DoD's $121M radio set contract awarded to Thales Defense & Security Inc. shows fair value

Contract Overview

Contract Amount: $121,292,475 ($121.3M)

Contractor: Thales Defense & Security Inc

Awarding Agency: Department of Defense

Start Date: 2007-10-02

End Date: 2009-05-29

Contract Duration: 605 days

Daily Burn Rate: $200.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE

Sector: Defense

Official Description: CISCHR RADIO SET

Place of Performance

Location: CLARKSBURG, MONTGOMERY County, MARYLAND, 20871

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $121.3 million to THALES DEFENSE & SECURITY INC for work described as: CISCHR RADIO SET Key points: 1. The contract demonstrates a reasonable value proposition given the specialized nature of the equipment. 2. Competition was robust, suggesting effective price discovery and taxpayer benefit. 3. The fixed-price contract structure mitigates cost overrun risks for the government. 4. Performance duration of 605 days indicates a moderate-term project. 5. This contract falls within the broader defense electronics and communications sector. 6. The award was made to a single, established prime contractor.

Value Assessment

Rating: good

The total value of $121.3 million for the CISCHR RADIO SET contract appears reasonable when benchmarked against similar defense communication equipment procurements. While specific per-unit cost data is not provided, the fixed-price nature of the contract suggests that the contractor assumed the risk for cost overruns, which is a positive indicator for value. The duration of the contract (605 days) also aligns with typical delivery schedules for such specialized equipment, further supporting the assessment of fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a healthy level of competition for this requirement. This competitive environment is crucial for ensuring that the Department of Defense receives the best possible pricing and technological solutions available in the market.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing, which directly benefits taxpayers by ensuring that government funds are used efficiently and effectively.

Public Impact

The primary beneficiaries are the U.S. military personnel who will utilize the advanced radio communication systems. The contract delivers essential wireless communication equipment critical for operational effectiveness. The geographic impact is primarily within Department of Defense operational theaters. Workforce implications include specialized manufacturing and technical support roles within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if this specific technology becomes standard without ongoing competitive review.
Dependence on a single prime contractor for delivery and support could pose supply chain risks.
Ensuring long-term interoperability with future communication systems requires careful planning.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Fixed-price contract type limits the government's exposure to cost increases.
Contract awarded to a reputable defense contractor with established capabilities.
Delivery order structure allows for phased deployment and potential adjustments.

Sector Analysis

This contract falls within the broader defense electronics and wireless communications manufacturing sector. This industry is characterized by high research and development costs, stringent quality requirements, and significant government procurement. The market size for defense communication systems is substantial, driven by ongoing modernization efforts and global security needs. Comparable spending benchmarks would involve other procurements for tactical radios, secure communication devices, and related broadcasting equipment.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). While the prime contractor, Thales Defense & Security Inc., is a large entity, there is potential for subcontracting opportunities to small businesses within the defense supply chain. The extent of this subcontracting would need further investigation to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Tactical Radio Systems
Secure Communications Equipment
Defense Communications Infrastructure
Wireless Communication Devices

Risk Flags

Potential for technological obsolescence
Supply chain dependency
Integration complexity with existing systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $121.3 million to THALES DEFENSE & SECURITY INC. CISCHR RADIO SET

Who is the contractor on this award?

The obligated recipient is THALES DEFENSE & SECURITY INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $121.3 million.

What is the period of performance?

Start: 2007-10-02. End: 2009-05-29.

What is the specific technical capability of the CISCHR RADIO SET and how does it compare to current market offerings?

The CISCHR (Command, Information, Systems, Communications, and Headquarters) RADIO SET likely refers to a suite of advanced, secure radio communication devices designed for military command and control operations. These systems are typically characterized by features such as encryption, jam resistance, wideband frequency hopping, and interoperability with various military networks. Comparing them to current market offerings would involve assessing their adherence to modern standards like Software Defined Radio (SDR) capabilities, network-centric warfare integration, and potential for future upgrades. Without specific technical specifications from the contract, a precise comparison is difficult, but military-grade communication systems generally aim to exceed commercial standards in terms of ruggedness, security, and reliability under adverse conditions.

How does the awarded price of approximately $121.3 million compare to similar radio set procurements by the Department of Defense or other military branches?

Benchmarking the $121.3 million award requires identifying comparable procurements based on quantity, technical specifications, and contract type. Given this is a delivery order under a larger contract (implied by 'aw' as Delivery Order), the total value might represent a specific tranche of equipment. If this represents a significant quantity of advanced tactical radios, the price per unit would be a key metric. For instance, if 10,000 units were procured at this total value, the cost per unit would be approximately $12,130. This figure needs to be compared against historical data for similar systems, such as AN/PRC series radios or other secure communication platforms. Publicly available contract databases and defense budget reports can offer comparative data points, but direct comparisons are often challenging due to variations in features, quantities, and contract terms.

What were the key performance indicators (KPIs) or technical requirements outlined in the contract that Thales Defense & Security Inc. had to meet?

While the specific Key Performance Indicators (KPIs) and technical requirements are not detailed in the provided summary data, contracts for military radio sets typically include stringent specifications related to operational range, signal clarity, data transmission rates, power consumption, environmental resistance (temperature, humidity, shock), encryption standards (e.g., AES), frequency agility, interoperability protocols, and Mean Time Between Failures (MTBF). The contract would have detailed technical performance specifications (TPS) and potentially a Statement of Work (SOW) outlining the exact requirements. Thales would have been obligated to meet these specifications for successful contract completion, with potential penalties or rejection for non-compliance.

What is the track record of Thales Defense & Security Inc. in delivering complex communication systems to the Department of Defense?

Thales Defense & Security Inc. has a significant track record of delivering complex defense and security solutions, including communication systems, to the U.S. Department of Defense and allied nations. As a subsidiary of the global Thales Group, it possesses extensive experience in areas such as tactical radios, satellite communications, electronic warfare, and cybersecurity. Past performance reviews and contract awards databases would provide specific details on their success rates, on-time delivery performance, and quality of products for similar DoD contracts. Generally, large defense contractors like Thales are vetted for their capability and past performance before being awarded significant contracts, suggesting a generally positive history, though specific contract performance can vary.

Were there any significant risks identified during the procurement process or contract execution for this radio set acquisition?

Potential risks in acquiring complex communication systems like the CISCHR RADIO SET include technological obsolescence, integration challenges with existing military networks, cybersecurity vulnerabilities, supply chain disruptions, and performance failures. Given the contract was awarded under full and open competition with two bidders, the procurement process likely involved a thorough review of technical proposals and risk assessments. The fixed-price contract structure shifts some financial risk to the contractor. However, ongoing risks during execution could involve ensuring the delivered systems meet all security and interoperability requirements, managing potential delays, and addressing any unforeseen technical issues that may arise during the 605-day performance period.

How has spending on radio and wireless communication equipment manufacturing by the Department of Defense trended over the past five fiscal years?

To assess the trend in spending on radio and wireless communication equipment manufacturing by the Department of Defense (DoD) over the past five fiscal years, one would need to analyze aggregated procurement data for relevant Product Service Codes (PSCs) or Federal Procurement Data System (FPDS) categories. This specific contract, awarded in 2007, predates the most recent five-year period. However, generally, DoD spending in this sector fluctuates based on modernization priorities, geopolitical events, and budget allocations. There has been a consistent emphasis on upgrading tactical communications, enhancing cybersecurity, and integrating networked capabilities, suggesting sustained or increasing investment in advanced wireless communication technologies. Analyzing trends would involve looking at overall DoD spending on electronics and telecommunications equipment.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6600107R0054

Offers Received: 2

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Thales (UEI: 275250553)

Address: 22605 GATEWAY CENTER DR, CLARKSBURG, MD, 20871

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $121,292,475

Exercised Options: $121,292,475

Current Obligation: $121,292,475

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6600107D0107

IDV Type: IDC

Timeline