Key points: 1. The contract is for Simple Key Loaders (SKL) cryptographic devices. 2. Sierra Nevada Company, LLC is the sole awardee. 3. The contract value is $17,460,696. 4. The period of performance is from May 20, 2025, to December 11, 2026.

Value Assessment

Rating: fair

The contract value of $17.5M for cryptographic devices appears to be within a reasonable range for specialized hardware. However, without specific unit counts or detailed specifications, a precise benchmark is difficult. Further analysis of similar procurements for SKL devices would be needed for a more definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process. The justification for sole-source procurement is not provided.

Taxpayer Impact: The lack of competition may result in higher costs for taxpayers, as there was no market pressure to drive down the price of these cryptographic devices.

Public Impact

Ensures the Department of the Army has necessary cryptographic devices for secure communications. Supports national security by providing critical technology for information protection. Potential for increased costs due to sole-source award impacts taxpayer funds.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Lack of justification for sole-source procurement.

Positive Signals

Procurement of essential cryptographic devices.
Award to a known entity (Sierra Nevada Company, LLC).

Sector Analysis

The procurement falls under the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector (NAICS 334220). Spending in this sector can vary widely based on technological advancements and defense needs. This specific award is for specialized cryptographic hardware, a niche within the broader communications equipment industry.

Small Business Impact

This award was not made to a small business. There is no indication of subcontracting opportunities for small businesses within this sole-source contract.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny. Oversight should focus on the justification for not competing the requirement and ensuring the price is fair and reasonable despite the lack of competition.

Related Government Programs

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to SIERRA NEVADA COMPANY, LLC. THIS DELIVERY ORDER IS FOR SHIPMENT OF SIMPLE KEY LOADER (SKL) CRYPTOGRAPHIC DEVICES.

Who is the contractor on this award?

The obligated recipient is SIERRA NEVADA COMPANY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $17.5 million.

What is the period of performance?

Start: 2025-05-20. End: 2026-12-11.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?

The justification for a sole-source award is crucial for understanding why competition was bypassed. Agencies typically need to demonstrate that only one responsible source can provide the required supplies or services. Without this justification, it's difficult to assess if the government received the best possible value. Ensuring price reasonableness often involves market research, historical pricing, or independent government cost estimates, even in sole-source situations.

What is the specific functionality and criticality of these Simple Key Loaders (SKL) that necessitates a sole-source procurement?

SKLs are critical for securely managing and distributing cryptographic keys used in military communication systems. Their specialized nature and the need for interoperability with existing secure networks might lead to a sole-source determination if only one vendor's product meets stringent security and compatibility requirements. Understanding the specific technical requirements and the vendor's unique capabilities is key to validating this necessity.

What is the long-term strategy for acquiring SKL devices, and will future procurements be competed to ensure better pricing and innovation?

The long-term strategy for acquiring essential equipment like SKLs is vital for sustained operational capability and cost-effectiveness. If this sole-source award is a one-time necessity, future plans should outline a path towards competitive procurement. This could involve market research for alternative solutions, developing new specifications, or fostering a more competitive market to drive innovation and reduce taxpayer burden over time.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Nevada Corporation

Address: 444 SALOMON CIR, SPARKS, NV, 89434

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

Financial Breakdown

Contract Ceiling: $17,460,696

Exercised Options: $17,460,696

Current Obligation: $17,460,696

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $206,811

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T20D0030

IDV Type: IDC

Timeline