DoD's $12.8M M-LIDS SPARES contract awarded to DRS Sustainment Systems, Inc. for navigation system components

Contract Overview

Contract Amount: $12,786,596 ($12.8M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2024-09-24

End Date: 2026-03-31

Contract Duration: 553 days

Daily Burn Rate: $23.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M-LIDS SPARES DIVISION SET 3 &4

Place of Performance

Location: BRIDGETON, SAINT LOUIS County, MISSOURI, 63044

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: M-LIDS SPARES DIVISION SET 3 &4 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 553 days suggests a need for ongoing support. 3. Fixed-price contract type aims to control costs, but sole-sourcing may inflate the price. 4. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector. 5. Awarded by the Department of the Army, indicating a focus on military operational needs. 6. The contract value is moderate, but its necessity for critical systems warrants scrutiny.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of the spares. Without competitive bids, it's difficult to ascertain if the $12.8 million represents a fair market price. The fixed-price structure is a positive indicator for cost control, but the lack of competition raises concerns about potential overpayment. Further analysis would require comparing unit prices for similar components or historical pricing for these specific spares.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, DRS Sustainment Systems, Inc., was solicited. This approach is typically used when a unique product or service is required, or when there's a lack of viable alternatives. The absence of competition means there was no opportunity for price discovery through bidding, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for this contract due to the lack of competitive pressure. Without multiple bids, the government has less leverage to negotiate the lowest possible price.

Public Impact

The primary beneficiaries are the Department of the Army, ensuring operational readiness of M-LIDS (Mobile Light Integrated Defense System) platforms. The contract delivers essential spare parts for navigation, guidance, and detection systems, crucial for mission success. Geographic impact is likely concentrated around Army installations where these systems are deployed or maintained. Workforce implications include support for manufacturing and logistics personnel at DRS Sustainment Systems, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs.
Lack of transparency in the justification for sole-sourcing.
Potential for vendor lock-in due to specialized nature of spares.

Positive Signals

Fixed-price contract type provides cost certainty once awarded.
Award to an established contractor (DRS Sustainment Systems, Inc.) may indicate reliability.
Contract supports critical military operational systems.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a niche within the broader aerospace and defense industry. This sector is characterized by high technological requirements and often involves specialized components. Comparable spending in this area is difficult to pinpoint without more specific product details, but it represents a critical segment for national defense capabilities.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the awardee is DRS Sustainment Systems, Inc., a large business. There is no explicit information regarding subcontracting plans for small businesses. The focus on specialized spares for a specific defense system may limit opportunities for broad small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the fixed-price contract type, requiring delivery of specified goods. Transparency is limited due to the sole-source nature of the award, with justifications for this approach needing to be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Procurement
Army Aviation and Missile Command Contracts
Navigation and Guidance System Manufacturing
Defense Logistics Agency Support Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to DRS SUSTAINMENT SYSTEMS, INC. M-LIDS SPARES DIVISION SET 3 &4

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 $12.8 million.

What is the period of performance?

Start: 2024-09-24. End: 2026-03-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED'. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, or the unavailability of other qualified contractors. Without further documentation, such as a Justification and Approval (J&A) document, the precise reasons remain unconfirmed. However, the specialized nature of spare parts for complex military systems like the M-LIDS often necessitates sole-sourcing to ensure compatibility and maintain operational effectiveness.

How does the unit cost of these spares compare to similar components in the market?

Direct comparison of unit costs for these specific spares is challenging without detailed product specifications and market data. The contract is for 'M-LIDS SPARES DIVISION SET 3 &4', suggesting a set of components rather than individual items. Furthermore, the sole-source nature of the award limits the availability of competitive pricing benchmarks. To assess value, one would need to compare the prices of individual components within the set against publicly available pricing for similar navigation, detection, or guidance system parts from other manufacturers or historical data from the same contractor, if available and comparable.

What are the potential risks associated with relying on a single supplier for these critical spares?

Relying on a single supplier, as is the case with this sole-source contract, presents several risks. Firstly, there's a risk of price escalation over time, as the government has limited leverage to negotiate lower prices without competition. Secondly, supply chain disruptions at the sole-source contractor's facility could directly impact the availability of critical spares, potentially grounding M-LIDS platforms. Thirdly, there's a risk of technological obsolescence if the sole-source provider does not invest in modernizing their offerings. Finally, vendor lock-in can occur, making it difficult and costly to switch suppliers in the future, even if alternatives become available.

What is the historical spending pattern for M-LIDS spares with DRS Sustainment Systems, Inc. or other vendors?

Analyzing historical spending patterns for M-LIDS spares is crucial for understanding long-term cost trends and identifying potential anomalies. Without access to a comprehensive contract database or specific historical award data for M-LIDS spares, it's difficult to provide a precise historical spending trajectory. However, if this is a recurring need, examining previous awards for similar spare parts to DRS Sustainment Systems, Inc. or other potential vendors would reveal whether spending has increased, decreased, or remained stable. A consistent increase in spending on spares, especially under sole-source conditions, could indicate rising maintenance costs or an aging fleet.

What is the expected impact of these spares on the operational readiness of the M-LIDS platforms?

The acquisition of these spare parts is directly linked to maintaining and enhancing the operational readiness of the Mobile Light Integrated Defense System (M-LIDS) platforms. M-LIDS are critical for various military operations, and their navigation, detection, and guidance systems are essential for effective deployment. By ensuring the availability of necessary spare components, this contract helps to minimize downtime due to equipment failure, reduces the time required for repairs, and ultimately increases the overall availability and reliability of the M-LIDS fleet for mission execution. This directly contributes to the warfighter's ability to perform their duties effectively.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: $12,786,596

Exercised Options: $12,786,596

Current Obligation: $12,786,596

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $7,609,402

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