DoD awards $35.3M for observation devices, with limited competition raising price concerns

Contract Overview

Contract Amount: $35,285,515 ($35.3M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2023-04-21

End Date: 2027-04-21

Contract Duration: 1,461 days

Daily Burn Rate: $24.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS DELIVERY ORDER PROCURES IMPROVED NIGHT/DAY OBSERVATION DEVICE SYSTEMS.

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $35.3 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: THIS DELIVERY ORDER PROCURES IMPROVED NIGHT/DAY OBSERVATION DEVICE SYSTEMS. Key points: 1. Value for money is questionable due to limited competition and lack of detailed cost breakdowns. 2. Competition dynamics show a sole-source award, potentially limiting price discovery and innovation. 3. Risk indicators include the sole-source nature and the absence of a competitive benchmark. 4. Performance context is a delivery order for observation systems, with a 4-year duration. 5. Sector positioning is within defense manufacturing, specifically navigation and guidance systems.

Value Assessment

Rating: questionable

The contract value of $35.3 million for observation devices lacks sufficient detail for a robust value-for-money assessment. Without a competitive benchmark or detailed cost breakdown, it is difficult to ascertain if the pricing is fair and reasonable. Comparing this to similar contracts is challenging due to the sole-source nature of the award. The absence of competition suggests potential overpayment or a lack of incentive for cost efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This delivery order was not competed, indicating a sole-source award. The data provided does not specify the reason for this sole-source determination, such as a unique capability or urgent need. The lack of competition means there were no other bidders to provide alternative pricing or solutions, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, the government cannot be assured it received the best possible price for these observation systems.

Public Impact

The Department of the Army benefits from the procurement of improved night/day observation device systems. These systems are crucial for enhancing situational awareness and operational effectiveness for military personnel. The geographic impact is concentrated in Florida, where the contractor is located. The contract supports the defense industrial base and specialized manufacturing capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs.
Lack of detailed cost breakdown hinders thorough value assessment.
Absence of performance metrics or specific system capabilities makes outcome evaluation difficult.

Positive Signals

Procurement of critical observation systems for military use.
Long-term contract duration (4 years) suggests a sustained need.
Contract awarded to DRS Network & Imaging Systems LLC, a known entity in defense imaging.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry. This sector is characterized by high technological requirements and significant government investment. Comparable spending benchmarks are difficult to establish without more specific system details and competitive data, but the overall defense electronics market is substantial.

Small Business Impact

The contract data indicates that small business participation (ss and sb) is false. This suggests that the prime contractor is not a small business, and there is no explicit small business set-aside associated with this delivery order. Subcontracting opportunities for small businesses are not detailed in the provided information, but typically prime contractors are encouraged to utilize small businesses where feasible.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. Accountability measures are inherent in the contract terms, including delivery schedules and specifications. Transparency is limited by the sole-source nature and lack of public cost details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Night Vision Systems
Surveillance Equipment
Military Optics
Defense Electronics Manufacturing
Army Aviation Systems

Risk Flags

Sole-source award may indicate lack of competition.
Limited transparency on system capabilities and cost breakdown.
Potential for higher costs due to non-competitive award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.3 million to DRS NETWORK & IMAGING SYSTEMS LLC. THIS DELIVERY ORDER PROCURES IMPROVED NIGHT/DAY OBSERVATION DEVICE SYSTEMS.

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 $35.3 million.

What is the period of performance?

Start: 2023-04-21. End: 2027-04-21.

What specific capabilities do the 'improved night/day observation device systems' offer, and how do they compare to previous generations or commercial alternatives?

The provided data does not detail the specific capabilities of the 'improved night/day observation device systems.' It only states the general purpose is for observation. Without technical specifications, performance metrics, or a comparison to existing systems (e.g., previous models, commercial off-the-shelf alternatives), it is impossible to assess the degree of improvement or the technological advancement this contract represents. This lack of detail makes it difficult to justify the contract value and understand the true benefit derived by the Department of the Army.

What is the justification for awarding this contract on a sole-source basis, and were any market research efforts conducted to identify potential competitors?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a sole-source award. However, the specific justification for this determination (e.g., unique technical requirements, urgent need, lack of market availability) is not included. Standard government procurement practices require extensive market research to determine if a competitive environment exists before resorting to a sole-source award. Without this information, it's unclear if competition was genuinely impossible or if alternative solutions were overlooked, potentially impacting price and innovation.

How does the per-unit cost, if determinable, compare to industry benchmarks for similar observation systems?

Determining a precise per-unit cost is not feasible with the given data. The total award amount is $35,285,515.23, and the number of units is not specified. Even if the number of units were known, the lack of detailed cost breakdowns (e.g., labor, materials, overhead, profit) prevents a meaningful comparison to industry benchmarks. Furthermore, the sole-source nature of the award makes it difficult to establish a reliable market price. Without competitive bids, any calculated 'per-unit cost' would be based on a potentially inflated figure.

What is the track record of DRS Network & Imaging Systems LLC in delivering similar observation systems to the Department of Defense or other government agencies?

DRS Network & Imaging Systems LLC is a known entity within the defense sector, often involved in providing advanced imaging and optical systems. While the provided data confirms them as the contractor, it does not offer specific details on their past performance related to this particular type of observation device. A comprehensive assessment would require reviewing their contract history, past performance evaluations (e.g., CPARS reports), and any history of delivery issues or successes with similar systems for the DoD or other agencies. This information is crucial for evaluating the risk associated with this award.

What are the projected operational benefits and return on investment for the Department of the Army from acquiring these improved observation systems?

The primary projected benefit is the enhancement of situational awareness and operational effectiveness for military personnel through improved night and day observation capabilities. However, quantifying the return on investment (ROI) is challenging without specific performance metrics and cost-benefit analysis. The $35.3 million investment needs to be weighed against potential reductions in risk to personnel, improved mission success rates, and enhanced intelligence gathering. The lack of detailed system capabilities and the sole-source nature of the award complicate a precise ROI calculation.

How does this $35.3 million award compare to historical spending patterns for similar observation systems within the Department of the Army or DoD?

Without specific details on the type and capabilities of these 'improved night/day observation device systems,' direct historical spending comparisons are difficult. The total value of $35.3 million over four years is substantial. To provide context, one would need to analyze past contracts for similar equipment (e.g., night vision goggles, thermal imagers, surveillance optics) awarded by the Army or DoD. Factors like inflation, technological advancements, and quantity purchased would need to be considered. The sole-source nature of this award also makes direct comparison problematic, as competitive bids often drive prices down.

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

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: $35,285,515

Exercised Options: $35,285,515

Current Obligation: $35,285,515

Actual Outlays: $4,074,000

Subaward Activity

Number of Subawards: 56

Total Subaward Amount: $9,566,677

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB23D0007

IDV Type: IDC

Timeline