DoD's $31M mobile gun solution contract awarded to DRS Sustainment Systems, Inc. without competition

Contract Overview

Contract Amount: $31,058,400 ($31.1M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2017-09-28

End Date: 2021-09-30

Contract Duration: 1,463 days

Daily Burn Rate: $21.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: UCA FOR MOBILE GUN SOLUTION INCREMENT 1 PRODUCTION

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63121

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $31.1 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: UCA FOR MOBILE GUN SOLUTION INCREMENT 1 PRODUCTION Key points: 1. The contract's value of over $31 million was awarded without a competitive bidding process. 2. The absence of competition raises concerns about potential overpayment and lack of market-driven pricing. 3. The contract duration of approximately four years suggests a significant, long-term need for the solution. 4. The 'Cost No Fee' contract type may incentivize higher costs from the contractor. 5. The specific product, a mobile gun solution, falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry code. 6. The contract was awarded by the Department of the Army, a major component of the Department of Defense. 7. The contractor, DRS Sustainment Systems, Inc., has received this award as a sole source.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money. The 'Cost No Fee' contract type, while sometimes necessary for complex R&D, can lead to less cost control compared to fixed-price contracts. The total award amount of over $31 million warrants scrutiny to ensure it aligns with market rates for similar technological solutions, especially given the lack of competing proposals to establish a price baseline. Further analysis would be needed to compare the delivered capabilities against industry standards and the costs incurred by other government agencies for comparable systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that DRS Sustainment Systems, Inc. was the only bidder considered. The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The lack of competition means that the government did not benefit from the price discovery that typically occurs in a competitive procurement environment, potentially leading to a higher price than might have been achieved otherwise.

Taxpayer Impact: Taxpayers may have paid a premium for this mobile gun solution due to the absence of competitive pressure. Without multiple bids, there is less assurance that the price reflects the best possible value achievable in the market.

Public Impact

The primary beneficiaries are likely military units requiring advanced mobile gun solutions for operational effectiveness. The contract delivers a mobile gun solution, crucial for tactical deployment and engagement capabilities. The geographic impact is primarily within the operational theaters where the Department of the Army deploys its forces. Workforce implications may include specialized technical support, manufacturing, and integration roles for the contractor and potentially military personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
The 'Cost No Fee' contract type offers less incentive for contractor cost control.
Lack of transparency in the bidding process due to sole-source nature.
Potential for contractor to leverage unique position for future sole-source awards.
Limited visibility into the specific technological advancements driving the sole-source justification.

Positive Signals

Award to a single, presumably capable, contractor ensures delivery of a specific solution.
The contract addresses a specific military need for a mobile gun system.
The Department of the Army is acquiring a critical capability.
The contractor, DRS Sustainment Systems, Inc., is a known entity in defense contracting.
The contract duration suggests a stable, long-term requirement being met.

Sector Analysis

The defense industry, particularly the segment focused on weapon systems and military hardware, is characterized by high R&D costs, long development cycles, and significant government procurement. Contracts like this, for specialized mobile gun solutions, are critical for maintaining military readiness and technological superiority. The market often involves a limited number of prime contractors capable of delivering such complex systems, and sole-source awards can occur when specific technological expertise or existing platform integration is required. Comparable spending benchmarks are difficult to establish without detailed technical specifications and competitive data.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting no specific small business subcontracting goals were mandated within this award. This means that opportunities for small businesses to participate in subcontracting roles may be limited or at the discretion of the prime contractor, DRS Sustainment Systems, Inc. The absence of set-asides or specific subcontracting plans could reduce the direct economic benefit to the small business ecosystem from this particular contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Given it's a sole-source award, the justification and pricing will be subject to intense scrutiny by government auditors and potentially the Government Accountability Office (GAO) if protests arise. Transparency is limited due to the non-competitive nature, but contract modifications, performance reports, and payment milestones would typically be tracked. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Army Tactical Missile Systems
Mobile Artillery Systems
Combat Vehicle Systems
Defense Weapon Systems Procurement
Naval Gun Systems

Risk Flags

Sole-source award
Lack of competition
Cost-reimbursement contract type (Cost No Fee)
Urgent Capability Acquisition (UCA)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to DRS SUSTAINMENT SYSTEMS, INC. UCA FOR MOBILE GUN SOLUTION INCREMENT 1 PRODUCTION

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 $31.1 million.

What is the period of performance?

Start: 2017-09-28. End: 2021-09-30.

What is the specific technological capability of the 'UCA FOR MOBILE GUN SOLUTION INCREMENT 1 PRODUCTION' and why was it deemed a sole-source requirement?

The specific technological capability of the 'UCA FOR MOBILE GUN SOLUTION INCREMENT 1 PRODUCTION' refers to an Urgent Capability Acquisition (UCA) for a mobile gun system, likely involving advanced targeting, stabilization, and firing mechanisms integrated onto a mobile platform. UCAs are typically initiated to rapidly address critical, immediate warfighting needs. The sole-source justification would stem from a determination that only DRS Sustainment Systems, Inc. possessed the unique technology, intellectual property, or existing system integration necessary to meet the urgent requirement within the required timeframe. This could involve proprietary software, specialized hardware components, or a pre-existing platform that could be rapidly adapted, making a competitive procurement infeasible or too time-consuming for the urgent need.

How does the 'Cost No Fee' (CNF) contract type typically impact contractor incentives and government oversight compared to other contract types?

A 'Cost No Fee' (CNF) contract type is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs but receives no fee or profit. This structure is often used in situations where the scope of work is uncertain, or for research and development efforts where the outcome is not guaranteed. For the contractor, the primary incentive is cost control, as any excess costs beyond what is deemed allowable will not be reimbursed, and there is no profit margin to protect. For the government, this necessitates rigorous oversight of costs to ensure they are reasonable, allocable, and allowable. While it removes the profit motive, it can also reduce the contractor's incentive to innovate or perform beyond the minimum requirements, as there is no additional reward. It places a greater burden on the government to actively manage and audit the contractor's expenditures.

What is the historical spending pattern for mobile gun solutions by the Department of the Army, and how does this $31M contract compare?

Historical spending on mobile gun solutions by the Department of the Army can vary significantly based on technological advancements, strategic priorities, and specific operational requirements. Without access to detailed historical procurement data for this specific category, a direct comparison is challenging. However, a $31 million contract for a 'UCA FOR MOBILE GUN SOLUTION INCREMENT 1 PRODUCTION' suggests a significant investment in a relatively advanced or urgently needed capability. If previous acquisitions of similar systems were competitively procured and cost less, this sole-source UCA award might represent a higher per-unit cost or a more complex system. Conversely, if similar systems previously cost more or were procured under less favorable terms, this contract's value might be justifiable, albeit still needing validation due to the lack of competition.

What are the potential risks associated with awarding a large-value contract like this on a sole-source basis, particularly concerning contractor performance and future pricing?

Awarding a large-value contract on a sole-source basis carries several potential risks. Firstly, the government forgoes the benefits of price competition, which typically drives down costs and encourages efficiency. This can lead to overpayment. Secondly, the contractor may have less incentive to perform exceptionally well or to control costs rigorously, knowing they are the only option. This can impact performance quality and delivery timelines. Thirdly, a sole-source award can create a dependency on that specific contractor, potentially leading to higher prices in future sole-source follow-on contracts or modifications, as the government may have limited leverage. Finally, it raises concerns about whether the sole-source justification was truly valid or if opportunities for competition were overlooked.

What is the track record of DRS Sustainment Systems, Inc. in delivering complex defense systems, and have they been awarded sole-source contracts previously?

DRS Sustainment Systems, Inc., a subsidiary of Leonardo DRS, has a significant track record in the defense industry, providing a wide range of products and services including command and control systems, network infrastructure, and various defense electronics. They are a known entity within the Department of Defense supply chain. Information regarding their history of sole-source awards would require a deep dive into historical contract databases. However, like many large defense contractors, it is plausible they have received sole-source contracts in the past, particularly for specialized systems or upgrades where their proprietary technology or unique capabilities were deemed essential. Their overall performance record, including on-time delivery, quality, and cost management on previous contracts, would be a key factor in assessing the risk associated with this current sole-source award.

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: $52,483,541

Exercised Options: $31,058,400

Current Obligation: $31,058,400

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline