Army awards $103M for vehicle development and spares, raising questions about competition and value

Contract Overview

Contract Amount: $103,279,285 ($103.3M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2022-10-07

End Date: 2025-12-30

Contract Duration: 1,180 days

Daily Burn Rate: $87.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS TASK ORDER IS FOR CAPABILITY DEVELOPMENT DOCUMENT INCREMENT-1, PROCUREMENT OF 10 CONFIGURATION B VEHICLES AND ASSOCIATED SPARES.

Place of Performance

Location: BRIDGETON, SAINT LOUIS County, MISSOURI, 63044

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $103.3 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: THIS TASK ORDER IS FOR CAPABILITY DEVELOPMENT DOCUMENT INCREMENT-1, PROCUREMENT OF 10 CONFIGURATION B VEHICLES AND ASSOCIATED SPARES. Key points: 1. Contract awarded via other than full and open competition, limiting price discovery. 2. Significant funding allocated for capability development and hardware procurement. 3. Long performance period suggests a need for sustained support and development. 4. Focus on specialized navigation and guidance systems indicates a niche requirement. 5. Contract type is Firm Fixed Price, shifting cost risk to the contractor. 6. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

The total award of over $103 million for capability development and vehicle procurement warrants scrutiny. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The firm-fixed-price structure aims to control costs, but the absence of competition means the government may not be achieving the best possible value. Further analysis of the specific components and development efforts would be needed to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. The specific reasons for this procurement approach are not detailed, but it typically suggests a unique capability, urgent need, or a follow-on effort where only one source is deemed capable. The lack of multiple bidders means the government did not benefit from a competitive environment to drive down prices or encourage innovative solutions.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing the requirement, there is less assurance that the price reflects fair market value.

Public Impact

The Department of the Army is the primary beneficiary, receiving enhanced capability development and hardware. Services delivered include capability development, procurement of 10 configuration B vehicles, and associated spares. The contract is managed by DRS Sustainment Systems, Inc., indicating a specific industry partner. Geographic impact is primarily linked to the Army's operational needs, with potential implications for personnel training and deployment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and limited value for taxpayer funds.
The sole-source nature of the award requires strong justification to ensure necessity and prevent potential contractor lock-in.
The significant dollar amount necessitates robust oversight to ensure funds are used effectively for stated objectives.
Absence of small business participation may limit the broader economic impact and innovation from smaller enterprises.

Positive Signals

Firm Fixed Price contract type shifts cost risk to the contractor, potentially leading to more predictable final costs.
The contract focuses on specific capability development, suggesting a strategic investment in advanced systems.
The long performance period indicates a commitment to a critical program requiring sustained support.

Sector Analysis

This contract falls within the "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing" sector, a specialized area within defense manufacturing. The market for such systems is often characterized by high barriers to entry due to technological complexity and stringent performance requirements. Spending in this sector is driven by national security needs and technological advancements in defense capabilities. Comparable spending benchmarks are difficult to establish without more specific details on the technology involved, but significant investments are common for advanced defense systems.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by the 'sb' field being false. The prime contractor, DRS Sustainment Systems, Inc., is likely a large business. Without specific subcontracting plans detailed in the award data, it's unclear what opportunities, if any, will be extended to small businesses. This lack of set-aside or explicit subcontracting goals may limit the direct economic benefit to the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight from the Department of Defense Inspector General. Transparency is dependent on the level of detail made public regarding the contract's execution and deliverables. Accountability measures would be tied to the firm-fixed-price terms and the delivery schedule, with potential penalties for non-performance.

Related Government Programs

Department of Defense Procurement
Army Vehicle Procurement
Navigation and Guidance Systems
Defense Manufacturing
Capability Development Contracts

Risk Flags

Sole-source award
Lack of competition
Significant dollar value
Long contract duration
Limited public detail on capability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.3 million to DRS SUSTAINMENT SYSTEMS, INC. THIS TASK ORDER IS FOR CAPABILITY DEVELOPMENT DOCUMENT INCREMENT-1, PROCUREMENT OF 10 CONFIGURATION B VEHICLES AND ASSOCIATED SPARES.

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 $103.3 million.

What is the period of performance?

Start: 2022-10-07. End: 2025-12-30.

What is the specific capability being developed and what are the key performance parameters for the 10 configuration B vehicles?

The provided data indicates the task order is for 'CAPABILITY DEVELOPMENT DOCUMENT INCREMENT-1, PROCUREMENT OF 10 CONFIGURATION B VEHICLES AND ASSOCIATED SPARES.' However, the specific details of the capability being developed and the key performance parameters (KPPs) for the 'configuration B vehicles' are not publicly disclosed in this summary. This level of detail is typically found in the contract's statement of work (SOW) or technical exhibits. Understanding these parameters is crucial for assessing the necessity of the procurement, the technical requirements, and the contractor's ability to meet them. Without this information, it's challenging to evaluate the technical merit or the appropriateness of the chosen solution and contractor.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source or limited competition award. The justification for such an approach typically falls under specific exceptions to the Competition in Contracting Act (CICA), such as when only one responsible source can satisfy the agency's needs, or in cases of urgent and compelling need. For this specific contract, the rationale for not competing it is not provided. It could be due to the unique nature of the 'configuration B vehicles,' the requirement for specific developmental expertise held by DRS Sustainment Systems, Inc., or a follow-on effort to a previously competed program where this contractor holds proprietary data or technology. A detailed justification document, often required for sole-source awards, would provide the specific reasons.

How does the $103 million award compare to historical spending on similar navigation and guidance systems or vehicle procurements by the Army?

Benchmarking this $103 million award against historical spending requires access to broader contract databases and analysis of similar procurements. The North American Industry Classification System (NAICS) code 334511 covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' Spending within this broad category can vary significantly based on the specific technology and quantity. Without knowing the exact specifications of the 'configuration B vehicles' and the 'capability development,' a direct comparison is difficult. However, $103 million represents a substantial investment, suggesting either a complex system, a significant quantity, or a combination of development and procurement. Historical data on large-scale defense vehicle programs or advanced navigation system development contracts would be needed for a meaningful comparison.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

Sole-source contracts of this magnitude ($103 million) and duration (ending Dec 2025) carry several inherent risks. Firstly, the lack of competition can lead to higher prices than might be achieved in a competitive environment, potentially resulting in less value for taxpayer money. Secondly, there's a risk of contractor complacency or reduced incentive to innovate once a sole-source position is secured. Thirdly, the government may become overly reliant on a single contractor, creating potential lock-in issues for future needs. Finally, without the scrutiny of multiple bidders, there's an increased need for robust government oversight to ensure performance, cost control, and adherence to contract terms. The long duration also means risks associated with contractor performance, financial stability, and evolving technological requirements must be carefully managed.

What is the track record of DRS Sustainment Systems, Inc. in delivering similar defense systems or vehicles?

DRS Sustainment Systems, Inc. is a known entity within the defense contracting landscape, often involved in providing sustainment, logistics, and specialized systems for military platforms. Their track record typically includes support for various ground vehicles, electronic systems, and training solutions. To assess their specific suitability for this contract, one would need to examine their past performance on contracts involving capability development, advanced navigation/guidance systems, and vehicle procurement, particularly for the Department of the Army. Publicly available contract databases and performance reviews (if accessible) can offer insights into their history of meeting deadlines, managing costs, and delivering quality products and services on similar defense programs.

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: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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: $103,279,285

Exercised Options: $103,279,285

Current Obligation: $103,279,285

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $57,589,130

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q20D0031

IDV Type: IDC

Timeline