DoD awards $437M contract for ten PSS-T systems and payloads to TCOM, L.P. for Saudi Arabia

Contract Overview

Contract Amount: $437,085,661 ($437.1M)

Contractor: Tcom, L.P.

Awarding Agency: Department of Defense

Start Date: 2021-08-26

End Date: 2029-01-24

Contract Duration: 2,708 days

Daily Burn Rate: $161.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMS PURCHASE OF TEN PSS-T SYSTEMS AND PAYLOADS FOR THE KINGDOM OF SAUDI ARABIA.

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21046

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $437.1 million to TCOM, L.P. for work described as: FMS PURCHASE OF TEN PSS-T SYSTEMS AND PAYLOADS FOR THE KINGDOM OF SAUDI ARABIA. Key points: 1. Contract awarded to TCOM, L.P. for a significant value, indicating a substantial investment in specialized defense systems. 2. The nature of the award, a definitive contract, suggests a long-term commitment and established relationship. 3. The specific systems (PSS-T) and payloads point to advanced technological capabilities being transferred or supplied. 4. The geographic destination (Kingdom of Saudi Arabia) highlights the international scope of U.S. defense sales and partnerships. 5. The contract duration of over 2700 days implies a complex integration and support requirement. 6. The absence of a small business set-aside suggests the prime contractor is likely a large entity.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific details on the PSS-T systems and payloads. The $437 million price tag for ten systems is substantial, averaging over $43 million per system. Without comparable sales data or detailed cost breakdowns, it's difficult to definitively assess value for money. However, given the specialized nature of defense equipment, particularly for foreign military sales, costs can be significantly higher than domestic equivalents due to unique configurations, support, and profit margins.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicated by 'NOT AVAILABLE FOR COMPETITION'. This suggests that either only one source was capable of providing the required PSS-T systems and payloads, or there were specific circumstances (e.g., urgent need, unique technology) that precluded a competitive process. The lack of competition means that the government did not explore alternative solutions or pricing from multiple vendors, potentially leading to higher costs than if it had been competed.

Taxpayer Impact: The absence of competition means taxpayers may have paid a premium, as there was no pressure from competing bids to drive down the price. This also limits transparency into the true market cost for such systems.

Public Impact

The primary beneficiaries are the Kingdom of Saudi Arabia, which will receive advanced surveillance and targeting systems. The U.S. Department of Defense facilitates this foreign military sale, enhancing the capabilities of a key regional partner. The contract supports the U.S. defense industrial base, specifically TCOM, L.P., and its supply chain. The delivery and integration of these systems could have implications for regional security dynamics. The contract involves the transfer of sophisticated technology, potentially impacting the technological advantage of the recipient nation.

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 significant dollar amount and sole-source nature warrant close scrutiny of cost justification and performance metrics.
Foreign military sales can be complex, introducing geopolitical risks and potential for misuse of transferred technology.
The long contract duration increases the risk of cost overruns and schedule delays.
Limited public information on the specific PSS-T systems makes independent assessment of necessity and effectiveness difficult.

Positive Signals

The contract supports a key U.S. foreign policy objective by bolstering the defense capabilities of an allied nation.
Awarding to TCOM, L.P. leverages their specialized expertise in the PSS-T systems, ensuring a high-quality product.
The firm fixed-price contract structure shifts some of the cost risk to the contractor.
The definitive contract type suggests a structured and well-defined acquisition process.
The contract contributes to the U.S. defense industrial base and supports high-tech manufacturing jobs.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on surveillance and targeting systems. The market for such specialized defense equipment is often characterized by high barriers to entry due to technological complexity, intellectual property, and stringent regulatory requirements. Spending in this sub-sector is driven by national security needs, geopolitical alliances, and technological advancements. Comparable spending benchmarks would typically involve other foreign military sales of similar advanced surveillance platforms or large domestic procurement programs for reconnaissance assets.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the prime contractor, TCOM, L.P., is likely a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contractors often utilize small businesses for various components and services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, specifically within the Department of the Army. As a foreign military sale, additional oversight may be provided by the Defense Security Cooperation Agency (DSCA). Transparency is limited due to the sole-source nature and foreign customer; however, standard DoD procurement regulations and reporting requirements would apply. Inspector General jurisdiction would cover allegations of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales (FMS)
Defense Security Cooperation Agency (DSCA) Programs
Aerospace and Defense Procurement
Surveillance and Reconnaissance Systems
Department of the Army Contracts

Risk Flags

Sole-source award limits price competition.
High contract value requires diligent oversight.
Long contract duration increases risk of cost escalation and obsolescence.
Foreign military sales introduce geopolitical complexities.
Limited public information on system specifics hinders independent assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $437.1 million to TCOM, L.P.. FMS PURCHASE OF TEN PSS-T SYSTEMS AND PAYLOADS FOR THE KINGDOM OF SAUDI ARABIA.

Who is the contractor on this award?

The obligated recipient is TCOM, L.P..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $437.1 million.

What is the period of performance?

Start: 2021-08-26. End: 2029-01-24.

What is the specific nature and capability of the PSS-T systems and payloads being procured?

The provided data does not detail the specific capabilities of the PSS-T (Persistent Surveillance Systems - Tactical) systems and payloads. However, based on industry knowledge, PSS-T systems are typically advanced aerial platforms designed for long-endurance surveillance and reconnaissance missions. They often incorporate sophisticated sensors, including electro-optical/infrared (EO/IR) cameras, radar, and signals intelligence (SIGINT) equipment, to provide persistent monitoring over extended periods. The 'payloads' likely refer to the specific sensor packages or mission equipment integrated onto the PSS-T platform. The 'ten systems' suggest a significant operational deployment capability for the Kingdom of Saudi Arabia, likely intended for border security, counter-terrorism, or regional monitoring.

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

The justification for a sole-source award, indicated as 'NOT AVAILABLE FOR COMPETITION,' typically stems from a determination that only one responsible source is capable of meeting the government's needs. This could be due to unique technological capabilities, proprietary information, critical infrastructure dependencies, or urgent and compelling requirements where competition is not feasible. For specialized defense systems like the PSS-T, it's plausible that TCOM, L.P. possesses unique intellectual property, manufacturing processes, or essential expertise that cannot be replicated by other firms within the required timeframe or to the required specifications. A formal Justification and Approval (J&A) document would normally detail these reasons.

How does the average cost per system ($43.7 million) compare to similar defense surveillance platforms?

Comparing the average cost of $43.7 million per PSS-T system is difficult without specific technical and configuration details. However, high-altitude, long-endurance (HALE) or persistent surveillance platforms are inherently expensive due to their advanced technology, complex sensors, and long operational lifespans. For context, other advanced aerial surveillance systems, such as certain unmanned aerial vehicles (UAVs) or specialized aircraft, can range from tens of millions to hundreds of millions of dollars depending on their capabilities, payload, and intended mission. The cost also includes significant support, training, and integration elements, especially for foreign military sales. Without a direct comparison of systems with identical capabilities and support packages, this figure represents a high-value acquisition.

What are the potential risks associated with the long contract duration (2708 days)?

The extended duration of 2708 days (approximately 7.4 years) for this contract introduces several potential risks. Firstly, there is an increased likelihood of cost growth due to inflation, potential changes in material costs, and evolving labor rates over such a long period, even with a firm fixed-price contract, if scope changes or unforeseen issues arise. Secondly, technological obsolescence is a risk; the PSS-T systems might become outdated before the end of their service life, requiring costly upgrades or replacements. Thirdly, contractor performance risk increases with duration; maintaining consistent quality and responsiveness over nearly eight years can be challenging. Finally, geopolitical shifts or changes in the end-user's strategic needs could impact the relevance or utility of the systems, potentially leading to contract modifications or disputes.

What is the track record of TCOM, L.P. in delivering similar defense systems, particularly for international clients?

TCOM, L.P. is known for its expertise in designing, manufacturing, and operating aerostats and related persistent surveillance systems. They have a history of providing such platforms for various government and commercial applications, including border security, intelligence gathering, and communications relays. While specific details on their track record for delivering ten PSS-T systems to Saudi Arabia are not in the provided data, their general experience in the persistent surveillance market suggests a capability to handle complex projects. International sales and foreign military cooperation are common for companies in this sector, indicating TCOM likely has experience navigating the complexities of international contracts, logistics, and customer support.

What are the implications of this contract for U.S. national security and foreign policy objectives?

This contract, as a Foreign Military Sale (FMS), directly supports U.S. national security and foreign policy objectives by enhancing the defense capabilities of a key partner in a strategically important region. Providing advanced surveillance and targeting systems like the PSS-T to the Kingdom of Saudi Arabia can bolster their ability to address regional threats, maintain stability, and potentially act as a counterweight to adversaries. Such sales also strengthen bilateral relationships, foster interoperability, and promote U.S. defense industry capabilities abroad, reinforcing U.S. influence and security interests. The transfer of technology is carefully managed to align with U.S. strategic goals and prevent proliferation risks.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56KGY21R0003

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7115 THOMAS EDISON DR, COLUMBIA, MD, 21046

Business Categories: Category Business, Manufacturer of Goods, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $437,085,661

Exercised Options: $437,085,661

Current Obligation: $437,085,661

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline