DoD's $18.6M EPIAFS System contract awarded to Alliant Techsystems Operations LLC for electronic components

Contract Overview

Contract Amount: $18,652,842 ($18.7M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2007-07-19

End Date: 2014-11-28

Contract Duration: 2,689 days

Daily Burn Rate: $6.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PRODUCTION OF EPIAFS SYSTEM

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: PRODUCTION OF EPIAFS SYSTEM Key points: 1. The contract's value of $18.6 million over its duration suggests a significant investment in specialized electronic systems. 2. Awarded under full and open competition, this contract likely benefited from a competitive bidding process to ensure fair pricing. 3. The fixed-price nature of the contract shifts performance risk to the contractor, potentially leading to cost certainty for the government. 4. The contract duration of approximately 7.5 years indicates a long-term need for the EPIAFS system or its components. 5. The North American Industry Classification System (NAICS) code 334419 points to a focus on manufacturing electronic components, a critical part of modern defense systems. 6. The contract was awarded by the Department of the Army, highlighting its importance within the Army's operational infrastructure.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the EPIAFS system's capabilities and market demand for its components. However, the $18.6 million awarded over nearly seven and a half years suggests a moderate per-year expenditure. The fixed-price contract type implies that the contractor assumed the risk of cost overruns, which can be a positive indicator of value if the contractor successfully managed their expenses. Further analysis would require comparing the system's performance and cost against similar technological solutions or previous iterations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The presence of 3 bidders, as indicated by the data, suggests a reasonable level of competition, though more bidders would generally lead to stronger price discovery and potentially lower costs for the government.

Taxpayer Impact: A full and open competition generally benefits taxpayers by promoting a more efficient allocation of resources and driving down prices through market forces. This ensures that the government is not overpaying for goods or services due to a lack of viable alternatives.

Public Impact

The primary beneficiaries of this contract are the Department of Defense, specifically the Department of the Army, who will utilize the EPIAFS system. The services delivered involve the production of electronic components for the EPIAFS system, crucial for military operations. The contract's performance location in West Virginia (WV) suggests a potential economic impact and job creation within that state. The workforce implications include employment opportunities for individuals skilled in electronic component manufacturing and related technical fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the EPIAFS system's functionality makes it difficult to assess its true necessity and potential for obsolescence.
The long contract duration could lead to potential cost inefficiencies if technology evolves rapidly and the system becomes outdated.
Limited information on the number of bidders (3) raises questions about the extent of competition and whether optimal pricing was achieved.
The fixed-price contract, while shifting risk, could incentivize the contractor to cut corners on quality if not rigorously overseen.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Fixed-price contract type transfers cost overrun risk to the contractor.
The contract supports a critical defense system, indicating a clear government need.
Performance in West Virginia may provide economic benefits to the local region.

Sector Analysis

The contract falls within the electronic component manufacturing sector, a vital part of the broader electronics industry. This sector is characterized by rapid technological advancements and significant global competition. The market size for electronic components is vast, driven by demand from defense, consumer electronics, telecommunications, and automotive industries. This specific contract, for the EPIAFS system, represents a niche but critical application within the defense sub-sector, requiring specialized manufacturing capabilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor, Alliant Techsystems Operations LLC, may engage small businesses as subcontractors for specialized services or components, though this is not mandated by the contract's structure. The absence of a small business set-aside means the primary focus was on securing the best overall offer from the entire market.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed performance reports may be internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Production Act Investments
Electronic Warfare Systems
Military Communication Systems
Advanced Manufacturing Initiatives
Department of Defense Procurement

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Limited number of bidders (3) could indicate potential for suboptimal price discovery.
Fixed-price contract requires strong oversight to ensure quality is not compromised.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. PRODUCTION OF EPIAFS SYSTEM

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS 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 $18.7 million.

What is the period of performance?

Start: 2007-07-19. End: 2014-11-28.

What is the specific function and importance of the EPIAFS system within the Department of the Army's operations?

The provided data does not specify the exact function of the EPIAFS (Electronic Production Information and Field Support) system. However, given its classification under 'Other Electronic Component Manufacturing' and its award to a defense contractor, it is highly probable that the EPIAFS system is a critical piece of electronic hardware or software used for military operations, intelligence gathering, or logistical support. Its production under a significant contract suggests it plays a vital role in maintaining or enhancing the Army's technological capabilities, potentially in areas like command and control, surveillance, or electronic warfare. Without further details, its precise impact remains speculative but is presumed to be operationally significant.

How does the $18.6 million contract value compare to similar procurements for electronic component manufacturing in the defense sector?

Comparing the $18.6 million contract value requires context regarding the specific type and complexity of electronic components procured. For large-scale, specialized defense systems, $18.6 million over approximately 7.5 years (2689 days) represents a moderate investment. Contracts for major defense platforms or highly advanced technological systems can range into the hundreds of millions or billions of dollars. Conversely, contracts for more common or less complex electronic parts might be significantly smaller. This contract's value suggests it is for a specific, likely custom-designed, component or system rather than a mass-produced item. Benchmarking would necessitate identifying contracts for comparable systems or components with similar technical specifications and production volumes.

What are the potential risks associated with a firm-fixed-price contract for electronic component manufacturing, especially over a long duration?

A firm-fixed-price (FFP) contract shifts the risk of cost overruns to the contractor. For electronic component manufacturing, potential risks include the contractor underestimating material costs, labor, or production complexities, leading to financial strain for the contractor. Over a long duration (2689 days), there's also a risk of technological obsolescence; if the components become outdated, the contractor might struggle to fulfill the contract profitably or the government might receive a less relevant product. Another risk is the contractor potentially compromising quality to maintain profitability under the fixed price, necessitating robust government oversight and quality assurance processes. Conversely, if the contractor accurately estimates costs and manages production efficiently, FFP can provide cost certainty for the government.

Given the 'Other Electronic Component Manufacturing' NAICS code, what is the typical market landscape and competitive intensity for such procurements?

The NAICS code 334419, 'Other Electronic Component Manufacturing,' covers a broad range of products, including semiconductors, passive components, and specialized electronic parts not elsewhere classified. The market landscape is diverse, featuring large multinational corporations and smaller specialized manufacturers. Competitive intensity can vary significantly depending on the specific component. For highly specialized or custom-designed components required by the defense sector, competition might be more limited to firms with specific expertise and security clearances. However, for more standardized components, competition can be fierce. The fact that this contract was awarded under 'full and open competition' with 3 bidders suggests a moderately competitive environment for this particular EPIAFS system component.

What does the contract's performance location in West Virginia (WV) imply for the local economy and potential workforce development?

A contract performance location in West Virginia (WV) suggests potential positive economic impacts for the state. This could include job creation in the manufacturing sector, particularly for roles requiring skills in electronics production, engineering, and quality control. It may also stimulate local supply chains, benefiting businesses that provide raw materials, logistics, or support services. Furthermore, such a contract could encourage workforce development initiatives, such as training programs or partnerships with educational institutions, to ensure a skilled labor pool is available to meet the contractor's needs. The presence of a significant federal contract can also enhance the state's reputation as a hub for advanced manufacturing.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W15QKN07R0300

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 210 STATE ROUTE 956, KEYSER, WV, 02

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,652,842

Exercised Options: $18,652,842

Current Obligation: $18,652,842

Contract Characteristics

Cost or Pricing Data: NO

Timeline