DoD's $155.9M MODI System Contract Awarded to Sierra Nevada Company, LLC
Contract Overview
Contract Amount: $155,891,199 ($155.9M)
Contractor: Sierra Nevada Company, LLC
Awarding Agency: Department of Defense
Start Date: 2018-09-30
End Date: 2021-10-29
Contract Duration: 1,125 days
Daily Burn Rate: $138.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MODI LOW/MID/HIGH SYSTEM
Place of Performance
Location: SPARKS, WASHOE County, NEVADA, 89434
State: Nevada Government Spending
Plain-Language Summary
Department of Defense obligated $155.9 million to SIERRA NEVADA COMPANY, LLC for work described as: MODI LOW/MID/HIGH SYSTEM Key points: 1. The contract is for a MODI (low/mid/high) system, crucial for Special Operations Command. 2. Sierra Nevada Company, LLC is the sole awardee, raising questions about competition. 3. The firm fixed price contract type suggests cost control, but the lack of competition is a risk. 4. The sector is IT/Defense, specifically system and instrument manufacturing.
Value Assessment
Rating: questionable
The contract's value of $155.9 million is significant. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for this critical system.
Public Impact
Special Operations Command relies on this system for critical search, detection, and navigation functions. The award to a single vendor could impact the availability of advanced technology in the future. Taxpayers are funding a significant contract without the benefit of competitive pricing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Sole-Source Award
- Potential for Overpricing
Positive Signals
- Firm Fixed Price Contract
- Critical System for Special Operations
Sector Analysis
This contract falls within the IT/Defense sector, specifically in the manufacturing of advanced navigation and guidance systems. Spending benchmarks for similar sole-source systems are hard to establish without competitive data.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature likely precluded small business participation.
Oversight & Accountability
The lack of competition raises concerns about oversight. Further review is needed to ensure the Department of Defense adequately justified the sole-source award and that the pricing is reasonable.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- U.S. Special Operations Command Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for inflated costs due to lack of bidding.
- Limited transparency on justification for sole-source.
- No apparent small business participation.
Tags
search-detection-navigation-guidance-aer, department-of-defense, nv, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $155.9 million to SIERRA NEVADA COMPANY, LLC. MODI LOW/MID/HIGH SYSTEM
Who is the contractor on this award?
The obligated recipient is SIERRA NEVADA COMPANY, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (U.S. Special Operations Command).
What is the total obligated amount?
The obligated amount is $155.9 million.
What is the period of performance?
Start: 2018-09-30. End: 2021-10-29.
What specific justification was provided for awarding this contract on a sole-source basis, and how does it align with DoD's policies on competitive sourcing?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, or in cases of urgent need. DoD policy emphasizes competition as the preferred method for awarding contracts to ensure best value and fair pricing. A thorough review of the justification document is necessary to assess its validity and adherence to procurement regulations.
What is the estimated cost savings that could have been achieved if this contract had been competed?
Without competitive bidding, it is impossible to provide an exact figure for potential cost savings. However, studies consistently show that competitive contracting can yield significant savings, often ranging from 10% to 30% or more compared to sole-source awards. The $155.9 million value of this contract suggests that even a modest percentage saving would amount to millions of taxpayer dollars.
How will the performance and effectiveness of the MODI system be monitored to ensure it meets the needs of U.S. Special Operations Command, given the lack of competitive pressure?
Despite the lack of competitive pressure, robust contract performance monitoring is crucial. This includes establishing clear performance metrics, conducting regular reviews of deliverables, and ensuring the system meets all technical and operational requirements. The government should maintain strong oversight to hold Sierra Nevada Company accountable for delivering a high-quality product that fulfills the critical mission needs of SOCOM.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: H9222217R0001
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 444 SALOMON CIR, SPARKS, NV, 89434
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business
Financial Breakdown
Contract Ceiling: $155,891,199
Exercised Options: $155,891,199
Current Obligation: $155,891,199
Subaward Activity
Number of Subawards: 75
Total Subaward Amount: $95,526,724
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9222217D0023
IDV Type: IDC
Timeline
Start Date: 2018-09-30
Current End Date: 2021-10-29
Potential End Date: 2021-10-29 00:00:00
Last Modified: 2021-12-06
More Contracts from Sierra Nevada Company, LLC
- Survivable Airborne Operations Center (saoc) — $2.6B (Department of Defense)
- SNC Model DO 0001 — $655.3M (Department of Defense)
- Engineering&manufacturing Development — $495.7M (Department of Defense)
- BIG Safari — $442.6M (Department of Defense)
- BIG Safari — $429.7M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)