DoD awards $67.4M for AN/AAQ-22E systems to Teledyne FLIR, LLC, with no competition

Contract Overview

Contract Amount: $67,380,930 ($67.4M)

Contractor: Teledyne Flir, LLC

Awarding Agency: Department of Defense

Start Date: 2008-09-29

End Date: 2010-10-29

Contract Duration: 760 days

Daily Burn Rate: $88.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/AAQ-22E

Place of Performance

Location: WILSONVILLE, CLACKAMAS County, OREGON, 97070

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $67.4 million to TELEDYNE FLIR, LLC for work described as: AN/AAQ-22E Key points: 1. The contract value represents a significant investment in advanced sensor technology for naval aviation. 2. Sole-source procurement raises questions about potential price inflation and limited market engagement. 3. The duration of the contract suggests a long-term need for these critical systems. 4. Performance context is limited due to the lack of competitive bidding. 5. The award falls within the broader Defense sector, specifically focusing on advanced sensor manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the $67.4 million represents a fair market price. The contract's fixed-price structure offers some cost certainty, but the absence of competition prevents a direct comparison to similar systems procured through open bidding. Further analysis would require access to internal cost data or comparable sole-source awards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Teledyne FLIR, LLC, was considered. The justification for this approach is not detailed in the provided data. Sole-source procurements can limit opportunities for other capable companies to bid and may result in higher prices compared to competitively awarded contracts. The lack of competition means price discovery was not driven by market forces.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive pressure. This could lead to overpayment for the required systems.

Public Impact

The primary beneficiaries are the Department of the Navy and its aviation units, which will receive advanced sensor systems. The contract delivers critical components for search, detection, navigation, and guidance systems, enhancing operational capabilities. The geographic impact is likely concentrated within naval aviation bases and operational theaters where these aircraft are deployed. Workforce implications may include specialized manufacturing and technical support roles at Teledyne FLIR and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the sole-source justification hinders full assessment of necessity.
Contract duration could lock the government into a specific technology without exploring alternatives.
Limited public data on performance metrics makes it difficult to assess value for money.
No indication of small business subcontracting goals or achievements.

Positive Signals

Award to a known entity (Teledyne FLIR) suggests a potentially established relationship and understanding of requirements.
Firm Fixed Price contract provides cost certainty for the government.
The system (AN/AAQ-22E) likely addresses a specific, validated operational need within the Navy.
Contract award signifies continued investment in advanced defense technology.

Sector Analysis

The contract falls within the broader Defense Industrial Base, specifically the segment focused on manufacturing instruments for search, detection, navigation, guidance, aeronautical, and nautical systems. This sector is characterized by high technological barriers to entry and significant government investment. Comparable spending benchmarks would typically involve other advanced sensor or avionics procurements within the Department of Defense, often awarded through competitive processes.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information regarding subcontracting plans or performance. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Teledyne FLIR actively engages small businesses for subcontracting opportunities, which is not specified here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which caps the government's liability. Transparency is limited due to the sole-source nature and lack of detailed public justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Sensor Procurement
Naval Aviation Systems Contracts
Search and Detection Systems
Aeronautical and Nautical Instrument Manufacturing

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for price inflation
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.4 million to TELEDYNE FLIR, LLC. AN/AAQ-22E

Who is the contractor on this award?

The obligated recipient is TELEDYNE FLIR, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $67.4 million.

What is the period of performance?

Start: 2008-09-29. End: 2010-10-29.

What is the specific operational capability provided by the AN/AAQ-22E system, and why was it deemed essential for the Department of the Navy?

The AN/AAQ-22E is an advanced electro-optical sensor system designed for intelligence, surveillance, and reconnaissance (ISR) missions. It typically integrates infrared and daylight imaging capabilities, providing high-resolution imagery for target detection, identification, and tracking. For the Department of the Navy, such systems are crucial for enhancing situational awareness, enabling precision targeting, and supporting a wide range of naval operations, from anti-submarine warfare to maritime interdiction. The specific need for this system likely stems from evolving threats and the requirement for superior sensor performance in diverse operational environments, justifying its procurement even on a sole-source basis.

What is the historical spending pattern for the AN/AAQ-22E system or similar systems procured by the Department of Defense?

Historical spending data for the AN/AAQ-22E system specifically is not detailed in the provided information. However, advanced electro-optical and infrared (EO/IR) sensor systems for military applications represent a significant and consistent area of defense spending. Contracts for similar ISR payloads, targeting pods, and reconnaissance systems often range from tens to hundreds of millions of dollars, depending on the system's complexity, quantity, and the specific platform it's intended for. The Department of Defense frequently procures such systems through both competitive and sole-source awards, with sole-source often justified for upgrades to existing platforms or when a specific technology is deemed critical and only available from a single source. The $67.4 million awarded here is within the typical range for such advanced systems.

What are the potential risks associated with a sole-source contract of this magnitude for advanced sensor technology?

Sole-source contracts, especially for high-value technology like the AN/AAQ-22E, carry several risks. Primarily, the lack of competition can lead to inflated pricing, as the contractor faces no pressure to offer the most competitive bid. This can result in taxpayers paying more than necessary. Secondly, it limits the government's ability to explore alternative technologies or innovations from other potential suppliers, potentially locking it into a specific vendor's roadmap. There's also a risk of complacency from the sole-source provider, potentially impacting responsiveness or future innovation if they feel secure in their market position. Finally, without competitive benchmarking, assessing the true value for money becomes more difficult.

How does the firm-fixed-price (FFP) contract type mitigate risks for the government in this sole-source award?

The Firm Fixed Price (FFP) contract type is generally favorable to the government, especially in sole-source situations. It establishes a ceiling price that the contractor must adhere to, regardless of their actual costs. This means that if Teledyne FLIR incurs higher-than-expected costs in developing or producing the AN/AAQ-22E systems, the government is not obligated to pay more than the agreed-upon price. This structure provides significant cost certainty for the buyer and shifts the risk of cost overruns to the contractor. While it doesn't address the risk of overpayment due to lack of competition, it effectively manages the financial exposure related to the contractor's performance and cost management.

What is Teledyne FLIR's track record with similar defense contracts, particularly sole-source awards?

Teledyne FLIR, LLC, is a well-established defense contractor with a significant history of supplying advanced sensor and imaging systems to various government agencies, including the Department of Defense. They have a proven track record in developing and delivering electro-optical, infrared, and other sensor technologies for a wide array of military platforms. While specific details on their sole-source award history are not provided here, it is common for established prime contractors in specialized defense sectors to receive sole-source awards, particularly for upgrades, sustainment, or when their proprietary technology is required. Their extensive experience suggests a capacity to meet the technical requirements of the AN/AAQ-22E system.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0016406R8548

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 27700A SW PARKWAY AVENUE, WILSONVILLE, OR, 05

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $67,380,930

Exercised Options: $67,380,930

Current Obligation: $67,380,930

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0016408DJQ40

IDV Type: IDC

Timeline