DoD's $30.5M mobile gun solution contract awarded to DRS Sustainment Systems, Inc. raises value concerns

Contract Overview

Contract Amount: $30,457,202 ($30.5M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2017-06-29

End Date: 2019-05-30

Contract Duration: 700 days

Daily Burn Rate: $43.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: LETTER CONTRACT FOR THE SERVICES TO SUPPORT THE MOBILE GUN SOLUTION.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $30.5 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: LETTER CONTRACT FOR THE SERVICES TO SUPPORT THE MOBILE GUN SOLUTION. Key points: 1. The contract's value proposition is unclear due to a lack of competitive bidding and limited performance data. 2. The sole-source award suggests potential for inflated pricing and reduced market responsiveness. 3. The absence of a competitive process increases the risk of suboptimal value for taxpayer funds. 4. The contract duration and cost-plus structure warrant scrutiny for potential cost overruns. 5. The limited scope of work for a mobile gun solution requires further definition to assess its strategic importance. 6. The contract's focus on sustainment rather than development may indicate a mature technology with less innovation potential.

Value Assessment

Rating: questionable

Benchmarking the value of this $30.5 million contract is challenging due to its sole-source nature and the specific, potentially niche, nature of a 'mobile gun solution.' Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if alternative, more cost-effective solutions were overlooked. The cost-plus contract type, while offering flexibility, inherently carries a higher risk of cost escalation compared to fixed-price contracts. Further analysis would be needed to compare the per-unit cost or overall project cost against similar sustainment contracts for defense equipment, if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of Defense did not solicit bids from multiple vendors. This approach is typically reserved for situations where only one vendor possesses the necessary capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms, potentially leading to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available, as the government did not explore options from other qualified contractors.

Public Impact

The primary beneficiaries are the Department of the Army and potentially its operational units requiring mobile gun solutions. The contract delivers services to support the mobile gun solution, likely encompassing maintenance, repair, and logistical support. The geographic impact is primarily within Alabama, where the contractor is located, but the ultimate operational impact could be global. Workforce implications include employment at DRS Sustainment Systems, Inc. and potentially its subcontractors, supporting the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition increases risk of overpayment.
Cost-plus contract type can lead to uncontrolled cost growth.
Limited public information on the specific 'mobile gun solution' makes value assessment difficult.
Contract duration of 700 days without clear performance metrics raises concerns about efficiency.

Positive Signals

Awarded to a known defense contractor, potentially indicating established capabilities.
Contract addresses a specific defense need, contributing to military readiness.

Sector Analysis

This contract falls within the defense manufacturing and sustainment sector, specifically related to weapon systems. The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' suggests a focus on complex electronic and mechanical systems. The defense sector is characterized by long-term contracts, specialized requirements, and significant government investment. Benchmarking this contract's value against other sustainment contracts for similar defense platforms would provide better context, though such data is often sensitive.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information on subcontracting plans. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless DRS Sustainment Systems, Inc. actively engages small businesses in its subcontracting efforts. Further investigation into subcontracting goals and achievements would be necessary to assess the broader impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. The contract type (Cost No Fee) implies that the contractor is reimbursed for allowable costs but does not receive a fee, which is unusual and warrants clarification on the fee structure or potential misclassification. Transparency is limited due to the sole-source nature and lack of publicly available performance metrics. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Weapon System Sustainment Programs
Army Logistics and Maintenance Contracts
Mobile Defense Systems Procurement
Defense Contractor Support Services

Risk Flags

Sole-source award lacks transparency and competitive pricing.
Cost-plus contract type carries inherent risk of cost overruns.
Lack of detailed information on the 'mobile gun solution' hinders value assessment.
Unusual 'Cost No Fee' designation requires clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.5 million to DRS SUSTAINMENT SYSTEMS, INC. LETTER CONTRACT FOR THE SERVICES TO SUPPORT THE MOBILE GUN SOLUTION.

Who is the contractor on this award?

The obligated recipient is DRS SUSTAINMENT SYSTEMS, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.5 million.

What is the period of performance?

Start: 2017-06-29. End: 2019-05-30.

What specific 'mobile gun solution' does this contract support, and what is its operational purpose?

The provided data indicates the contract is for 'services to support the mobile gun solution.' However, the specific nature of this solution is not detailed. Mobile gun solutions in a military context can range from towed artillery systems to vehicle-mounted cannons or even advanced directed-energy weapons. The operational purpose would likely relate to providing mobile firepower for ground forces, requiring sustainment services such as maintenance, repair, spare parts, technical support, and potentially upgrades. Without more specific information on the system itself, its exact role in military operations and the necessity of this particular contract remain unclear.

Why was this contract awarded on a sole-source basis, and were alternatives considered?

The contract was explicitly marked as 'NOT COMPETED,' indicating a sole-source award. The rationale for sole-sourcing is not provided in the data. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, such as when the item is unique, proprietary, or when there's an urgent need that cannot be met through competition. Without further documentation or justification from the Department of the Army, it is impossible to determine if alternatives were genuinely considered or if the sole-source justification is robust. This lack of competition raises concerns about potential price inflation and missed opportunities for better value.

What is the significance of the 'Cost No Fee' (Cost) contract type, and how does it impact contractor incentive?

The contract type is listed as 'COST NO FEE' (PT: COST NO FEE). This is a highly unusual contract type. In a Cost contract, the contractor is reimbursed for all allowable costs incurred in performing the contract. However, the 'No Fee' aspect means the contractor does not receive any profit or fee on top of their costs. This structure typically incentivizes the contractor to minimize costs, as their only recovery is the cost itself. It is often used in research and development efforts where the scope is highly uncertain and profit is difficult to determine. For a sustainment contract, it's atypical and might suggest a specific government objective or a potential misclassification. It could also indicate that the 'fee' is incorporated elsewhere or that the contractor is essentially a government-owned, contractor-operated entity for this specific function.

How does the contract duration of 700 days compare to typical sustainment contracts for similar defense systems?

A duration of 700 days (approximately 23 months) for a sustainment contract is not uncommon in the defense sector, especially for complex systems requiring ongoing support. However, without knowing the specific 'mobile gun solution' and its lifecycle stage, a direct comparison is difficult. Typical sustainment contracts can range from a few months for short-term needs to several years, often with options for extension. The key factor is whether this duration aligns with the expected operational life and maintenance schedule of the system it supports. A longer duration might indicate a stable, long-term need, while a shorter one could suggest a transitional phase or a pilot program.

What is the historical spending pattern for this specific mobile gun solution or similar systems by the Department of Defense?

The provided data only includes information for this single contract awarded on June 29, 2017, with an end date of May 30, 2019, totaling $30,457,202.22. There is no historical spending data presented for this specific 'mobile gun solution' or comparable systems within this dataset. To analyze historical spending patterns, one would need access to broader contract databases and search capabilities to identify previous contracts for the same or similar systems, their values, durations, and award types. This would help determine if spending has been consistent, increasing, or decreasing over time and whether this contract represents a significant deviation.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

Address: 4201 INNOVATION WAY, BRIDGETON, MO, 63044

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

Financial Breakdown

Contract Ceiling: $31,498,031

Exercised Options: $30,457,202

Current Obligation: $30,457,202

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $344,691

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline