Army awards $31.5M for optical instruments, with a 2016 benchmark suggesting potential overspending

Contract Overview

Contract Amount: $31,497,189 ($31.5M)

Contractor: Wilcox Industries Corp.

Awarding Agency: Department of Defense

Start Date: 2019-06-20

End Date: 2023-09-29

Contract Duration: 1,562 days

Daily Burn Rate: $20.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR PRODUCTION UNITS AND FIRST ARTICLE TEST

Place of Performance

Location: NEWINGTON, ROCKINGHAM County, NEW HAMPSHIRE, 03801

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $31.5 million to WILCOX INDUSTRIES CORP. for work described as: DELIVERY ORDER FOR PRODUCTION UNITS AND FIRST ARTICLE TEST Key points: 1. Contract awarded via full and open competition, indicating a competitive bidding process. 2. The contract's duration of 1562 days suggests a long-term need for these optical instruments. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. The award date of June 2019 and end date of September 2023 indicate a completed delivery period. 5. The contract is for production units and first article testing, crucial for quality assurance. 6. The contractor, Wilcox Industries Corp., operates within the optical instrument and lens manufacturing sector.

Value Assessment

Rating: questionable

The contract value of $31.5 million is significant for optical instrument production. Benchmarking against a prior award of $20.165 million in 2016 for similar items raises concerns about potential price increases or scope changes. Without more granular data on the specific units and testing required, a definitive value-for-money assessment is difficult, but the 2016 benchmark warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The presence of two bids (no: 2) indicates some level of competition, but the exact number of bidders and the nature of the competition (e.g., were there any disqualifications or protests) are not detailed. A higher number of bidders typically leads to better price discovery.

Taxpayer Impact: A competitive award process is generally favorable for taxpayers as it encourages lower pricing and better value. However, the limited number of bids suggests that the full benefits of robust competition might not have been realized.

Public Impact

The U.S. Army benefits from the acquisition of essential optical instruments for its operations. Production units and first article testing ensure the quality and readiness of critical equipment. The contract supports the defense industrial base, specifically within the optical manufacturing sector. Workforce implications include employment opportunities within Wilcox Industries Corp. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation compared to previous similar awards.
Limited competition with only two bids received.
Lack of detailed unit cost breakdown makes precise value assessment challenging.

Positive Signals

Awarded under full and open competition.
Firm-fixed-price contract type mitigates cost overrun risk for the government.
Contract includes first article testing, ensuring product quality.

Sector Analysis

The optical instrument and lens manufacturing sector is a specialized segment of the broader manufacturing industry, critical for defense, scientific, and commercial applications. This contract falls within a niche area of defense procurement, focusing on specialized optical equipment. Comparable spending benchmarks are difficult to establish without more specific product details, but the defense sector consistently invests in advanced optical technologies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary contractor is Wilcox Industries Corp., which is likely a larger entity given the contract value.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's established procurement regulations and quality assurance processes. The Army Contracting Command would be responsible for monitoring performance and compliance. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is facilitated through contract award databases, though detailed performance metrics are often not publicly disclosed.

Related Government Programs

Department of Defense Procurement
Army Weapon Systems
Optical and Fire Control Equipment Manufacturing
Defense Production Act Investments

Risk Flags

Potential for overpricing compared to historical benchmarks.
Limited competition may have impacted final price.
Lack of detailed product specification hinders precise value analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.5 million to WILCOX INDUSTRIES CORP.. DELIVERY ORDER FOR PRODUCTION UNITS AND FIRST ARTICLE TEST

Who is the contractor on this award?

The obligated recipient is WILCOX INDUSTRIES CORP..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.5 million.

What is the period of performance?

Start: 2019-06-20. End: 2023-09-29.

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

The contract specifies 'DELIVERY ORDER FOR PRODUCTION UNITS AND FIRST ARTICLE TEST' for optical instruments. While the exact nature of these instruments is not detailed in the provided data, they are procured by the Department of the Army. Given the context of defense procurement, these likely include components for targeting systems, surveillance equipment, or other mission-critical optical devices. First article testing is a crucial quality assurance step to verify that the initial production units meet all design and performance specifications before mass production commences. This ensures reliability and effectiveness in operational environments.

How does the awarded price of $31.5 million compare to the 2016 benchmark of $20.165 million, considering potential inflation and scope changes?

The awarded price of $31.5 million is approximately 56% higher than the 2016 benchmark of $20.165 million. While some price increase is expected due to inflation over the approximately three-year period between the benchmark and the award, a nearly 56% jump warrants further investigation. Factors such as expanded scope, technological upgrades, changes in material costs, or a less competitive bidding environment could explain this difference. Without detailed specifications for both contracts, it's difficult to definitively attribute the increase solely to inflation. A thorough analysis would require comparing the specific requirements, quantities, and technical specifications of both procurements.

What is the track record of Wilcox Industries Corp. in fulfilling government contracts, particularly for optical instruments?

Wilcox Industries Corp. is identified as the contractor for this $31.5 million award. To assess their track record, one would need to examine their past performance on similar government contracts. This includes reviewing contract histories for on-time delivery, quality compliance, and adherence to budget. Information from sources like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be invaluable. A history of successful contract completions, positive performance reviews, and minimal disputes would indicate reliability, while a pattern of issues could signal potential risks for future awards.

Given that only two bids were received, what are the potential implications for price discovery and overall value for the taxpayer?

Receiving only two bids suggests a limited competitive landscape for this particular procurement. While 'full and open competition' was utilized, the low number of bidders may indicate barriers to entry, a niche market, or insufficient outreach. With fewer bidders, the government may have less leverage to negotiate the lowest possible price, potentially leading to a higher cost for taxpayers than if there had been more robust competition. Price discovery is most effective when multiple vendors are vying for a contract, driving down prices through competitive pressure. The government should analyze why only two bids were submitted to ensure future procurements attract broader participation.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of this contract, and how were they measured?

The provided data does not specify the Key Performance Indicators (KPIs) or metrics used to evaluate the success of this contract. However, typical KPIs for such a contract would likely include adherence to delivery schedules, quality of the produced optical units (meeting all specifications outlined in the first article test), and compliance with contract terms. Performance would likely be monitored through regular progress reports from the contractor and potentially government inspections or acceptance testing. The successful completion of the first article test and the subsequent delivery of production units without significant quality issues or delays would be primary indicators of success.

How does this contract's spending compare to other similar optical instrument procurements by the Department of Defense or other federal agencies?

Comparing this $31.5 million contract to other similar optical instrument procurements requires access to broader federal spending data. Without specific details on the type and quantity of optical instruments, direct comparisons are challenging. However, the defense sector frequently procures sophisticated optical systems for various applications, ranging from targeting pods to reconnaissance equipment. The price point of $31.5 million for production units and testing suggests a significant procurement, likely involving specialized technology. Benchmarking against other large-scale optical system awards within the DoD or agencies like NASA could provide context on whether this contract represents typical or outlier spending for comparable items.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 25 PISCATAQUA DR, PORTSMOUTH, NH, 03801

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

Financial Breakdown

Contract Ceiling: $31,497,189

Exercised Options: $31,497,189

Current Obligation: $31,497,189

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN16D0031

IDV Type: IDC

Timeline