DoD's $22.4M contract for aeronautical systems instruments awarded to SAAB INC

Contract Overview

Contract Amount: $22,464,045 ($22.5M)

Contractor: Saab Inc

Awarding Agency: Department of Defense

Start Date: 2009-05-13

End Date: 2011-01-13

Contract Duration: 610 days

Daily Burn Rate: $36.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 3DELRR

Place of Performance

Location: EAST SYRACUSE, ONONDAGA County, NEW YORK, 13057

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $22.5 million to SAAB INC for work described as: 3DELRR Key points: 1. Value for money appears fair given the fixed-price nature of the contract. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a defined performance period and fixed pricing. 4. Performance context is within the manufacturing of critical navigation and guidance systems. 5. Sector positioning is within the defense industrial base for aerospace components.

Value Assessment

Rating: fair

The contract's total value of $22.4 million for aeronautical navigation and guidance systems is within a reasonable range for specialized defense equipment. As a firm fixed-price contract, the pricing structure shifts risk to the contractor, which can be beneficial for the government if costs are managed effectively. Benchmarking against similar contracts for complex avionics would provide a clearer picture of value, but the fixed-price nature suggests an effort to control costs upfront.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a degree of competition, though the exact number of bids received is not specified. A full and open process generally promotes price discovery and allows the government to select the best value offering.

Taxpayer Impact: A full and open competition is favorable for taxpayers as it increases the likelihood of receiving competitive pricing and encourages contractors to offer their best terms.

Public Impact

The Department of Defense benefits from the acquisition of essential navigation and guidance systems for its aircraft. Services delivered include the manufacturing and supply of specialized aeronautical instruments. The geographic impact is primarily centered around the contractor's operations in New York. Workforce implications include employment opportunities within the aerospace manufacturing sector, particularly in New York.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if contractor's fixed-price estimates were inaccurate.
Dependence on a single contractor for specialized components could pose supply chain risks.

Positive Signals

Firm fixed-price contract structure limits government exposure to cost increases.
Awarded through full and open competition, suggesting a competitive market.
Contractor's location in New York may leverage existing aerospace industry infrastructure.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on navigation and guidance systems. The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' represents a specialized segment of the broader defense industrial base. Spending in this area is critical for maintaining technological superiority in aviation and defense operations. Comparable spending benchmarks would typically involve analyzing other contracts for similar avionics and instrument systems awarded by various defense agencies.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting plans for small businesses in the provided data. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract terms, requiring the contractor to deliver specified goods. Transparency is generally maintained through contract databases, though detailed performance reviews are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aeronautical Systems
Navigation Systems
Guidance Systems
Defense Manufacturing
Aerospace Instruments

Risk Flags

Potential for supply chain disruption if contractor faces issues.
Need for ongoing quality assurance to ensure system reliability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.5 million to SAAB INC. 3DELRR

Who is the contractor on this award?

The obligated recipient is SAAB INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $22.5 million.

What is the period of performance?

Start: 2009-05-13. End: 2011-01-13.

What is SAAB INC.'s track record with similar Department of Defense contracts?

SAAB INC. has a significant history of contracting with the Department of Defense, often involving complex defense systems, including those related to aerospace and defense electronics. Their portfolio typically includes radar systems, avionics, and other specialized defense technologies. Analyzing their past performance on firm fixed-price contracts of similar value and complexity would provide insight into their reliability and ability to meet delivery schedules and quality standards. A review of past performance evaluations and any documented issues or successes would be crucial for a comprehensive assessment of their track record on this specific contract.

How does the $22.4 million value compare to similar contracts for navigation and guidance systems?

The $22.4 million contract value for aeronautical navigation and guidance systems is moderate within the defense sector. To benchmark effectively, one would need to compare it against other firm fixed-price contracts awarded by the DoD or other military branches for similar systems, such as radar altimeters, inertial navigation units, or flight control computers. Factors like system complexity, technological sophistication, quantity ordered, and the specific performance requirements would influence price. Without access to a detailed database of comparable contracts, it's challenging to definitively state if this represents excellent, fair, or questionable value, but the fixed-price nature suggests an attempt to cap costs.

What are the primary risks associated with this contract for the government?

The primary risks for the government on this contract, despite being firm fixed-price, include potential contractor underperformance, delivery delays, or issues with product quality and reliability. If SAAB INC. underestimated their costs or encountered unforeseen production challenges, they might struggle to meet the contract's specifications or timeline, potentially impacting operational readiness. Furthermore, reliance on a single source for these critical components, even if competitively selected, can pose a long-term supply chain risk. Ensuring robust quality assurance and acceptance testing protocols is vital to mitigate these risks.

How effective are navigation and guidance systems in enhancing military aircraft performance?

Navigation and guidance systems are fundamental to the effective operation of modern military aircraft, significantly enhancing performance, safety, and mission success. Advanced systems provide precise positioning, enabling accurate targeting, efficient flight path management, and reduced pilot workload. They are critical for operations in all weather conditions, contested airspace, and for complex maneuvers. The reliability and accuracy of these systems directly correlate with the aircraft's ability to perform its intended mission, whether it be reconnaissance, combat, or transport, thereby contributing directly to overall military capability and effectiveness.

What has been the historical spending trend for aeronautical system instruments by the Department of Defense?

Historical spending by the Department of Defense on aeronautical system instruments, including navigation and guidance components, has generally been substantial and consistent, reflecting the ongoing need to equip and modernize its vast fleet of aircraft. Spending fluctuates based on new platform development, upgrade cycles, and technological advancements. While specific figures for this sub-category require detailed analysis of defense budget appropriations and contract awards over time, the overall trend indicates a sustained investment in avionics and related systems to maintain air superiority and operational effectiveness. Factors like geopolitical events and defense strategy shifts can influence these spending patterns.

What is the significance of the NAICS code 334511 in the context of defense procurement?

The NAICS code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' is highly significant in defense procurement as it identifies a critical segment of the industrial base responsible for producing essential components for military aviation and maritime operations. Companies operating under this code supply the sophisticated technology that underpins aircraft navigation, targeting, and situational awareness. The DoD relies heavily on this sector for both new acquisitions and sustainment of existing platforms. Procurement under this code often involves high-value, technologically advanced contracts requiring specialized expertise and rigorous quality control.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 85 COLLAMER CROSSING PKWY, EAST SYRACUSE, NY, 22

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

Financial Breakdown

Contract Ceiling: $22,464,045

Exercised Options: $22,464,045

Current Obligation: $22,464,045

Contract Characteristics

Cost or Pricing Data: NO

Timeline