Department of Defense awards $41.8M contract to SRC Inc. for Counter Unmanned Aerial System (C-UAS) technology

Contract Overview

Contract Amount: $41,758,866 ($41.8M)

Contractor: SRC Inc

Awarding Agency: Department of Defense

Start Date: 2018-04-13

End Date: 2019-04-12

Contract Duration: 364 days

Daily Burn Rate: $114.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COUNTER UNMANNED AERIAL SYSTEM (C-UAS)/SRC UCA #2 JEON-ST008 AND JUON-CC-0058

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13212

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $41.8 million to SRC INC for work described as: COUNTER UNMANNED AERIAL SYSTEM (C-UAS)/SRC UCA #2 JEON-ST008 AND JUON-CC-0058 Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price efficiencies. 2. The contract value represents a significant investment in C-UAS capabilities for the Air Force. 3. Performance period of one year suggests a focus on immediate operational needs or a specific project phase. 4. The North American Industry Classification System (NAICS) code 334419 indicates a focus on electronic component manufacturing, relevant to C-UAS systems. 5. Fixed-price contract type aims to transfer some cost risk to the contractor. 6. The award to a single, established contractor may limit opportunities for emerging technology providers.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed cost breakdowns or comparisons to similar C-UAS system procurements. The fixed-price nature suggests an attempt to control costs, but the lack of competition means there's no direct market comparison to assess if the price is optimal. The award amount of $41.8 million for a one-year duration for specialized electronic components warrants scrutiny to ensure it aligns with industry standards for similar technological solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency precludes a competitive process. The absence of competition limits the government's ability to leverage market forces to achieve the lowest possible price and may indicate a reliance on a single source for critical C-UAS technology.

Taxpayer Impact: Taxpayers may not benefit from the potential cost savings that could arise from a competitive bidding process. The lack of competition could lead to higher prices than might be achieved in an open market.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives advanced C-UAS technology to counter threats. The contract supports the development and/or procurement of systems designed to detect, track, and neutralize unmanned aerial systems. Geographic impact is likely focused on operational bases and areas where C-UAS threats are a concern. Workforce implications may include specialized engineering, manufacturing, and technical support roles at SRC Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may stifle innovation by excluding other potential C-UAS solution providers.
Reliance on a single vendor for critical defense technology could pose supply chain risks.

Positive Signals

Contract awarded to SRC Inc., a known entity in defense electronics, suggesting potential for reliable delivery.
Fixed-price contract type shifts some financial risk to the contractor.
Focus on C-UAS technology addresses a growing and critical national security concern.

Sector Analysis

The Counter Unmanned Aerial System (C-UAS) market is a rapidly growing segment within the broader defense electronics sector. Driven by the proliferation of affordable drone technology and their potential misuse, governments worldwide are increasing investments in C-UAS solutions. This contract fits within the 'Other Electronic Component Manufacturing' NAICS code, suggesting a focus on the hardware and integrated systems necessary for C-UAS operations. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature and evolving threat landscape, but overall defense spending on counter-drone technologies is substantial and increasing.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to SRC Inc., a larger defense contractor, suggests that the primary focus was on acquiring specialized capabilities rather than promoting small business participation. This could mean limited direct opportunities for small businesses within this specific contract, although SRC Inc. may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The specific performance metrics and deliverables would be outlined in the contract's statement of work. Transparency regarding the justification for the sole-source award and the contractor's performance reporting would be key aspects of accountability.

Related Government Programs

Department of Defense C-UAS Procurement
Air Force Electronic Warfare Systems
Counter-Drone Technology Development
Defense Electronics Manufacturing

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency on specific performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.8 million to SRC INC. COUNTER UNMANNED AERIAL SYSTEM (C-UAS)/SRC UCA #2 JEON-ST008 AND JUON-CC-0058

Who is the contractor on this award?

The obligated recipient is SRC 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 $41.8 million.

What is the period of performance?

Start: 2018-04-13. End: 2019-04-12.

What is SRC Inc.'s track record with the Department of Defense, particularly in C-UAS or related electronic systems?

SRC Inc. has a significant history of contracting with the Department of Defense, particularly in areas related to electronic warfare, radar systems, and intelligence, surveillance, and reconnaissance (ISR). While specific details on their C-UAS program performance for this particular contract (JEON-ST008 and JUON-CC-0058) are not publicly detailed in the provided data, their established presence in defense electronics suggests a level of experience and capability. The company has been involved in developing and supplying various sensor and electronic systems that could be foundational or directly applicable to C-UAS solutions. Further analysis would require examining past performance reviews, contract awards in similar technology areas, and any publicly available information on their C-UAS product lines and deployments.

How does the $41.8 million contract value compare to other C-UAS procurements by the DoD or similar agencies?

Directly comparing the $41.8 million value is difficult without knowing the exact scope of work (e.g., research and development, procurement of a specific number of systems, integration services). However, C-UAS procurements can range significantly. Smaller, technology-focused awards might be in the millions, while larger system integrations or fleet-wide deployments could reach hundreds of millions or even billions. Given this contract's one-year duration and sole-source nature, it likely represents a specific phase or a particular set of capabilities rather than a comprehensive, long-term solution. The value appears substantial for a single year, underscoring the high cost associated with advanced defense technologies in this domain.

What are the primary risks associated with a sole-source award for critical defense technology like C-UAS?

The primary risks associated with a sole-source award for critical defense technology like C-UAS include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate aggressively beyond the contract's defined scope, and a potential lack of technological diversity if alternative solutions exist. Taxpayers may bear a higher cost than necessary. Furthermore, over-reliance on a single vendor can create vulnerabilities in the supply chain and reduce the government's flexibility if the contractor faces performance issues, financial instability, or strategic shifts. It also limits opportunities for smaller, innovative companies to enter the market and contribute their solutions.

How effective are fixed-price contracts in managing costs for complex electronic systems like C-UAS?

Fixed-price contracts (like the Firm Fixed Price used here) are generally intended to provide cost certainty and transfer risk to the contractor. They are most effective when the scope of work is well-defined and understood, minimizing the potential for costly changes or unforeseen issues. For complex electronic systems like C-UAS, effectiveness depends heavily on the initial definition of requirements. If requirements are clear and stable, a fixed-price contract can incentivize the contractor to manage costs efficiently to maximize profit. However, if the technology is cutting-edge or the operational environment is uncertain, fixed-price contracts can sometimes lead to contractors cutting corners on quality or scope to meet the price, or conversely, lead to costly change orders if requirements evolve significantly.

What is the historical spending trend for C-UAS technology within the Department of the Air Force?

Historical spending trends for C-UAS technology within the Department of the Air Force, and the DoD more broadly, show a significant and accelerating increase over the past decade. Initially, spending was more focused on research and development of basic detection and mitigation techniques. As the threat landscape evolved with the proliferation of drones, spending has shifted towards procuring and integrating operational systems, including radar, electro-optical/infrared sensors, jammers, and kinetic defeat mechanisms. The Air Force, like other branches, has established programs and initiatives to counter UAS threats across various operational contexts. This $41.8 million award is indicative of the ongoing investment required to maintain an advantage against evolving UAS capabilities.

What does the NAICS code 334419 ('Other Electronic Component Manufacturing') imply about the nature of this C-UAS contract?

The NAICS code 334419 suggests that this contract is primarily focused on the manufacturing of specific electronic components that are integral to Counter Unmanned Aerial System (C-UAS) technology. This could include components like specialized processors, sensors, communication modules, power management units, or other integrated circuits that form the building blocks of C-UAS hardware. It implies that SRC Inc. is likely producing or supplying these critical parts, which are then assembled into a larger system, potentially by SRC itself or another entity. This contrasts with contracts focused solely on software development, system integration services, or the procurement of complete, off-the-shelf C-UAS platforms.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7502 ROUND POND RD, NORTH SYRACUSE, NY, 13212

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

Financial Breakdown

Contract Ceiling: $41,758,866

Exercised Options: $41,758,866

Current Obligation: $41,758,866

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $5,357,127

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline