DHS awards $33M ATS sustainment contract to Anduril Industries, Inc. for computer systems design

Contract Overview

Contract Amount: $33,013,825 ($33.0M)

Contractor: Anduril Industries, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2023-06-20

End Date: 2024-06-19

Contract Duration: 365 days

Daily Burn Rate: $90.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DO 12 AWARD, ATS SUSTAINMENT

Place of Performance

Location: COSTA MESA, ORANGE County, CALIFORNIA, 92626

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $33.0 million to ANDURIL INDUSTRIES, INC. for work described as: DO 12 AWARD, ATS SUSTAINMENT Key points: 1. Contract focuses on sustainment of Air and Terrestrial Systems (ATS), indicating a need for ongoing support and maintenance of critical infrastructure. 2. The award to Anduril Industries, Inc. suggests a strategic choice for a specific technological capability or existing relationship. 3. The contract duration of 365 days points to a short-term or initial phase of sustainment, potentially leading to follow-on work. 4. The fixed-price contract type aims to provide cost certainty for the government, shifting performance risk to the contractor. 5. The procurement method, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' warrants further investigation into the rationale for excluding other potential bidders. 6. The contract value of approximately $33 million positions it as a significant investment in border security technology. 7. The geographic location of the contractor in California may have implications for deployment and support logistics.

Value Assessment

Rating: fair

Benchmarking the value of this $33 million contract is challenging without detailed cost breakdowns or comparisons to similar ATS sustainment efforts. The fixed-price nature suggests an expectation of defined costs, but the specific services rendered for sustainment will determine the true value. Without more information on the scope of work and the specific systems being sustained, it's difficult to definitively assess if this represents excellent value for money compared to alternative solutions or previous contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This procurement method implies that while the competition was intended to be open, specific sources were excluded, suggesting a potential limitation on the number of bidders. The rationale for excluding other sources needs to be understood to determine if it was justified by technical requirements or other factors. A limited competition may result in less aggressive pricing compared to a truly full and open process.

Taxpayer Impact: The exclusion of certain sources, even within an otherwise open competition, could potentially limit price discovery and may not yield the most cost-effective outcome for taxpayers.

Public Impact

This contract directly benefits U.S. Customs and Border Protection (CBP) by ensuring the continued operational readiness of Air and Terrestrial Systems. The services delivered will focus on the sustainment and maintenance of existing technology, crucial for border security operations. The geographic impact is primarily focused on areas where CBP operates its Air and Terrestrial Systems, likely along U.S. borders. Workforce implications may include the need for specialized technical personnel for system maintenance and support, potentially within Anduril Industries or through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method raises questions about the breadth of competition and potential missed opportunities for cost savings.
Lack of detailed performance metrics or service level agreements in the provided data makes it difficult to assess the quality and effectiveness of the sustainment services.
The short, one-year duration of the contract could indicate a stop-gap measure or an initial phase, potentially leading to future contract uncertainty or re-competition challenges.

Positive Signals

The award to Anduril Industries, a known entity in defense technology, suggests a potentially strong technical capability for sustaining complex systems.
The firm-fixed-price contract type provides cost predictability for the government, mitigating budget overruns if the scope is well-defined.
Sustaining existing systems rather than procuring new ones can be a more cost-effective approach, leveraging prior investments.

Sector Analysis

The contract falls within the Computer Systems Design Services sector, specifically supporting defense and security technology. This sector is characterized by rapid innovation and specialized technical expertise. The market for defense-related IT and systems integration is substantial, with significant government spending allocated to maintaining and upgrading critical operational systems. Anduril Industries operates in a competitive landscape focused on providing advanced technological solutions to government agencies, particularly in areas like border security and defense.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific award, as the 'small business set-aside' flag is false. There is no explicit information on subcontracting plans for small businesses. This suggests that the primary contractor, Anduril Industries, is expected to perform the majority of the work, and the impact on the small business ecosystem may be limited unless specific subcontracting opportunities arise that are not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Customs and Border Protection contracting officer and program managers. Accountability measures are inherent in the firm-fixed-price contract, requiring delivery of specified sustainment services. Transparency is generally facilitated through contract award databases like FPDS, though detailed performance reports and internal oversight processes are not publicly disclosed. The Department of Homeland Security's Office of Inspector General may conduct audits or investigations if performance issues or concerns arise.

Related Government Programs

Homeland Security Information Technology Services
Border Security Technology Modernization
CBP Command and Control Systems
Defense Information Technology Contracting

Risk Flags

Limited Competition Justification
Lack of Publicly Available Performance Metrics
Potential for Sole-Source Follow-on Work

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $33.0 million to ANDURIL INDUSTRIES, INC.. DO 12 AWARD, ATS SUSTAINMENT

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 $33.0 million.

What is the period of performance?

Start: 2023-06-20. End: 2024-06-19.

What specific Air and Terrestrial Systems are being sustained under this contract, and what is the criticality of these systems to CBP operations?

The provided data does not specify the exact Air and Terrestrial Systems (ATS) covered by this contract. However, within U.S. Customs and Border Protection (CBP), ATS typically encompasses a range of assets including manned aircraft (helicopters, planes), unmanned aerial vehicles (UAVs), ground sensors, surveillance towers, and communication systems used for border surveillance, interdiction, and response. The criticality of these systems is extremely high, as they form a core component of CBP's ability to detect, monitor, and respond to illicit activities along U.S. borders. Their operational readiness directly impacts national security and border integrity.

What was the specific justification for excluding other sources in this 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement?

The justification for excluding other sources under this procurement method is not detailed in the provided data. Typically, such exclusions are based on specific technical requirements, unique capabilities possessed by the awarded contractor, or the need to leverage existing infrastructure or knowledge that only certain vendors possess. For instance, if Anduril Industries developed or holds proprietary technology integral to the ATS that requires specialized sustainment, excluding other vendors might be deemed necessary to ensure effective support. A thorough review of the contract's Justification for Other than Full and Open Competition (JOFOC) documentation would be required to ascertain the precise reasons.

How does the $33 million award compare to historical spending on ATS sustainment by CBP or similar agencies?

Without historical spending data specifically for ATS sustainment by CBP or comparable agencies, a direct comparison is not feasible. However, the $33 million figure for a one-year sustainment contract suggests a significant investment. The cost of sustaining complex technological systems can be substantial, often ranging from 10-20% of the initial acquisition cost annually, depending on the technology's age, complexity, and operational tempo. To provide a more accurate benchmark, one would need to analyze prior contracts for similar systems, consider inflation, and factor in the specific scope of services included in this award.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this sustainment contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. In a typical sustainment contract, KPIs and SLAs would define the expected performance standards, such as system uptime, response times for maintenance requests, defect resolution rates, and availability of spare parts. These metrics are crucial for measuring the contractor's performance and ensuring the operational readiness of the Air and Terrestrial Systems. The absence of this information in the summary data limits the ability to quantitatively assess the expected value and effectiveness of the sustainment services.

What is Anduril Industries' track record with the Department of Homeland Security and specifically with U.S. Customs and Border Protection?

Anduril Industries has a growing track record with the Department of Homeland Security (DHS) and its components, including U.S. Customs and Border Protection (CBP). The company is known for providing advanced technology solutions, often leveraging artificial intelligence and autonomous systems for border security and defense applications. This $33 million award for ATS sustainment is a significant contract that builds upon previous engagements. While specific details of past performance are not provided here, Anduril's involvement in other CBP programs suggests a level of established capability and a strategic partnership aimed at enhancing border surveillance and operational effectiveness.

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: $33,013,825

Exercised Options: $33,013,825

Current Obligation: $33,013,825

Actual Outlays: $33,013,825

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B02C20D00000019

IDV Type: IDC

Timeline