DoD awards $29.8M for LRIP optical instruments, with a significant portion allocated to a single contractor

Contract Overview

Contract Amount: $29,797,320 ($29.8M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2021-04-30

End Date: 2024-07-01

Contract Duration: 1,158 days

Daily Burn Rate: $25.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS DELIVERY ORDER PROCURES THE LOW RATE INITIAL PRODUCTION QUANTITY

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $29.8 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: THIS DELIVERY ORDER PROCURES THE LOW RATE INITIAL PRODUCTION QUANTITY Key points: 1. Value for money assessed against comparable optical instrument procurements. 2. Competition dynamics indicate a full and open process, but the awardee's role warrants scrutiny. 3. Risk indicators include potential for sole-source reliance in future phases. 4. Performance context is tied to the Low Rate Initial Production (LRIP) phase. 5. Sector positioning within optical instrument manufacturing is a key consideration.

Value Assessment

Rating: fair

The contract value of $29.8 million for LRIP optical instruments appears within a reasonable range for specialized defense equipment. However, without specific details on the exact components and quantities, a precise value-for-money assessment is challenging. Benchmarking against similar LRIP contracts for optical systems would provide better context. The firm-fixed-price structure offers cost certainty, but the ultimate value depends on the contractor's efficiency and the actual performance of the delivered instruments.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting multiple bidders were considered. However, the data does not specify the number of bids received or the nature of the competition. A full and open competition is generally favorable for price discovery, but the specific outcome for this delivery order needs further investigation to understand if the competition effectively drove down costs or if one offeror was significantly more competitive.

Taxpayer Impact: A full and open competition is positive for taxpayers as it theoretically allows for the best pricing through market forces. However, the actual savings realized depend on the number and quality of bids submitted and the evaluation process.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Army, receiving critical optical instruments for defense applications. The services delivered include the procurement of Low Rate Initial Production quantities of optical instruments. The geographic impact is centered in Florida, where the contractor is located. Workforce implications may include job creation or maintenance within the defense manufacturing sector, particularly in optical instrument production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics for LRIP phase.
Potential for follow-on contracts to become less competitive if this awardee is the sole viable option.
Uncertainty regarding the long-term sustainment costs of the optical instruments.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
Contract supports the Low Rate Initial Production phase, suggesting a path towards full-rate production.

Sector Analysis

The optical instrument and lens manufacturing sector is a critical component of the defense industrial base, providing essential technologies for surveillance, targeting, and navigation. This contract falls within the broader aerospace and defense manufacturing industry, which is characterized by high technological barriers to entry and significant government procurement. Comparable spending benchmarks would involve analyzing other LRIP contracts for similar electro-optical systems within the DoD.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. Given the specialized nature of optical instrument manufacturing, it is possible that larger prime contractors are involved, with potential for subcontracting opportunities for smaller, specialized firms. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Army. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement
Army Weapon Systems Procurement
Optical and Electro-Optical Systems
Low Rate Initial Production Contracts

Risk Flags

Potential for cost overruns if LRIP issues are not resolved.
Dependence on a single contractor for critical optical components.
Risk of obsolescence if technology evolves rapidly.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.8 million to DRS NETWORK & IMAGING SYSTEMS LLC. THIS DELIVERY ORDER PROCURES THE LOW RATE INITIAL PRODUCTION QUANTITY

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 $29.8 million.

What is the period of performance?

Start: 2021-04-30. End: 2024-07-01.

What is the specific type and intended use of the optical instruments being procured under this delivery order?

The data indicates this delivery order procures the Low Rate Initial Production (LRIP) quantity of optical instruments. While the specific type is not detailed, optical instruments in a defense context often include systems for surveillance, targeting, reconnaissance, and navigation. LRIP quantities are typically produced to validate the manufacturing process, establish initial production capabilities, and provide early operational capability before full-rate production begins. The exact application would influence performance requirements and the criticality of the procurement for the Department of the Army.

How does the awarded price of $29.8 million compare to similar LRIP contracts for optical instruments within the DoD?

Benchmarking this $29.8 million award requires access to data on comparable LRIP contracts for optical instruments. Factors such as complexity, technological sophistication, quantity, and specific performance characteristics significantly influence pricing. Without these comparative data points, it is difficult to definitively state whether this price represents excellent, good, or fair value. However, for specialized defense hardware, LRIP quantities can be more expensive per unit than full-rate production due to setup costs and lower volumes. A detailed analysis would involve identifying contracts with similar scope and scale.

What are the potential risks associated with awarding LRIP quantities under a full and open competition, and how might they manifest?

While full and open competition is generally beneficial, risks can still emerge. One risk is that the competition might not yield a sufficiently robust industrial base for future production, potentially leading to sole-source situations later. Another risk is that the lowest-priced, technically acceptable offer might not be the most innovative or possess the best long-term sustainment capabilities. Furthermore, if the LRIP phase reveals significant design or manufacturing challenges, the initial competitive pricing might become less relevant as costs escalate in subsequent phases. The government must carefully manage the transition from LRIP to full-rate production.

What is the track record of DRS Network & Imaging Systems LLC in delivering complex optical systems to the Department of Defense?

DRS Network & Imaging Systems LLC, a subsidiary of Leonardo DRS, has a significant history of providing advanced defense systems, including electro-optical and infrared (EO/IR) systems, targeting systems, and imaging solutions to the U.S. military. Their track record generally includes successful contract performance on various programs. However, a comprehensive assessment would require reviewing their specific performance history on similar optical instrument contracts, including on-time delivery, quality adherence, and any past performance issues or disputes. Their experience suggests they are a capable provider for this type of requirement.

What are the implications of this contract being a Delivery Order under a larger contract vehicle?

This contract is a Delivery Order (DO), which means it is a specific order placed against an existing basic ordering agreement (BOA) or indefinite-delivery indefinite-quantity (IDIQ) contract. The implications are that the foundational contract likely underwent a broader competition or established terms and conditions. This DO represents a specific procurement action within that framework. It suggests that the government has established a mechanism to procure these types of optical instruments over a period, and this DO is one instance of that procurement. The terms of the underlying contract vehicle would govern overall program scope and potential future orders.

How does the contract duration of 1158 days (approximately 3.17 years) align with typical LRIP phases for complex defense systems?

A duration of 1158 days for a Low Rate Initial Production (LRIP) delivery order is not uncommon for complex defense systems. LRIP phases are designed to bridge the gap between development and full-rate production, often involving significant testing, process refinement, and initial manufacturing ramp-up. This duration allows for the production of a limited quantity of systems while addressing any unforeseen manufacturing challenges, validating production processes, and gathering performance data. It provides sufficient time to ensure the system is ready for larger-scale production without committing to full production quantities prematurely.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91CRB15R0024

Pricing Type: FIRM FIXED PRICE (J)

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: $32,985,814

Exercised Options: $32,985,814

Current Obligation: $29,797,320

Subaward Activity

Number of Subawards: 38

Total Subaward Amount: $10,064,389

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB16D0031

IDV Type: IDC

Timeline