DoD awards $10.9M for Abrams tank software and support, with limited competition

Contract Overview

Contract Amount: $10,943,090 ($10.9M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2024-03-22

End Date: 2025-05-22

Contract Duration: 426 days

Daily Burn Rate: $25.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DSESTS REPAIR AND STS: FUND 49,085 HOURS FOR ABRAMS M1A2 DSESTS, CAP, MSD, AND SL/V SOFTWARE AND FSR SUPPORT.

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $10.9 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: DSESTS REPAIR AND STS: FUND 49,085 HOURS FOR ABRAMS M1A2 DSESTS, CAP, MSD, AND SL/V SOFTWARE AND FSR SUPPORT. Key points: 1. Contract focuses on critical software and field support for Abrams M1A2 tanks. 2. Sole-source award raises concerns about price discovery and potential overpayment. 3. Long contract duration (426 days) requires careful performance monitoring. 4. High number of hours funded (49,085) indicates significant operational reliance. 5. Contractor has a history of supporting similar defense systems. 6. Geographic focus on Florida for support services.

Value Assessment

Rating: fair

The contract's value of $10.9 million for 49,085 hours of support is difficult to benchmark without more detailed cost breakdowns. Given the sole-source nature, it's challenging to assess if this represents a competitive price. The Cost Plus Fixed Fee (CPFF) structure can incentivize cost overruns if not closely managed. Further analysis of historical pricing for similar support services would be needed to determine true value for money.

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 Network & Imaging Systems LLC, was solicited. This significantly limits competition and bypasses the standard procurement process designed to ensure the best value through open bidding. The lack of competition means the government did not explore alternative solutions or pricing from other qualified contractors.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also reduces transparency in the procurement process.

Public Impact

US Army personnel operating and maintaining Abrams M1A2 tanks will benefit from enhanced software and field support. Services include support for DSESTS, CAP, MSD, and SL/V software, crucial for tank operational readiness. The contract's geographic focus is Florida, indicating where a portion of the support services will be delivered. Workforce implications include the need for specialized technical support personnel, potentially employed by the contractor in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Cost Plus Fixed Fee contract type requires stringent oversight to prevent cost overruns.
Lack of detailed cost breakdown makes value assessment difficult.
Long contract duration increases the risk of scope creep or changing requirements.

Positive Signals

Contractor has existing expertise in supporting similar defense systems.
Focus on critical software and support enhances military readiness.
Clear definition of funded hours provides a baseline for performance.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on military armored vehicle components and associated software. The market for specialized support and upgrades for legacy systems like the Abrams tank is often concentrated among a few key contractors. Spending in this area is driven by the need to maintain and modernize aging but critical military hardware, ensuring operational readiness and technological superiority.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific procurement. The primary contractor, DRS Network & Imaging Systems LLC, is likely a large business, and the direct impact on the small business ecosystem for this particular contract appears minimal.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will be critical, particularly regarding cost control and performance monitoring. The Department of the Army, as the procuring agency, is responsible for ensuring the contractor meets all performance requirements and stays within the funded limits. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Abrams Tank Systems
Military Software Development
Defense Logistics Support
Armored Vehicle Maintenance
Department of Defense IT Services

Risk Flags

Sole Source Award
Cost Plus Fixed Fee Contract Type
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.9 million to DRS NETWORK & IMAGING SYSTEMS LLC. DSESTS REPAIR AND STS: FUND 49,085 HOURS FOR ABRAMS M1A2 DSESTS, CAP, MSD, AND SL/V SOFTWARE AND FSR SUPPORT.

Who is the contractor on this award?

The obligated recipient is DRS NETWORK & IMAGING SYSTEMS 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 $10.9 million.

What is the period of performance?

Start: 2024-03-22. End: 2025-05-22.

What is the track record of DRS Network & Imaging Systems LLC in supporting similar defense contracts, particularly for the Abrams platform?

DRS Network & Imaging Systems LLC, a subsidiary of Leonardo DRS, has a significant history of providing advanced technology solutions and support services to the U.S. military, including the Army. They are known for their work on various vehicle systems, electronics, and communication equipment. While specific details on their performance for the Abrams M1A2 DSESTS, CAP, MSD, and SL/V software are not fully detailed in this summary, their general profile suggests they possess the requisite expertise. Past performance evaluations and contract histories would provide a more granular view of their reliability, quality of service, and adherence to schedules and budgets on similar defense contracts. This information is typically available through government contract databases and performance reporting systems.

How does the funded hourly rate compare to industry benchmarks for specialized defense software support?

Determining a precise funded hourly rate from the provided data is challenging because the contract is Cost Plus Fixed Fee (CPFF), and the total award amount ($10.9M) covers 49,085 hours. This means the average loaded hourly rate is approximately $224. However, this figure includes all direct and indirect costs, profit, and fee. Without a detailed cost breakdown from the contractor, it's difficult to isolate the labor rate. Furthermore, CPFF contracts often have higher average hourly costs than fixed-price contracts due to the risk transfer to the government. Benchmarking this against industry standards for highly specialized defense software and field support, especially for a platform as complex as the Abrams tank, requires access to proprietary cost data or specialized market analysis reports. Given the sole-source nature, a direct comparison to competitive bids is not possible.

What are the primary risks associated with a sole-source award for critical military software support?

The primary risks associated with a sole-source award for critical military software support include inflated pricing due to the lack of competition, potential for reduced innovation as the contractor faces no pressure to improve services or offer better solutions, and a higher likelihood of vendor lock-in. Taxpayers may end up paying more than necessary. Furthermore, the government has limited leverage to negotiate favorable terms or pricing. There's also a risk that the sole-source provider might deprioritize this contract if they have more lucrative opportunities, potentially impacting service delivery timelines and quality. Ensuring robust contract oversight and performance metrics becomes even more crucial in sole-source situations to mitigate these inherent risks.

What is the expected impact of this contract on the operational readiness of the Abrams M1A2 fleet?

This contract is expected to have a positive impact on the operational readiness of the Abrams M1A2 fleet by ensuring the continued availability and functionality of critical software and providing essential field support. The funding covers support for DSESTS, CAP, MSD, and SL/V software, which are integral to the tank's advanced capabilities, including targeting, diagnostics, and command and control systems. By addressing software issues, providing updates, and offering on-site technical assistance (FSR support), the contract aims to minimize downtime, resolve technical glitches promptly, and maintain the tanks' combat effectiveness. This sustained support is crucial for a platform as complex and vital as the Abrams, ensuring it remains a formidable asset in the U.S. Army's arsenal.

How does current spending on Abrams tank support compare to historical trends for this platform?

Analyzing current spending on Abrams tank support relative to historical trends requires access to comprehensive historical contract data for the Abrams program. The provided data point of $10.9 million for software and field support represents a specific task order for a defined period (approx. 14 months). Historical spending would encompass a broader range of activities, including major upgrades, spare parts procurement, depot-level maintenance, and various support services over the tank's lifecycle. Without comparative figures for previous years or similar support contracts, it's impossible to determine if this $10.9 million award is higher or lower than historical averages or if it reflects an increasing or decreasing trend in support costs. Factors like inflation, technological advancements, and changes in operational tempo significantly influence year-over-year spending.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

Address: 100 N BABCOCK ST, MELBOURNE, FL, 32935

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: $10,943,090

Exercised Options: $10,943,090

Current Obligation: $10,943,090

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV24D0010

IDV Type: IDC

Timeline