DoD awards $16.4M contract to Daycraft Systems for ordnance accessories, raising questions about competition

Contract Overview

Contract Amount: $16,417,214 ($16.4M)

Contractor: Daycraft Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-08-18

End Date: 2025-07-18

Contract Duration: 1,430 days

Daily Burn Rate: $11.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS EFFORT IS TO AWARD A CONTRACT TO DAYCRAFT SYSTEMS FOR REQUIRED PRODUCTS.

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85040

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $16.4 million to DAYCRAFT SYSTEMS CORPORATION for work described as: THE PURPOSE OF THIS EFFORT IS TO AWARD A CONTRACT TO DAYCRAFT SYSTEMS FOR REQUIRED PRODUCTS. Key points: 1. Contract awarded on a firm-fixed-price basis, indicating defined cost and delivery expectations. 2. The contract duration of 1430 days suggests a long-term need for these specialized products. 3. Awarded to a single vendor, Daycraft Systems Corporation, without open competition. 4. The specific product category, Small Arms, Ordnance, and Ordnance Accessories Manufacturing, is critical for defense readiness. 5. The contract's value of over $16 million warrants scrutiny regarding cost-effectiveness and market alternatives. 6. Geographic location of the contractor in Arizona may have implications for supply chain logistics.

Value Assessment

Rating: questionable

Benchmarking the value of this $16.4 million contract is challenging without specific product details or comparable contract data. The firm-fixed-price structure suggests the government has a clear understanding of costs. However, the lack of competition means there's no direct market comparison to assess if the pricing is optimal. Further analysis would require understanding the specific ordnance accessories procured and their market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicated by 'NOT AVAILABLE FOR COMPETITION'. This suggests a sole-source award, where only one vendor was considered. Without a competitive bidding process, it is difficult to ascertain the level of market engagement or if alternative suppliers were evaluated. This approach can sometimes be justified for specialized items or urgent needs, but it limits price discovery.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive pressure. The government's ability to negotiate favorable terms is reduced when only one supplier is considered.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring specialized ordnance accessories. The contract ensures the supply of critical components for small arms and ordnance systems. The geographic impact is primarily within Arizona, where Daycraft Systems Corporation is located, potentially supporting local employment. Workforce implications may include specialized manufacturing and logistics roles within Daycraft Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpricing and limited innovation.
Sole-source awards can create vendor lock-in and reduce future contracting flexibility.
The specific nature of ordnance accessories may limit the pool of qualified suppliers, but this should be rigorously assessed.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
The long contract duration suggests a stable and reliable supply chain is being established.
Awarding to an existing entity may leverage established expertise and production capabilities.

Sector Analysis

The defense industrial base for ordnance and ordnance accessories is a critical sector, encompassing the manufacturing of ammunition, explosives, and related components. This contract fits within the broader defense manufacturing market, which is characterized by specialized production, stringent quality control, and often long-term supply agreements. Comparable spending benchmarks are difficult to establish without knowing the exact items, but the overall defense procurement budget for such materials runs into billions annually.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award, it's unlikely that subcontracting opportunities for small businesses were a primary consideration in the initial award decision. However, the prime contractor may still engage small businesses for specific components or services, which would be detailed in their subcontracting plan if applicable.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's contracting and procurement regulations. Accountability measures are typically embedded within the contract terms, including performance standards and delivery schedules. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Procurement
Ordnance and Ammunition Manufacturing
Defense Industrial Base Contracts
Sole-Source Defense Contracts

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.4 million to DAYCRAFT SYSTEMS CORPORATION. THE PURPOSE OF THIS EFFORT IS TO AWARD A CONTRACT TO DAYCRAFT SYSTEMS FOR REQUIRED PRODUCTS.

Who is the contractor on this award?

The obligated recipient is DAYCRAFT SYSTEMS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.4 million.

What is the period of performance?

Start: 2021-08-18. End: 2025-07-18.

What is the specific nature of the 'required products' being procured under this contract?

The contract description states the purpose is to award a contract for 'required products' to Daycraft Systems Corporation. While the North American Industry Classification System (NAICS) code 332994 indicates 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing,' the precise items are not detailed in the provided data. These could range from components for small arms to larger ordnance accessories. Understanding the specific products is crucial for assessing value, risk, and market alternatives. Without this information, the analysis remains at a high level, focusing on the procurement process and general industry context.

What is the justification for awarding this contract on a sole-source basis?

The provided data explicitly states 'NOT AVAILABLE FOR COMPETITION,' which signifies a sole-source award. The justification for such an award typically falls into categories like urgency of need, unique capabilities of a single contractor, or when only one source is reasonably available. For defense contracts, this might involve proprietary technology, specialized manufacturing processes, or critical components where only one supplier meets stringent military specifications. However, without further documentation from the awarding agency (Department of the Army in this case), the specific rationale remains unknown. This lack of competition is a key area for scrutiny regarding taxpayer value.

How does the $16.4 million contract value compare to historical spending on similar ordnance accessories?

Direct comparison of the $16.4 million contract value to historical spending on similar ordnance accessories is not possible with the provided data alone. Historical spending patterns would require access to databases tracking procurement of specific items under NAICS code 332994 or related codes. Factors influencing historical spending include inflation, changes in military requirements, technological advancements, and the number of competing suppliers at the time of previous awards. A sole-source award, as in this case, inherently lacks the price discovery mechanism of competition, making direct value comparisons more complex and reliant on external market data or cost analysis by the government.

What are the potential risks associated with a sole-source contract for defense ordnance?

Sole-source contracts for defense ordnance carry several risks. Firstly, the absence of competition can lead to inflated prices, as the contractor faces less pressure to offer the most cost-effective solution. Secondly, it can foster vendor lock-in, making it difficult and costly to switch suppliers in the future, even if better alternatives emerge. Thirdly, there's a risk of complacency from the contractor regarding innovation and quality improvement, as they are guaranteed the business without needing to outperform competitors. Finally, without competitive benchmarking, it's harder to ensure the government is receiving the best value and that the procured items meet the highest standards of performance and reliability, which is critical for ordnance.

What is Daycraft Systems Corporation's track record with government contracts, particularly within the Department of Defense?

Information regarding Daycraft Systems Corporation's specific track record with government contracts, especially within the Department of Defense, is not detailed in the provided data snippet. To assess their performance, one would typically look at past contract awards, performance reviews (e.g., Contractor Performance Assessment Reporting System - CPARS), any past performance issues, and their history of delivering on time and within budget. A thorough analysis would involve querying federal procurement databases to understand their broader contract history, including the types of goods or services provided, their value, and the agencies they have served. This information is crucial for evaluating the reliability and capability of the selected contractor.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W15QKN21R0095

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3527 S HANGAR DR, COOLIDGE, AZ, 85128

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

Financial Breakdown

Contract Ceiling: $16,417,214

Exercised Options: $16,417,214

Current Obligation: $16,417,214

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline