DoD awards $429M contract to Danbury Mission Technologies for electronic components, raising value-for-money questions

Contract Overview

Contract Amount: $42,943,836 ($42.9M)

Contractor: Danbury Mission Technologies, LLC

Awarding Agency: Department of Defense

Start Date: 2023-08-29

End Date: 2026-08-13

Contract Duration: 1,080 days

Daily Burn Rate: $39.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MINIMUM GUARANTEE DELIVERY ORDER FROM BASE W56HZV23D0066

Place of Performance

Location: DANBURY, FAIRFIELD County, CONNECTICUT, 06810

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $42.9 million to DANBURY MISSION TECHNOLOGIES, LLC for work described as: MINIMUM GUARANTEE DELIVERY ORDER FROM BASE W56HZV23D0066 Key points: 1. The contract's value of $429 million for electronic components suggests a significant investment, necessitating careful scrutiny of pricing and performance. 2. The 'NOT COMPETED' status indicates a lack of competitive bidding, potentially leading to higher costs for taxpayers. 3. The contract duration of 1080 days (3 years) allows for a substantial period of service delivery, but also extends the risk exposure. 4. The firm fixed-price contract type offers cost certainty but shifts performance risk to the contractor. 5. The North American Industry Classification System (NAICS) code 334419 points to a specialized manufacturing sector, requiring specific expertise. 6. The award to Danbury Mission Technologies, LLC, warrants an examination of their past performance and capacity for such a large-scale delivery.

Value Assessment

Rating: questionable

The awarded amount of $429 million for electronic components is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The firm fixed-price nature provides cost certainty, but the absence of competition raises concerns about whether the government secured the best possible value. Further analysis of the specific components and their market prices is 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 justification for this approach is not provided in the data. A lack of competition can limit price discovery and potentially lead to less favorable terms for the government compared to an open bidding process. It is crucial to understand why this contract was not competed to ensure fair pricing and access to the best available solutions.

Taxpayer Impact: When a contract is not competed, taxpayers may not benefit from the cost savings that typically arise from competitive bidding. This can result in higher overall spending for the government.

Public Impact

The primary beneficiaries are likely the Department of the Army and potentially other Department of Defense entities requiring these specific electronic components. The contract will deliver essential electronic components, crucial for various defense systems and operations. The geographic impact is primarily tied to the contractor's location and the deployment of the defense systems utilizing these components. Workforce implications may include job creation or retention at Danbury Mission Technologies, LLC, and potentially within the broader defense supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and suboptimal value for taxpayer funds.
The substantial contract value over three years increases the financial risk exposure if performance issues arise.
Limited transparency into the justification for a sole-source award hinders a full assessment of procurement integrity.
Dependence on a single contractor for critical electronic components could pose supply chain risks.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government, mitigating budget uncertainty.
The contract duration allows for sustained delivery of critical components, supporting ongoing defense readiness.
Awarding to an established entity like Danbury Mission Technologies, LLC, may leverage existing expertise and infrastructure.

Sector Analysis

This contract falls within the electronic component manufacturing sector, a critical part of the broader electronics industry. This sector is characterized by rapid technological advancements, complex supply chains, and significant global competition. The market size for electronic components is vast, supporting numerous industries including defense, telecommunications, and consumer electronics. Benchmarking spending in this area requires comparing the unit costs and overall value against similar defense-specific component procurements or commercial equivalents, considering the specialized nature of defense requirements.

Small Business Impact

The data indicates that small business participation (sb) is false and the contract was not set aside for small businesses (ss is false). This suggests that the primary awardee is likely a large business, and there is no explicit indication of subcontracting opportunities for small businesses within this specific award data. Further investigation into the contractor's subcontracting plans would be necessary to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily 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 places performance risk on the contractor. Transparency is limited by the lack of a competitive bidding process and detailed justification for the sole-source award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement Data
Electronic Component Manufacturing Contracts
Army Systems Command Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Lack of competition
High contract value
Potential for overpricing
Supply chain risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.9 million to DANBURY MISSION TECHNOLOGIES, LLC. MINIMUM GUARANTEE DELIVERY ORDER FROM BASE W56HZV23D0066

Who is the contractor on this award?

The obligated recipient is DANBURY MISSION TECHNOLOGIES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $42.9 million.

What is the period of performance?

Start: 2023-08-29. End: 2026-08-13.

What is Danbury Mission Technologies, LLC's track record with the Department of Defense, particularly on similar large-value contracts?

A review of Danbury Mission Technologies, LLC's contract history with the Department of Defense is essential to assess their performance and reliability. While the provided data does not detail their past performance, a comprehensive analysis would involve examining previous awards, delivery timeliness, quality of components, and any history of contract disputes or terminations. Understanding their experience with firm fixed-price contracts and sole-source awards of this magnitude would provide crucial context for evaluating the current award's risk profile. Their ability to consistently meet stringent defense requirements and manage complex supply chains for electronic components is a key factor in determining their suitability for this significant contract.

How does the $429 million contract value compare to similar electronic component procurements by the DoD or other federal agencies?

Benchmarking the $429 million contract value against similar procurements is critical for assessing value for money, especially given the sole-source nature of this award. A thorough comparison would involve identifying contracts for comparable electronic components, considering factors like technical specifications, volume, and delivery timelines. Analyzing the average price per unit or per function across these comparable contracts can reveal whether Danbury Mission Technologies' pricing is within an expected range. Without competitive bidding, it is challenging to ascertain if this value represents a fair market price or if potential cost efficiencies were forgone. This comparison is vital for ensuring taxpayer funds are used efficiently.

What are the specific risks associated with a sole-source award for critical electronic components, and how are they being mitigated?

Sole-source awards for critical electronic components carry inherent risks, including potential overpricing due to a lack of competition, limited innovation, and increased vulnerability to supply chain disruptions if the sole provider faces issues. The absence of competitive pressure might reduce the incentive for the contractor to offer the most cost-effective solutions or to proactively address emerging technological needs. Mitigation strategies typically involve rigorous negotiation of terms, detailed performance specifications, robust oversight, and potentially establishing alternative sources or contingency plans. The government must ensure that the justification for the sole-source award is robust and that ongoing monitoring effectively addresses these risks throughout the contract's lifecycle.

What is the expected impact of this contract on the availability and cost of electronic components for other defense programs?

This $429 million contract could potentially impact the availability and cost of electronic components for other defense programs. If Danbury Mission Technologies, LLC dedicates a significant portion of its production capacity or key resources to fulfilling this order, it might lead to longer lead times or increased prices for other government procurements seeking similar components. Conversely, the large volume of this order could allow the contractor to achieve economies of scale, potentially stabilizing or even reducing costs if these efficiencies are passed on. The specific nature of the components and their commonality across different defense systems will determine the extent of this impact. Close coordination between contracting offices is necessary to manage potential resource conflicts and ensure overall cost-effectiveness.

What are the historical spending patterns for electronic components by the Department of the Army, and how does this award fit within those trends?

Analyzing historical spending patterns for electronic components by the Department of the Army provides context for the $429 million award. This involves examining the total annual expenditure on such components over several fiscal years, identifying major suppliers, and noting trends in contract types (e.g., competitive vs. sole-source) and average contract values. Understanding these patterns helps determine if this award represents a significant increase or deviation from historical norms. It also sheds light on the Army's reliance on specific types of components or contractors. If historical data shows a trend towards sole-source awards in this category, it might indicate specific market dynamics or strategic sourcing decisions, but it also underscores the need for continued scrutiny of value and competition.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 WOOSTER HTS, DANBURY, CT, 06810

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,943,836

Exercised Options: $42,943,836

Current Obligation: $42,943,836

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV23D0066

IDV Type: IDC

Timeline