DHS awards $67.2M contract for computer systems design to Anduril Industries, Inc

Contract Overview

Contract Amount: $67,211,616 ($67.2M)

Contractor: Anduril Industries, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2022-06-22

End Date: 2023-11-30

Contract Duration: 526 days

Daily Burn Rate: $127.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AST DO#8

Place of Performance

Location: IRVINE, ORANGE County, CALIFORNIA, 92612

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $67.2 million to ANDURIL INDUSTRIES, INC. for work described as: AST DO#8 Key points: 1. Contract value represents a significant investment in advanced technology solutions. 2. Competition was open, suggesting a potentially competitive pricing environment. 3. The fixed-price contract type shifts performance risk to the contractor. 4. This award falls within the broader IT services sector, a key area for government modernization. 5. The duration of the contract indicates a medium-term project requirement. 6. The contract was awarded under a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract value of $67.2 million for computer systems design services appears reasonable given the scope and duration. Benchmarking against similar large-scale IT system design contracts would provide further context. The firm fixed-price structure suggests that the contractor has committed to a specific price, which can be advantageous for the government if costs are managed effectively by the contractor. However, without detailed task breakdowns and market comparisons for specific services, a definitive value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be broad, certain sources were excluded, leading to a limited competition scenario. The number of bidders is not specified, but the 'limited' nature suggests fewer than a fully open competition. This could potentially impact price discovery, as a smaller pool of bidders might lead to less aggressive pricing compared to a truly open bid.

Taxpayer Impact: A limited competition may result in higher costs for taxpayers compared to a fully open competition, as the government may not receive the most competitive pricing available in the market.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection (CBP) and the Department of Homeland Security (DHS), receiving enhanced computer systems. The services delivered are critical for modernizing and improving the operational capabilities of border security. The geographic impact is likely focused on areas relevant to CBP operations, potentially nationwide. Workforce implications may include the need for specialized IT personnel within DHS and potential indirect impacts on the technology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to less favorable pricing for the government.
The specific nature of 'computer systems design services' can be broad, requiring careful oversight to ensure scope creep is managed.
Reliance on a single contractor for critical system design may pose long-term dependency risks.

Positive Signals

The firm fixed-price contract type incentivizes contractor efficiency and cost control.
The award to Anduril Industries, Inc. suggests leveraging a company with potentially innovative technological capabilities.
The contract's duration allows for sustained development and implementation of complex systems.

Sector Analysis

The IT services sector is a vast and critical component of government operations, encompassing everything from software development to network infrastructure. This contract for computer systems design services fits within the 'Computer Systems Design Services' NAICS code (541512). Spending in this area is consistently high across federal agencies as they strive to modernize legacy systems and adopt new technologies. Comparable spending benchmarks would involve looking at other large-scale IT modernization projects within DHS or similar agencies.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary focus or requirement for this specific contract award. There is no indication of small business set-aside provisions being utilized. Consequently, the direct impact on the small business ecosystem for this particular award is likely minimal. Subcontracting opportunities for small businesses would depend on Anduril Industries, Inc.'s internal policies and the specific needs of the project, which are not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon budget. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Homeland Security Information Network (HSIN)
Biometric Entry/Exit Program
Customs and Border Protection Technology Modernization Initiatives

Risk Flags

Limited Competition
Potential for Scope Creep
Technological Obsolescence Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $67.2 million to ANDURIL INDUSTRIES, INC.. AST DO#8

Who is the contractor on this award?

The obligated recipient is ANDURIL INDUSTRIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $67.2 million.

What is the period of performance?

Start: 2022-06-22. End: 2023-11-30.

What is the track record of Anduril Industries, Inc. in delivering large-scale government IT system design contracts?

Anduril Industries, Inc. is known for its work in defense technology, particularly in areas like autonomous systems, AI, and sensor technology. While they have secured significant contracts, especially with DHS and other defense agencies, their primary focus has often been on hardware and integrated systems rather than purely 'computer systems design services' as typically defined by IT consulting firms. This contract may represent an expansion or a specific application of their broader technological capabilities. A detailed review of their past performance on similar IT-focused projects, including client satisfaction, adherence to schedule, and budget performance, would be necessary for a comprehensive assessment. Information on their specific experience with large-scale, complex system design projects within the federal government, beyond their well-publicized defense work, is crucial.

How does the awarded price compare to market rates for similar computer systems design services?

Benchmarking the awarded price of $67.2 million against market rates for similar computer systems design services is challenging without specific details on the tasks, technologies, and labor categories involved. The NAICS code 541512 covers a broad range of services. To perform a robust comparison, one would need to identify comparable government or commercial contracts for system design projects of similar complexity and duration. Factors such as the level of innovation required, the security clearances needed, and the specific technical expertise demanded would influence market rates. Given the limited competition noted, it's possible the price is not as competitive as it might be in a fully open market. A detailed cost analysis or comparison with industry pricing models for specialized IT design services would be required.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential scope creep, given the broad nature of 'computer systems design services,' which could lead to cost overruns despite the firm fixed-price structure. Another risk is the potential for technological obsolescence if the designed systems are not future-proof. Performance risk is also present, as the contractor must deliver functional and effective systems. Mitigation strategies likely involve rigorous project management, clear definition of deliverables and milestones, regular performance reviews, and potentially phased delivery schedules. The government's contracting officers and technical representatives play a crucial role in monitoring progress and ensuring adherence to the contract's terms. The limited competition aspect also introduces a risk of suboptimal pricing.

What is the expected effectiveness of the designed computer systems in enhancing U.S. Customs and Border Protection's mission?

The effectiveness hinges on the specific design requirements and how well Anduril Industries, Inc. translates those into functional systems. As the contract is for 'computer systems design services,' the immediate output is the design itself, not necessarily the fully implemented and operational system. The ultimate effectiveness will be realized during the implementation and operational phases, which may occur under separate contracts or task orders. Assuming the design is well-executed and aligned with CBP's strategic goals for border security, modernization, and data integration, the systems could significantly improve situational awareness, data analysis capabilities, and operational efficiency. However, the 'effectiveness' is a forward-looking metric dependent on successful implementation and adoption.

How does this contract's spending compare to historical federal spending on computer systems design services?

Federal spending on computer systems design services (NAICS 541512) is substantial and has been a consistent area of investment for agencies like DHS. This $67.2 million award is a significant sum for a single contract but falls within the typical range for major IT modernization projects. Historical data from FPDS shows billions spent annually across the government in this category. For context, DHS alone awards numerous contracts in the tens to hundreds of millions for IT services. Comparing this specific award requires looking at the trend of IT spending within CBP and DHS over the past 5-10 years, considering factors like agency priorities, technological advancements, and budget allocations. This contract likely represents a component of a larger, ongoing effort to upgrade critical infrastructure.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2722 MICHELSON DR, IRVINE, CA, 92612

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $67,211,616

Exercised Options: $67,211,616

Current Obligation: $67,211,616

Actual Outlays: $23,230,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B02C20D00000019

IDV Type: IDC

Timeline