DoD awards $51.4M for weapon stations, raising questions about competition and value

Contract Overview

Contract Amount: $51,382,044 ($51.4M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2022-12-16

End Date: 2026-02-28

Contract Duration: 1,170 days

Daily Burn Rate: $43.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

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

Place of Performance

Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15904

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $51.4 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: DELIVERY ORDER FOR COMMON REMOTELY OPERATED WEAPON STATION (CROWS) SYSTEMS. Key points: 1. The contract was awarded on a non-competitive basis, limiting price discovery. 2. The value-for-money assessment is challenging without competitive benchmarks. 3. Risk indicators are elevated due to the lack of open competition. 4. Performance context is limited to the delivery order's scope. 5. This contract falls within the defense manufacturing sector. 6. The award represents a significant investment in tactical weapon systems.

Value Assessment

Rating: questionable

Benchmarking the value of this $51.4 million award is difficult given its sole-source nature. Without competitive bids, it's hard to ascertain if the pricing reflects fair market value or if potential savings were forgone. Comparisons to similar contracts for remotely operated weapon stations would be necessary to provide a more robust value assessment, but such data is not readily available in this context. The firm-fixed-price contract type offers some cost certainty, but the absence of competition is a primary concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Army did not solicit bids from multiple vendors. This approach bypasses the standard competitive procurement process, which typically involves soliciting proposals from various qualified companies. The lack of competition means there were no other bidders to compare against, potentially impacting price negotiation and the government's ability to secure the best possible terms.

Taxpayer Impact: Taxpayers may not have received the most competitive pricing due to the absence of a bidding process. This can lead to higher costs than might be achieved in a fully open and competitive environment.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring advanced weapon systems. The contract delivers remotely operated weapon stations, enhancing soldier safety and combat effectiveness. The geographic impact is primarily within military installations and operational theaters where these systems are deployed. Workforce implications include potential support and maintenance roles for the contracted systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about optimal pricing.
Sole-source award limits transparency in price determination.
Potential for higher costs compared to a competed contract.

Positive Signals

Firm-fixed-price contract provides cost certainty for the awarded amount.
Award supports critical defense capabilities for the U.S. Army.

Sector Analysis

This contract falls within the defense industry, specifically the manufacturing of weapon systems. The market for such specialized military hardware is often characterized by a limited number of highly capable suppliers due to stringent technical requirements and security clearances. Comparable spending benchmarks for advanced weapon stations are difficult to establish publicly due to the sensitive nature of defense procurement and the unique specifications of each system. The overall defense sector sees significant investment in modernization and technological advancement.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The prime contractor, Kongsberg Defence & Aerospace AS, is a large international company. This award is unlikely to have a direct positive impact on the small business ecosystem within this specific procurement, as the primary contract is with a non-US entity and awarded non-competitively.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. Accountability measures are inherent in the firm-fixed-price structure, which caps the government's liability. Transparency is limited by the sole-source nature of the award. The Inspector General of the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Army Combat Systems
Weapon Systems Procurement
Defense Remotely Operated Weapons
Ordnance and Accessories Manufacturing

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency in the procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.4 million to KONGSBERG DEFENCE & AEROSPACE AS. DELIVERY ORDER FOR COMMON REMOTELY OPERATED WEAPON STATION (CROWS) 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 $51.4 million.

What is the period of performance?

Start: 2022-12-16. End: 2026-02-28.

What is the track record of Kongsberg Defence & Aerospace AS with the U.S. Department of Defense?

Kongsberg Defence & Aerospace AS, a Norwegian company, has a history of supplying defense equipment to various international militaries, including the U.S. Department of Defense. While specific contract details and performance history with the DoD are not fully detailed in the provided data, their involvement in supplying advanced weapon systems like the Common Remotely Operated Weapon Station (CROWS) indicates a recognized capability and established relationship. The DoD often procures specialized systems from international partners when domestic capabilities are limited or when specific technological advantages are sought. Further analysis would require examining historical contract awards, performance reviews, and any past issues or successes related to their previous engagements with U.S. defense agencies.

How does the value of this contract compare to similar procurements of remotely operated weapon systems?

Direct comparison of this $51.4 million delivery order for CROWS systems is challenging due to the sole-source nature of the award and the proprietary details often associated with defense contracts. Typically, competitive procurements allow for price benchmarking against multiple bids, revealing market rates and potential cost efficiencies. Without such a competitive baseline, assessing whether this award represents optimal value is difficult. Similar systems procured competitively might offer insights, but variations in system capabilities, quantities, support packages, and specific contract terms (like firm-fixed-price versus cost-plus) mean that direct dollar-for-dollar comparisons can be misleading. The absence of competition here inherently limits the ability to establish a clear value benchmark against the market.

What are the primary risks associated with a sole-source award for critical weapon systems?

The primary risks associated with a sole-source award for critical weapon systems like the CROWS include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or offer cost-saving measures, and a diminished ability for the government to explore alternative solutions or technologies. Sole-source contracts can also create dependency on a single supplier, which poses a risk to supply chain resilience and long-term sustainment if that supplier faces financial difficulties or geopolitical challenges. Furthermore, the lack of transparency in the bidding process can raise public perception issues regarding fairness and the responsible use of taxpayer funds. Ensuring robust justification for the sole-source award and conducting thorough price analysis are crucial mitigation strategies.

What is the expected program effectiveness or impact of these CROWS systems?

The Common Remotely Operated Weapon Station (CROWS) systems are designed to enhance the effectiveness and safety of ground vehicles by allowing soldiers to operate weapons from within the vehicle's protected compartment. This capability significantly reduces the exposure of personnel to enemy fire, thereby improving survivability. The systems provide stabilized targeting, allowing for greater accuracy, especially against moving targets or at longer ranges. Their integration into various Army platforms aims to standardize weapon station capabilities across the fleet, simplifying logistics, training, and maintenance. The expected impact is an increase in combat effectiveness through improved situational awareness, precision engagement, and reduced risk to warfighters.

How has federal spending on weapon systems manufacturing evolved over the past five years?

Federal spending on weapon systems manufacturing has generally remained robust, driven by ongoing military modernization efforts, geopolitical tensions, and the need to replace aging equipment. While specific figures fluctuate annually based on budget allocations and strategic priorities, the Department of Defense consistently represents a significant portion of federal discretionary spending. Procurements often focus on advanced technologies, including networked systems, unmanned platforms, and next-generation combat vehicles. Spending trends can be influenced by major global events, shifts in defense strategy (e.g., pivot to great power competition), and congressional appropriations. Analyzing historical data from sources like the Congressional Budget Office or the Department of Defense's own budget requests would provide a more detailed view of spending patterns and priorities within this sector over the past five years.

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

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: $51,382,044

Exercised Options: $51,382,044

Current Obligation: $51,382,044

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15QKN18D0135

IDV Type: IDC

Timeline