Army Awards $45M for CROWS Technical Refresh, Sole-Sourced to Kongsberg

Contract Overview

Contract Amount: $45,082,001 ($45.1M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2019-09-18

End Date: 2022-05-24

Contract Duration: 979 days

Daily Burn Rate: $46.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR COMMON REMOTELY OPERATED WEAPON STATION (CROWS) TECHNICAL REFRESH (TR) SYSTEMS.

Place of Performance

Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15904

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $45.1 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: DELIVERY ORDER FOR COMMON REMOTELY OPERATED WEAPON STATION (CROWS) TECHNICAL REFRESH (TR) SYSTEMS. Key points: 1. Significant investment in weapon station technology. 2. Sole-source award raises questions about competition and price. 3. Potential risks associated with single-vendor reliance. 4. Focus on defense manufacturing sector.

Value Assessment

Rating: questionable

The award amount of $45.1M for technical refresh systems appears high given the lack of competition. Benchmarking against similar contracts is difficult without competitive data, but the absence of bids suggests potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price for these systems.

Public Impact

Modernization of critical military hardware. Impact on defense contractor landscape. Potential for future sole-source awards if not addressed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Positive Signals

Technical refresh of weapon systems
Investment in defense capabilities

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on weapon systems. Spending benchmarks for similar technical refresh programs are hard to establish due to the sole-source nature of this award.

Small Business Impact

The data indicates that this contract was not awarded to a small business. There is no indication of small business participation in this sole-source award.

Oversight & Accountability

The sole-source justification for this award warrants further oversight to ensure it was appropriate and that future procurements are competed to ensure best value.

Related Government Programs

Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award lacks competition.
Potential for inflated pricing.
Limited transparency in price discovery.
No small business participation.
Dependency on a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.1 million to KONGSBERG DEFENCE & AEROSPACE AS. DELIVERY ORDER FOR COMMON REMOTELY OPERATED WEAPON STATION (CROWS) TECHNICAL REFRESH (TR) SYSTEMS.

Who is the contractor on this award?

The obligated recipient is KONGSBERG DEFENCE & AEROSPACE AS.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $45.1 million.

What is the period of performance?

Start: 2019-09-18. End: 2022-05-24.

What is the justification for awarding this contract sole-source, and what steps are being taken to ensure future competition?

The justification for a sole-source award typically involves unique capabilities or urgent needs. Without specific details on the justification, it's difficult to assess its validity. Agencies should actively seek opportunities to introduce competition in subsequent procurements to drive down costs and foster innovation.

How does the $45.1M price compare to industry benchmarks for similar technical refresh programs, considering the lack of competitive bids?

Direct comparison to industry benchmarks is challenging due to the sole-source nature of this award. The absence of competitive bids prevents a clear understanding of the market price. A thorough cost analysis by the agency, comparing proposed costs to independent government estimates and historical data for similar components, would be necessary to assess value.

What are the long-term risks associated with relying on a single vendor for critical weapon system components?

Long-term reliance on a single vendor can lead to increased costs, reduced innovation, and supply chain vulnerabilities. It can also create a vendor lock-in situation, making it difficult and expensive to switch providers later. This dependence can also limit the government's negotiating power and responsiveness to evolving technological needs.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories 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: Kongsberg Gruppen ASA (UEI: 518910914)

Address: KIRKEGARDSVEIEN 45, KONGSBERG

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $45,082,001

Exercised Options: $45,082,001

Current Obligation: $45,082,001

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15QKN18D0135

IDV Type: IDC

Timeline