DoD's $27.3M fuel pump system contract awarded to DRS Sustainment Systems, Inc. without competition

Contract Overview

Contract Amount: $27,350,563 ($27.4M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2019-01-02

End Date: 2023-01-31

Contract Duration: 1,490 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACQUISITION IS FOR THE MODULAR FUEL SYSTEM PUMP RACK MODULE AND SUPPORTING HARDWARE.

Place of Performance

Location: BRIDGETON, SAINT LOUIS County, MISSOURI, 63044

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $27.4 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: ACQUISITION IS FOR THE MODULAR FUEL SYSTEM PUMP RACK MODULE AND SUPPORTING HARDWARE. Key points: 1. The contract value of $27.3M for fuel pump systems appears to be a significant investment in specialized equipment. 2. Awarded without competition, this contract raises questions about potential price discovery and market competitiveness. 3. The duration of the contract (1490 days) suggests a long-term need for these modular fuel system components. 4. The firm-fixed-price structure aims to transfer risk to the contractor, but the lack of competition may limit its effectiveness. 5. The procurement falls under the 'Measuring, Dispensing, and Other Pumping Equipment Manufacturing' NAICS code, indicating a niche industrial focus. 6. The contract's performance period spans from early 2019 to early 2023, covering a substantial operational timeframe.

Value Assessment

Rating: questionable

Benchmarking the value of this $27.3M contract is challenging without more detailed specifications of the modular fuel system pump rack module and supporting hardware. However, the absence of competition is a significant red flag. Typically, competitive bidding leads to better pricing for the government. Without this process, it's difficult to ascertain if DRS Sustainment Systems, Inc. provided the best possible value for the funds expended. The firm-fixed-price contract type is appropriate for mitigating cost overruns, but the lack of competitive pressure could mean the 'fixed' price was not optimized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source procurement. This means the Department of the Army identified a specific contractor, DRS Sustainment Systems, Inc., and did not solicit bids from other potential suppliers. The reasons for this sole-source award are not provided but could stem from factors like proprietary technology, urgent need, or lack of available alternatives. The limited competition means there was no direct price comparison or market pressure to drive down costs.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most cost-effective solution, as the government did not leverage competitive market forces to secure the best price.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential hardware for its fuel systems. The contract delivers modular fuel system pump rack modules and supporting hardware, crucial for military operations. The geographic impact is primarily within Missouri, where DRS Sustainment Systems, Inc. is located, and wherever the Army deploys these systems. Workforce implications include employment at DRS Sustainment Systems, Inc. and potentially at subcontractors involved in manufacturing or support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to a higher price than a competed contract.
Limited transparency into the justification for a sole-source award.
Potential for contractor lock-in if this is a specialized, proprietary system.
Firm-fixed-price may not be as advantageous without competitive pressure.

Positive Signals

Awarded to a single, established contractor (DRS Sustainment Systems, Inc.).
Firm-fixed-price contract type helps control costs.
Contract duration indicates a sustained need and potential for reliable supply.
Procurement falls within a specific manufacturing sector, suggesting specialized capabilities.

Sector Analysis

This contract falls within the industrial manufacturing sector, specifically 'Measuring, Dispensing, and Other Pumping Equipment Manufacturing.' The market for such specialized military hardware is often characterized by a limited number of qualified suppliers due to high technical requirements and stringent quality standards. While the overall market size for this niche is difficult to quantify without further data, defense spending on equipment maintenance and operational readiness represents a significant portion of the federal budget. This contract fits within the broader category of defense logistics and sustainment spending.

Small Business Impact

The data indicates that small business participation was not a stated factor in this contract, as 'sb' is false and 'ss' is false. There is no indication of a small business set-aside or any subcontracting requirements specifically targeting small businesses. This suggests that the primary contractor, DRS Sustainment Systems, Inc., likely handled the entire scope of work or subcontracted to other large businesses. The impact on the small business ecosystem is minimal for this specific award, as it did not prioritize or mandate small business involvement.

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 firm-fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award; the justification for not competing the contract would be a key document for assessing transparency. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Logistics and Sustainment
Army Equipment Procurement
Fuel System Components
Manufacturing Equipment Contracts
Sole-Source Defense Acquisitions

Risk Flags

Lack of Competition
Sole-Source Award Justification Unclear
Potential for Non-Competitive Pricing
Limited Transparency on Award Basis

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.4 million to DRS SUSTAINMENT SYSTEMS, INC. ACQUISITION IS FOR THE MODULAR FUEL SYSTEM PUMP RACK MODULE AND SUPPORTING HARDWARE.

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 $27.4 million.

What is the period of performance?

Start: 2019-01-02. End: 2023-01-31.

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

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. However, the specific justification for this determination is not included in the data. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, there is an urgent and compelling need, or the acquisition is for a unique product or technology. Without the official justification document (often a Justification and Approval, or J&A), it is impossible to definitively state why competition was excluded for this $27.3 million contract for modular fuel system pump rack modules and supporting hardware.

How does the $27.3 million contract value compare to similar procurements for fuel system components?

Direct comparison of the $27.3 million contract value for 'modular fuel system pump rack module and supporting hardware' to similar procurements is difficult without more specific details on the exact technical specifications, quantity, and scope of work. The 'Measuring, Dispensing, and Other Pumping Equipment Manufacturing' NAICS code covers a broad range of products. However, given the sole-source nature and the firm-fixed-price structure, it is crucial to assess whether this value represents a fair and reasonable price. Benchmarking against other sole-source awards for highly specialized or proprietary defense components might offer some context, but a true value-for-money assessment would ideally involve comparing it to prices achieved through competitive bidding for comparable systems, which is absent here.

What are the primary risks associated with a sole-source contract of this magnitude?

The primary risks associated with a sole-source contract of this $27.3 million magnitude include potential overpricing due to the lack of competitive pressure, reduced innovation from the absence of market alternatives, and the risk of contractor performance issues without the leverage of competing offers. Taxpayers may not receive the best value for their money. Furthermore, sole-source awards can create a perception of favoritism or a lack of due diligence in exploring market capabilities. For the government, there's also the risk of becoming overly reliant on a single supplier, which can be problematic if that supplier faces financial difficulties or changes its business strategy.

What is the significance of the 'firm fixed price' contract type in this context?

The 'firm fixed price' (FFP) contract type is significant because it places the primary responsibility for cost control and performance risk on the contractor, DRS Sustainment Systems, Inc. Under an FFP agreement, the contractor agrees to a total price for a well-defined scope of work, and is entitled to the profit or loss resulting from their ability to manage costs effectively. This contract type is generally preferred by the government when the scope of work is clearly defined and there is minimal uncertainty. In this sole-source context, while FFP aims to provide cost certainty, the absence of competition means the government did not have the benefit of market forces to help establish a competitive 'fixed' price.

What does the contract duration of 1490 days imply about the nature of the requirement?

A contract duration of 1490 days, which is approximately four years (from January 2, 2019, to January 31, 2023), implies a long-term, sustained requirement for the modular fuel system pump rack module and supporting hardware. This duration suggests that these components are critical for ongoing operations or a specific program phase that extends over several years. It indicates a need for reliable supply chain management and consistent product availability. Such extended periods often involve complex manufacturing processes or integration into larger systems, necessitating a stable contractual relationship rather than short-term, ad-hoc procurements.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Measuring, Dispensing, and Other Pumping Equipment Manufacturing

Product/Service Code: MAINT/REPAIR SHOP EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV17R0031

Offers Received: 1

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, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $27,350,563

Exercised Options: $27,350,563

Current Obligation: $27,350,563

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $1,872,341

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline