DoD's $40M contract for Ophthalmic Goods Manufacturing saw 2 bidders, with Harris Corporation as the awardee

Contract Overview

Contract Amount: $40,035,188 ($40.0M)

Contractor: Harris Corporation

Awarding Agency: Department of Defense

Start Date: 2005-05-27

End Date: 2012-09-30

Contract Duration: 2,683 days

Daily Burn Rate: $14.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200510!500833!2100!W91CRB!USA MATERIEL COMMAND ACQUISITION!W91CRB05D0012 !A!N! !Y!0002 ! !20050527!20060531!003123072!003123072!001216845!N!ITT INDUSTRIES, INC !7635 PLANTATION RD !ROANOKE !VA!24019!68000!770!51!ROANOKE !ROANOKE (CITY) !VIRGINIA !+000039998452!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !339115!E! !5!B!S! ! ! !20200930!B! ! !A! !A!N!J!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ROANOKE, ROANOKE County, VIRGINIA, 24019

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to HARRIS CORPORATION for work described as: 200510!500833!2100!W91CRB!USA MATERIEL COMMAND ACQUISITION!W91CRB05D0012 !A!N! !Y!0002 ! !20050527!20060531!003123072!003123072!001216845!N!ITT INDUSTRIES, INC !7635 PLANTATION RD !ROANOKE !VA!24019!68000!770!51!ROANOKE !ROAN… Key points: 1. The contract value of $40M over its lifetime suggests a significant investment in specialized manufacturing capabilities. 2. With only two bidders, the competition level was limited, potentially impacting price negotiation and value for money. 3. The contract's duration of over 11 years indicates a long-term need for these specific ophthalmic goods. 4. The 'Delivery Order' contract type implies flexibility in ordering, which could lead to cost efficiencies or potential overspending if not managed carefully. 5. The 'Firm Fixed Price' contract type offers cost certainty for the government, shifting risk to the contractor. 6. The 'Ophthalmic Goods Manufacturing' Nationalالدليل (NAICS) code points to a niche but critical area within defense procurement.

Value Assessment

Rating: fair

The total award amount of $40,035,187.55 for ophthalmic goods manufacturing over an extended period requires careful benchmarking. Without specific details on the goods produced or their intended use, a direct comparison to similar contracts is challenging. However, the presence of only two bidders suggests that the market for this specific type of manufacturing may be limited, potentially influencing pricing. The firm fixed price structure provides cost certainty, but the overall value for money depends on the necessity and criticality of the goods procured.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition' but resulted in only two bidders. This limited competition could indicate a specialized market or high barriers to entry for potential contractors. While competition existed, the low number of bidders may have reduced the government's leverage in price negotiations and potentially led to a higher-than-optimal price. Further analysis would be needed to understand why more firms did not participate.

Taxpayer Impact: With only two bidders, taxpayers may have paid a premium compared to a more robustly competed contract. The limited competition reduces the likelihood of aggressive pricing strategies from multiple vendors.

Public Impact

The primary beneficiaries are likely military personnel and potentially other government agencies requiring specialized ophthalmic equipment or components. The contract supports the manufacturing and delivery of ophthalmic goods, crucial for vision health and operational readiness. The geographic impact is centered in Virginia, where the contractor ITT Industries, Inc. is located, potentially supporting local employment and the regional economy. The contract implies a need for skilled labor in manufacturing, potentially impacting the workforce in specialized electronics and optics fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have resulted in less favorable pricing for the government.
The long contract duration (over 11 years) increases the risk of technological obsolescence or changing requirements.
Lack of specific details on the ophthalmic goods makes it difficult to assess true value for money.
The 'Delivery Order' type, while flexible, could lead to scope creep or unmanaged costs if not closely monitored.

Positive Signals

The 'Firm Fixed Price' contract type provides cost certainty and shifts risk to the contractor.
The contract was awarded under 'Full and Open Competition', indicating an attempt to solicit a broad range of potential offerors.
The long duration suggests a stable, long-term requirement, providing predictability for the contractor and ensuring supply continuity.

Sector Analysis

The defense sector's procurement of specialized equipment like ophthalmic goods falls under a broad category of electronics and communication equipment manufacturing. The market for such niche products can be limited, with a few key players dominating. The total spending in this sub-sector can vary significantly based on technological advancements and specific military needs. Benchmarking this $40M contract would require comparing it to other defense contracts for similar specialized manufacturing, considering factors like complexity, volume, and technological sophistication.

Small Business Impact

There is no indication from the provided data that this contract involved small business set-asides or significant subcontracting opportunities for small businesses. The primary contractor, ITT Industries, Inc., is a large corporation. Further investigation would be needed to determine if any small business participation was mandated or occurred voluntarily.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), which provides contract administration services to the Department of Defense. Oversight would typically involve monitoring contractor performance, ensuring compliance with contract terms, and verifying delivery and payment. Transparency is generally maintained through contract databases, but specific oversight reports or Inspector General involvement would depend on identified issues or performance concerns.

Related Government Programs

Defense Contract Audit Agency (DCAA) Audits
Department of Defense Research, Development, Test, and Evaluation (RDTE)
Procurement of Electronics and Communication Equipment
Medical Equipment Manufacturing Contracts

Risk Flags

Limited Competition
Long Contract Duration
Potential for Price Inflation due to Few Bidders

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to HARRIS CORPORATION. 200510!500833!2100!W91CRB!USA MATERIEL COMMAND ACQUISITION!W91CRB05D0012 !A!N! !Y!0002 ! !20050527!20060531!003123072!003123072!001216845!N!ITT INDUSTRIES, INC !7635 PLANTATION RD !ROANOKE !VA!24019!68000!770!51!ROANOKE !ROANOKE (CITY) !VIRGINIA !+000039998452!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !339115!E! !5!B!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is HARRIS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $40.0 million.

What is the period of performance?

Start: 2005-05-27. End: 2012-09-30.

What specific types of ophthalmic goods were manufactured under this contract, and what was their intended use within the Department of Defense?

The provided data indicates the Nationalالدليل (NAICS) code is 339115 for 'Ophthalmic Goods Manufacturing'. However, it does not specify the exact types of ophthalmic goods produced under this particular contract (W91CRB05D0012). These could range from specialized eyewear for soldiers in various environments (e.g., ballistic protection, night vision compatibility) to components for medical diagnostic equipment used in military healthcare facilities, or even optical systems for targeting or surveillance. The intended use is critical for understanding the contract's strategic importance and for accurately benchmarking its value and performance against similar procurements.

How does the per-unit cost of the ophthalmic goods compare to commercial market rates or similar government contracts?

The provided data does not include per-unit cost information, making a direct comparison to commercial market rates or similar government contracts impossible. The total award amount of $40,035,187.55 is spread over a contract duration of approximately 11 years (from May 27, 2005, to September 30, 2012), with delivery orders issued against it. To assess per-unit cost, one would need the quantity of units delivered under each order and their respective prices. Without this granular data, any assessment of value for money based on unit pricing remains speculative. Benchmarking would require access to detailed delivery order histories and pricing.

What was the track record of ITT Industries, Inc. with similar defense contracts prior to and during the period of this award?

ITT Industries, Inc. (now part of L3Harris Technologies) has a long history of supplying defense and aerospace products. Prior to and during the period of this contract (2005-2012), ITT was a significant defense contractor involved in various areas, including electronics, communications, and aerospace systems. Assessing their specific track record for ophthalmic goods manufacturing would require reviewing their past performance on similar contracts, including any quality issues, delivery performance, or cost overruns. Generally, large defense contractors like ITT are expected to have established quality control and production processes, but individual contract performance can vary.

Given the limited competition (2 bidders), what steps were taken to ensure fair pricing and prevent contractor collusion?

When a contract receives limited competition, especially under 'Full and Open Competition', agencies typically employ several measures to ensure fair pricing. This can include conducting thorough market research to understand price reasonableness, obtaining independent cost estimates, and negotiating aggressively with the bidders. The 'Firm Fixed Price' nature of the contract itself helps by setting a ceiling on costs. However, the effectiveness of these measures depends on the skill of the contracting officers and the availability of reliable cost data. The Defense Contract Audit Agency (DCAA) may also be involved in reviewing cost proposals, particularly for larger contracts, to provide an independent assessment.

What was the historical spending trend for ophthalmic goods manufacturing within the Department of Defense leading up to this contract?

The provided data does not include historical spending trends for ophthalmic goods manufacturing within the Department of Defense. To analyze this, one would need to query historical contract databases using relevant NAICS codes (like 339115) and Product Service Codes (PSCs) across multiple fiscal years. Understanding past spending patterns would help determine if this $40 million contract represented a significant increase, decrease, or continuation of previous investment levels in this specific area. It would also help contextualize the contract's duration and value within the broader budgetary landscape for defense-related optical and medical equipment.

Were there any performance issues, contract modifications, or disputes associated with this contract during its extended period?

The provided data summary does not detail specific performance issues, contract modifications, or disputes related to contract W91CRB05D0012. The contract's duration was extended from an initial end date of May 31, 2006, to September 30, 2012, suggesting that modifications or extensions were likely necessary to fulfill the government's requirements over the longer term. Such extensions could be due to various factors, including changes in requirements, contractor performance, or budget allocations. A comprehensive review of the contract's official file, including modification history and any associated documentation, would be required to identify specific issues or disputes.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Ophthalmic Goods Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 7635 PLANTATION RD, ROANOKE, VA, 24019

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: W91CRB05D0012

IDV Type: IDC

Timeline