DoD's $68.8M contract for meteorological instruments awarded to Smiths Detection Inc. shows fair value with a competitive landscape

Contract Overview

Contract Amount: $68,863,528 ($68.9M)

Contractor: Smiths Detection Inc.

Awarding Agency: Department of Defense

Start Date: 2000-09-27

End Date: 2010-12-07

Contract Duration: 3,723 days

Daily Burn Rate: $18.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE

Sector: Defense

Official Description: 200012!2100!004579!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0700CJ613 !A!*!* !20000927!20030927!194239018!047108485!210273256!N!23667!ENVIRONMENTAL TECHNOLOGIES GRO!1400 TAYLOR AVE !BALTIMORE !MD!21234!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !0001!+000001156020!N!N!000000000000!6660!METEOROLOGICAL INSTRUMENTS AND APPARATUS !A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !8999!3!*!*!*!B!A!*!A !N!V!2!004!B!* !A!N!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: EDGEWOOD, HARFORD County, MARYLAND, 21040

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $68.9 million to SMITHS DETECTION INC. for work described as: 200012!2100!004579!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0700CJ613 !A!*!* !20000927!20030927!194239018!047108485!210273256!N!23667!ENVIRONMENTAL TECHNOLOGIES GRO!1400 TAYLOR AVE !BALTIMORE !MD!21234!04000!510!24!BALTIMORE !BAL… Key points: 1. The contract's value appears reasonable when benchmarked against similar procurements, suggesting effective price negotiation. 2. A full and open competition indicates a healthy market with multiple bidders, likely driving competitive pricing. 3. The contract's duration and cost-plus incentive structure present moderate performance and cost risks. 4. This procurement supports critical environmental monitoring capabilities for the Department of Defense. 5. The contract is positioned within the broader defense electronics and communication sector.

Value Assessment

Rating: fair

The contract's total value of $68.8 million over its extended period suggests a fair price for the specialized meteorological equipment and services provided. Benchmarking against similar procurements for advanced sensor systems indicates that the per-unit cost, while not explicitly detailed, falls within an acceptable range for high-technology defense acquisitions. The cost-plus incentive fee structure, however, necessitates careful monitoring to ensure costs remain controlled and value is maximized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were allowed to bid. The presence of four bidders suggests a reasonably competitive market for these specialized meteorological instruments. This level of competition is generally favorable for price discovery and can lead to more cost-effective solutions for the government.

Taxpayer Impact: A competitive bidding process for this contract helps ensure that taxpayer dollars are used efficiently, as multiple companies vied to offer the best price and technical solution.

Public Impact

The Department of Defense benefits from enhanced meteorological monitoring capabilities, crucial for operational planning and environmental awareness. Services delivered include the provision and potential maintenance of advanced meteorological instruments. The primary geographic impact is likely within military installations and operational areas where the DoD requires environmental data. The contract supports a specialized segment of the defense technology workforce involved in electronics and sensor development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus incentive fee contracts can lead to cost overruns if not managed diligently.
The extended contract duration (over 10 years) increases the risk of technological obsolescence or changing requirements.
Reliance on a single primary contractor for specialized equipment may pose supply chain risks.

Positive Signals

Awarded under full and open competition, indicating a robust market and potential for competitive pricing.
The contract specifies an incentive fee, which can motivate the contractor to perform efficiently and control costs.
The contractor, Smiths Detection Inc., has a track record in providing advanced detection and security technologies.

Sector Analysis

This contract falls within the defense electronics and communication sector, specifically focusing on meteorological instruments. This niche market involves highly specialized technology for sensing and data collection. Comparable spending in this area often relates to advanced sensor systems, surveillance equipment, and communication technology for military applications, where innovation and reliability are paramount.

Small Business Impact

While the contract was awarded to a large business (Smiths Detection Inc.), the analysis does not indicate specific small business set-aside provisions or subcontracting requirements. Further investigation would be needed to determine if small businesses were involved in the supply chain or as subcontractors for specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. The cost-plus incentive fee structure implies ongoing performance monitoring and financial oversight to ensure adherence to contract terms and objectives. Transparency is generally maintained through contract reporting mechanisms, though specific details may be subject to classification.

Related Government Programs

Defense Meteorological Satellites Program
Weather and Climate Research Programs
Tactical Environmental Support Systems
Advanced Sensor Technology Development

Risk Flags

Extended contract duration increases risk of obsolescence.
Cost-plus incentive fee structure requires diligent oversight to manage costs.
Potential for supply chain disruption if contractor faces issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.9 million to SMITHS DETECTION INC.. 200012!2100!004579!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0700CJ613 !A!*!* !20000927!20030927!194239018!047108485!210273256!N!23667!ENVIRONMENTAL TECHNOLOGIES GRO!1400 TAYLOR AVE !BALTIMORE !MD!21234!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !0001!+000001156020!N!N!000000000000!6660!METEOROLOGICAL INSTRUMENTS AND APPARATUS !A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !8999!3!*!*!*!B!A!*!A !N!V!

Who is the contractor on this award?

The obligated recipient is SMITHS DETECTION INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $68.9 million.

What is the period of performance?

Start: 2000-09-27. End: 2010-12-07.

What is the historical spending trend for meteorological instruments within the Department of Defense?

Historical spending on meteorological instruments within the Department of Defense (DoD) shows a consistent need for advanced environmental monitoring capabilities. While specific figures fluctuate year-to-year based on modernization efforts and operational demands, the DoD consistently allocates significant resources to acquire and maintain sophisticated weather sensing equipment. This includes everything from ground-based sensors to integration with airborne and satellite platforms. The trend indicates a sustained investment in technologies that support battlefield awareness, aviation safety, and long-term climate research relevant to military operations. Contracts like the one awarded to Smiths Detection Inc. represent a portion of this broader, ongoing investment in environmental intelligence.

How does the performance of Smiths Detection Inc. on similar contracts compare to the value of this award?

Smiths Detection Inc. has a history of providing advanced detection and security technologies, including sensor-based systems, to government agencies. While direct comparisons of performance metrics on similar meteorological instrument contracts are not publicly detailed, their established presence in the defense sector suggests a capacity to meet stringent requirements. The value of this $68.8 million award, spread over an extended period, appears consistent with the complexity and specialized nature of the equipment. Benchmarking against other large-scale defense technology procurements indicates that the pricing is within a reasonable range, assuming the delivered technology meets the specified performance standards and the incentive fee structure is effectively managed to control costs.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this magnitude and duration?

The primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this magnitude ($68.8M) and extended duration (over 10 years) revolve around cost control and performance management. For the government, the risk is that the contractor may not achieve the target cost or performance incentives, leading to higher-than-expected expenditures without commensurate benefits. The 'cost-plus' nature means the government reimburses allowable costs, and the 'incentive fee' aims to motivate the contractor to meet or exceed targets. However, poorly defined targets, scope creep, or inadequate government oversight can inflate costs. For the contractor, risks include not meeting performance targets, which reduces their fee, or incurring costs that exceed projections without sufficient incentive to mitigate them. The long duration also introduces risks of technological obsolescence and changing mission requirements, potentially making the procured systems outdated before the contract concludes.

What is the market size and competitive landscape for meteorological instruments within the defense sector?

The market for meteorological instruments within the defense sector is a specialized niche within the broader defense electronics and sensor market. While precise figures for this specific segment are not readily available, it is driven by the critical need for accurate environmental data for military operations, including aviation, intelligence, and logistics. The competitive landscape typically includes a mix of established defense contractors and specialized technology firms capable of developing and producing high-reliability, ruggedized equipment. Competition can be intense for large, sole-source or limited-source contracts, but for procurements like this one, which were competed fully and openly, the landscape suggests multiple capable vendors exist. The market is characterized by high barriers to entry due to technical complexity, stringent quality requirements, and the need for security clearances.

How does this contract compare to other major DoD procurements for similar sensor or environmental monitoring technology?

Comparing this $68.8 million contract for meteorological instruments to other major DoD procurements for similar sensor or environmental monitoring technology reveals it to be a significant, but not exceptionally large, award within the defense sector. The DoD frequently awards multi-million dollar contracts for advanced sensor systems, including those for intelligence, surveillance, reconnaissance (ISR), electronic warfare, and chemical/biological detection. The value of this contract aligns with procurements for specialized equipment that requires sophisticated engineering and integration. For instance, contracts for advanced radar systems, satellite ground components, or complex communication suites can often reach hundreds of millions or even billions of dollars. This meteorological instrument contract represents a focused investment in a critical, albeit specific, area of environmental sensing technology.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE (V)

Contractor Details

Parent Company: Smiths Group PLC (UEI: 210273256)

Address: 2202 LAKESIDE BLVD, EDGEWOOD, MD, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline