DoD awards $35.4M for unmanned aircraft system variants, with no competition

Contract Overview

Contract Amount: $35,404,718 ($35.4M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2019-01-31

End Date: 2024-10-30

Contract Duration: 2,099 days

Daily Burn Rate: $16.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: RAPID DEVELOPMENT, PRODUCTION, DEPLOYMENT, AND SUPPORT OF THE MOBILE-LOW, SLOW, SMALL UNMANNED AIRCRAFT SYSTEM (UAS) INTEGRATED DEFEAT SYSTEM (M-LIDS) VARIANTS TO REQUIRING THEATERS.

Place of Performance

Location: BRIDGETON, SAINT LOUIS County, MISSOURI, 63044

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $35.4 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: RAPID DEVELOPMENT, PRODUCTION, DEPLOYMENT, AND SUPPORT OF THE MOBILE-LOW, SLOW, SMALL UNMANNED AIRCRAFT SYSTEM (UAS) INTEGRATED DEFEAT SYSTEM (M-LIDS) VARIANTS TO REQUIRING THEATERS. Key points: 1. Contract awarded to DRS Sustainment Systems, Inc. for mobile unmanned aircraft system variants. 2. Significant funding allocated for rapid development, production, and deployment. 3. The contract has a long duration of 2099 days, spanning over 5 years. 4. No small business set-aside was applied to this contract. 5. The contract type is Cost No Fee, indicating potential for cost overruns. 6. The award was not competed, raising questions about price discovery and value. 7. The system is intended for use in requiring theaters, suggesting operational urgency.

Value Assessment

Rating: questionable

The contract's Cost No Fee (Cost Plus Fixed Fee) structure, while common for R&D, can lead to less price certainty compared to fixed-price contracts. Without a competitive bidding process, it is difficult to benchmark the value for money. The total award amount of $35.4 million over nearly six years suggests a substantial investment, but the lack of competition prevents a direct comparison to market rates or similar systems. Further analysis would require understanding the specific technical requirements and the contractor's cost structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency precludes a competitive process. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. It is unclear from the provided data why this contract was not competed.

Taxpayer Impact: Taxpayers may not be receiving the best value due to the absence of competitive pressure, potentially leading to higher costs than if multiple bids were solicited.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units requiring advanced unmanned aircraft systems. The contract will deliver mobile, low, slow, small unmanned aircraft system (UAS) variants. These systems are intended for deployment in 'requiring theaters,' indicating a focus on active operational environments. The contract supports the development, production, and deployment, implying a need for specialized manufacturing and technical expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Cost No Fee contract type offers less price certainty.
Long contract duration could lead to scope creep or evolving requirements not fully captured in initial pricing.
No small business participation noted, potentially limiting opportunities for smaller innovative firms.

Positive Signals

Addresses a specific need for advanced UAS technology in operational theaters.
Contract awarded to a known entity (DRS Sustainment Systems, Inc.) which may imply existing expertise.
Focus on rapid development and deployment suggests a commitment to meeting urgent operational needs.

Sector Analysis

The defense sector is heavily invested in unmanned aerial systems (UAS) for intelligence, surveillance, reconnaissance, and strike capabilities. Spending in this area is substantial, with numerous contracts awarded for various UAS platforms and support services. This contract for specialized mobile UAS variants fits within the broader trend of increasing reliance on autonomous systems in military operations. Benchmarking would require comparing this contract's scope and value to other UAS development and production contracts within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside, nor is there information indicating subcontracting opportunities for small businesses. The award to a single, likely larger, contractor may limit the direct involvement of small businesses in this specific procurement. Further investigation into subcontracting plans would be necessary to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and acquisition oversight processes, potentially involving the Defense Contract Management Agency (DCMA). The 'Cost No Fee' structure necessitates close monitoring of costs and performance to ensure the government receives value. Transparency regarding the justification for the sole-source award and detailed performance reports would be key accountability measures.

Related Government Programs

Unmanned Aircraft Systems (UAS) Procurement
Defense Research and Development
Tactical Unmanned Systems
Intelligence, Surveillance, and Reconnaissance (ISR) Platforms

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.4 million to DRS SUSTAINMENT SYSTEMS, INC. RAPID DEVELOPMENT, PRODUCTION, DEPLOYMENT, AND SUPPORT OF THE MOBILE-LOW, SLOW, SMALL UNMANNED AIRCRAFT SYSTEM (UAS) INTEGRATED DEFEAT SYSTEM (M-LIDS) VARIANTS TO REQUIRING THEATERS.

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $35.4 million.

What is the period of performance?

Start: 2019-01-31. End: 2024-10-30.

What is the specific capability gap this mobile UAS variant is intended to address, and why was a sole-source award deemed necessary?

The provided data indicates the contract is for 'RAPID DEVELOPMENT, PRODUCTION, DEPLOYMENT, AND SUPPORT OF THE MOBILE-LOW, SLOW, SMALL UNMANNED AIRCRAFT SYSTEM (UAS) INTEGRATED DEFEAT SYSTEM (M-LIDS) VARIANTS TO REQUIRING THEATERS.' This suggests a need for specialized UAS capable of operating in contested environments, potentially for counter-UAS missions or persistent surveillance. The sole-source award implies that either DRS Sustainment Systems, Inc. is the only entity with the proprietary technology, the necessary security clearances, or the production capacity to meet urgent operational requirements. Without further documentation, the precise justification for the sole-source award remains speculative but likely centers on unique capabilities or urgent need.

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

A 'Cost No Fee' (Cost Plus Fixed Fee - CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. This structure is often used for research and development or when the scope of work is uncertain. It provides maximum flexibility for the contractor to adapt to changing requirements. However, it offers less incentive for cost control compared to fixed-price contracts, as the contractor is assured reimbursement. For the government, this necessitates robust oversight to monitor costs, ensure efficiency, and prevent overruns. The fixed fee, once negotiated, remains constant, but the total cost to the government can vary significantly.

What is the historical spending pattern for similar mobile UAS systems within the Department of Defense?

Historical spending on mobile UAS systems within the DoD has been substantial and steadily increasing over the past two decades, driven by operational demands in various theaters. While specific figures for 'mobile-low, slow, small UAS integrated defeat systems' are not readily available without deeper database access, the overall UAS market within defense is valued in the billions annually. This includes spending on platforms like the RQ-11 Raven, RQ-20 Puma, and various other small tactical UAS. The $35.4 million award for this specific variant appears to be a significant investment for a particular capability, but it must be viewed within the broader context of extensive DoD investment in drone technology across multiple size classes and mission sets.

What are the potential risks associated with the long contract duration of over 2000 days?

A contract duration of 2099 days (nearly six years) presents several potential risks. Firstly, technology can rapidly evolve, meaning the system's capabilities might become outdated before the contract concludes, requiring costly modifications or upgrades. Secondly, requirements can change based on shifting geopolitical landscapes or evolving threats, potentially leading to scope creep or the need for contract modifications that increase costs. Thirdly, long-term contracts can reduce flexibility for the government to pivot to potentially better or more cost-effective solutions that emerge during the contract period. Finally, maintaining consistent oversight and contractor performance over such an extended period can be challenging.

What is the track record of DRS Sustainment Systems, Inc. in delivering complex defense systems, particularly UAS?

DRS Sustainment Systems, Inc., part of Leonardo DRS, has a significant track record in providing advanced technology solutions to the defense sector. While their broader portfolio includes electro-optical systems, power solutions, and training systems, their involvement in UAS is also notable. They have been associated with various unmanned systems, including providing components, integration services, and support for different platforms. Specific details on their success rate with 'mobile-low, slow, small UAS integrated defeat systems' would require a more in-depth review of their contract history and performance evaluations. However, their established presence suggests a level of experience relevant to this type of procurement.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Electromedical and Electrotherapeutic Apparatus Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: $35,404,718

Exercised Options: $35,404,718

Current Obligation: $35,404,718

Actual Outlays: $866,204

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $7,862,386

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline