DoD Spends $122.5M on 344 RWS Units from Kongsberg, Lacking Competition

Contract Overview

Contract Amount: $122,489,364 ($122.5M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2007-02-15

End Date: 2010-06-30

Contract Duration: 1,231 days

Daily Burn Rate: $99.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF 344 EACH, RWS BLOCK II UNITS TO SUPPORT CUSTOMER AND PM-STRYKER REQUIREMENTS.

Plain-Language Summary

Department of Defense obligated $122.5 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: PROCUREMENT OF 344 EACH, RWS BLOCK II UNITS TO SUPPORT CUSTOMER AND PM-STRYKER REQUIREMENTS. Key points: 1. Significant investment in weapon systems highlights modernization efforts. 2. Sole-source procurement raises concerns about price discovery and value. 3. Reliance on a single vendor may pose supply chain risks. 4. Precision turned product manufacturing sector involved.

Value Assessment

Rating: questionable

The contract value of $122.5 million for 344 units suggests a per-unit cost of approximately $356,330. Without competitive bidding, it's difficult to assess if this price is optimal or inflated compared to potential market alternatives.

Cost Per Unit: $356,330

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may have paid a premium for these RWS units, as the government did not leverage market forces to secure a lower price.

Public Impact

Taxpayers funded a significant sole-source contract for military hardware. The acquisition of RWS units supports ongoing defense operations and modernization. Lack of competition could set a precedent for future sole-source awards in this category.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpayment

Positive Signals

Supports critical defense requirements
Procurement of advanced weapon systems

Sector Analysis

The procurement falls within the defense sector, specifically related to weapon systems and precision manufacturing. Benchmarks for similar RWS units are difficult to establish due to the sole-source nature of this award.

Small Business Impact

There is no indication that small businesses were involved in this specific procurement, as it was awarded to a single, likely large, foreign vendor.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the Department of Defense received fair value and that the justification for not competing the contract was robust.

Related Government Programs

Precision Turned Product Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited vendor options for sustainment
Unknown value for money

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $122.5 million to KONGSBERG DEFENCE & AEROSPACE AS. PROCUREMENT OF 344 EACH, RWS BLOCK II UNITS TO SUPPORT CUSTOMER AND PM-STRYKER REQUIREMENTS.

Who is the contractor on this award?

The obligated recipient is KONGSBERG DEFENCE & AEROSPACE AS.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $122.5 million.

What is the period of performance?

Start: 2007-02-15. End: 2010-06-30.

What was the justification for awarding this contract on a sole-source basis, and were alternative solutions considered?

The provided data states the contract was 'NOT COMPETED,' implying a sole-source justification. A thorough review would be needed to understand the specific reasons, such as unique capabilities or urgent needs, and to confirm that no viable competitive alternatives were overlooked, ensuring taxpayer funds are used efficiently.

How does the per-unit cost of $356,330 compare to similar RWS systems acquired through competitive processes?

Without access to competitive benchmark data for comparable RWS Block II units, a direct cost comparison is challenging. However, this price point is substantial, and a lack of competition inherently raises concerns about whether it represents a fair market value or if a more competitive process could have yielded significant savings for the government.

What are the long-term implications of relying on a single vendor for critical RWS components, particularly regarding sustainment and future upgrades?

Sole-source reliance can create long-term dependencies, potentially leading to higher sustainment costs and limited options for future upgrades or technological advancements. It also poses risks to supply chain resilience, as the government may have fewer alternatives in case of vendor production issues or geopolitical disruptions.

Industry Classification

NAICS: Manufacturing › Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing › Precision Turned Product Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kongsberg Gruppen ASA (UEI: 518910914)

Address: KIRKEG?RDSVEIEN 45, KONGSBERG

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $122,489,364

Exercised Options: $122,489,364

Current Obligation: $122,489,364

Contract Characteristics

Cost or Pricing Data: YES

Timeline