Department of Defense awards $23.8M contract for body armor components, with KDH Defense Systems Inc. as the primary contractor

Contract Overview

Contract Amount: $23,805,241 ($23.8M)

Contractor: KDH Defense System, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-09-15

End Date: 2013-04-06

Contract Duration: 569 days

Daily Burn Rate: $41.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OCP SPCS W/ SOFT BALLISTICS&CUMMERBUND

Place of Performance

Location: EDEN, ROCKINGHAM County, NORTH CAROLINA, 27288

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $23.8 million to KDH DEFENSE SYSTEM, INC. for work described as: OCP SPCS W/ SOFT BALLISTICS&CUMMERBUND Key points: 1. The contract value of $23.8 million represents a significant investment in protective gear for military personnel. 2. Competition dynamics indicate a full and open process after initial source exclusion, suggesting a robust bidding environment. 3. The contract duration of 569 days points to a substantial, multi-year requirement for these specialized apparel items. 4. The fixed-price contract type suggests that cost risks are largely borne by the contractor, providing budget certainty. 5. The award to KDH Defense Systems, Inc. highlights their role in supplying critical defense equipment. 6. The North Carolina location of the contractor may have implications for regional economic impact and supply chain logistics.

Value Assessment

Rating: good

The contract's value of $23.8 million for body armor components appears reasonable given the specialized nature of the materials and manufacturing. Benchmarking against similar contracts for ballistic protection systems is crucial for a definitive value assessment. The firm fixed-price structure generally promotes cost control by the contractor, which can translate to better value for the government if performance is met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition after exclusion of sources' procedure. While the initial exclusion of sources might warrant further investigation, the subsequent full and open competition suggests that multiple bidders were ultimately allowed to participate. The presence of 3 bidders indicates a moderate level of competition, which is generally sufficient to drive competitive pricing.

Taxpayer Impact: A competitive bidding process, even with an initial exclusion, helps ensure that taxpayer funds are used efficiently by encouraging lower prices and better terms from contractors.

Public Impact

The primary beneficiaries are U.S. Army personnel who will receive enhanced ballistic protection through these components. The contract delivers essential components for body armor, directly contributing to soldier safety and operational readiness. The geographic impact is primarily centered around the Department of the Army's operational theaters, with components likely integrated into armor systems deployed globally. Workforce implications include support for manufacturing jobs within KDH Defense Systems, Inc. and its supply chain, particularly in North Carolina.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if KDH Defense Systems faces production issues.
The 'after exclusion of sources' clause in the competition type could indicate prior issues or specific requirements that limited the initial pool of bidders.

Positive Signals

Award to an established defense contractor with a track record in protective equipment.
Firm fixed-price contract type provides cost certainty for the government.
Full and open competition, even if preceded by source exclusion, generally leads to better pricing.

Sector Analysis

The 'All Other Cut and Sew Apparel Manufacturing' sector encompasses a wide range of textile-based products. Within the defense industry, this sub-sector is critical for producing uniforms, protective gear, and specialized equipment. The market for ballistic protection is highly specialized and driven by stringent performance requirements and technological advancements. This contract fits within the broader defense procurement landscape for personal protective equipment (PPE), where spending is often substantial and driven by ongoing operational needs and modernization efforts.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside consideration (ss: false, sb: false). This suggests that the contract was not specifically targeted to small businesses. However, KDH Defense Systems, Inc., as a prime contractor, may engage small businesses for subcontracting opportunities related to materials, logistics, or specialized manufacturing processes, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Body Armor Procurement
Personal Protective Equipment (PPE)
U.S. Army Soldier Systems
Defense Apparel Manufacturing
Ballistic Materials Research

Risk Flags

Potential supply chain vulnerability for specialized materials.
Contract performance risk associated with manufacturing quality and delivery timelines.
Need for ongoing market research to ensure competitive pricing for future procurements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.8 million to KDH DEFENSE SYSTEM, INC.. OCP SPCS W/ SOFT BALLISTICS&CUMMERBUND

Who is the contractor on this award?

The obligated recipient is KDH DEFENSE SYSTEM, 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 $23.8 million.

What is the period of performance?

Start: 2011-09-15. End: 2013-04-06.

What is the track record of KDH Defense Systems, Inc. in fulfilling defense contracts, particularly for body armor?

KDH Defense Systems, Inc. has a history of supplying protective equipment to the U.S. military. While specific details on past performance for body armor components are not provided in this data snippet, their role as a contractor in this award suggests they possess the necessary certifications, manufacturing capabilities, and experience to meet the stringent requirements of the Department of Defense. A deeper dive into their contract history, including any past performance reviews or awards for similar items, would provide a more comprehensive understanding of their reliability and expertise in this critical area. Analyzing their on-time delivery rates and quality control measures on previous contracts would further illuminate their capabilities.

How does the awarded price of $23.8 million compare to market rates for similar ballistic protection components?

A direct comparison of the $23.8 million total contract value to 'market rates' for ballistic protection components is challenging without detailed specifications of the materials, performance standards, and quantities involved. However, the firm fixed-price nature of the contract implies that KDH Defense Systems, Inc. has factored in their costs and profit margins to arrive at a competitive bid. To assess value for money, one would typically benchmark the per-unit cost against historical awards for similar items by the Department of Defense or other federal agencies, considering factors like inflation, technological advancements, and the specific threat environment the armor is designed to counter. The number of bidders (3) suggests some level of competitive pressure on pricing.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks for this contract include potential supply chain disruptions for specialized ballistic materials, manufacturing defects, or delays in delivery. The firm fixed-price contract type mitigates financial risk for the government, as cost overruns are the contractor's responsibility. Mitigation strategies employed by the Department of Defense likely include rigorous quality assurance inspections during manufacturing and upon delivery, performance bonds, and clear contract clauses for non-performance. KDH Defense Systems, Inc. would also have internal risk management processes to ensure material sourcing and production timelines are met to avoid penalties and maintain their reputation.

What is the expected effectiveness of the body armor components procured under this contract in enhancing soldier survivability?

The effectiveness of the body armor components hinges on their adherence to specified ballistic protection standards (e.g., NIJ or specific military standards) and their integration into the complete body armor system. Assuming KDH Defense Systems, Inc. met all technical requirements and passed stringent testing, these components are designed to significantly enhance soldier survivability against specific threats, such as fragmentation and certain types of ballistic projectiles. The contract's focus on 'soft ballistics & cummerbund' suggests these are critical elements for comfort, mobility, and protection against less severe threats or as part of a layered defense system. The actual effectiveness in the field is a combination of the material's inherent protective qualities and the soldier's proper use of the equipment.

How has federal spending on body armor and related protective equipment evolved over the past decade?

Federal spending on body armor and related protective equipment has seen significant fluctuations, particularly influenced by military operations in Iraq and Afghanistan. Post-2001, spending surged to equip troops with advanced protection. As major conflicts wound down, spending generally decreased but has remained substantial due to ongoing modernization needs, technological upgrades, and the continuous requirement for troop protection in various theaters. Factors like emerging threats, new material science, and evolving threat assessments continually drive investment. Analyzing historical spending data from sources like the Department of Defense's budget requests and contract databases would reveal trends in procurement volumes and the types of protective gear being prioritized.

Industry Classification

NAICS: Manufacturing › Cut and Sew Apparel Manufacturing › All Other Cut and Sew Apparel Manufacturing

Product/Service Code: TEXTILE/LEATHER/FUR; TENT; FLAG

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91CRB11R0021

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: KDH Defense Systems, Inc. (UEI: 142984124)

Address: 750 W FIELDCREST RD STE A, EDEN, NC, 05

Business Categories: Category Business, HUBZone Firm, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $37,867,526

Exercised Options: $23,805,241

Current Obligation: $23,805,241

Contract Characteristics

Cost or Pricing Data: NO

Timeline