DoD awards $89.4M for MFOCS Processing Units, with a significant portion allocated to a single vendor

Contract Overview

Contract Amount: $89,369,809 ($89.4M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2022-03-10

End Date: 2023-09-01

Contract Duration: 540 days

Daily Burn Rate: $165.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MFOCS PROCESSING UNIT (PU)

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $89.4 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: MFOCS PROCESSING UNIT (PU) Key points: 1. The contract value represents a substantial investment in electronic computer manufacturing capabilities. 2. Competition dynamics for this specific hardware procurement warrant further examination. 3. Potential risks include vendor lock-in and the long-term cost-effectiveness of the chosen solution. 4. Performance context is tied to the Defense Information Systems Agency's operational needs. 5. This spending falls within the broader IT and Defense sectors, supporting critical infrastructure. 6. The contract's fixed-price nature aims to control costs, but requires careful monitoring of scope.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the MFOCS Processing Unit's capabilities and market alternatives. The awarded amount of $89.4 million over its period suggests a significant investment. Comparing it to similar procurements for specialized processing hardware would be necessary to assess if the pricing is competitive. The firm fixed-price contract type indicates an attempt to manage cost certainty, but the overall value proposition depends heavily on the unit's performance and longevity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the data does not specify the number of bids received. A high level of competition typically drives down prices and encourages innovation. The fact that it was competed openly is a positive sign for price discovery, but the ultimate success in achieving competitive pricing depends on the actual number and quality of proposals submitted.

Taxpayer Impact: Taxpayers benefit from the assurance that the government sought the best possible value through a competitive process, rather than directly awarding to a single provider without exploring alternatives.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Defense Information Systems Agency, which will utilize the MFOCS Processing Units. The services delivered involve the manufacturing and provision of critical electronic computer hardware. The geographic impact is primarily within Florida, where the contractor is located, but the ultimate operational use is likely global for DoD operations. Workforce implications include jobs in electronic computer manufacturing and related support services at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the MFOCS Processing Unit becomes a proprietary standard.
Long-term sustainment and upgrade costs for specialized hardware can be significant.
Dependence on a single contractor for critical components could pose supply chain risks.
Ensuring interoperability with existing and future DoD systems requires careful planning.

Positive Signals

Awarded through full and open competition, indicating a potentially competitive pricing environment.
Firm fixed-price contract type provides cost certainty for the government.
The contract supports a specific, likely critical, operational need within the DoD.
The vendor, DRS Network & Imaging Systems LLC, is an established defense contractor.

Sector Analysis

This contract falls within the Electronic Computer Manufacturing (NAICS 334111) sector, which is a subset of the broader Information Technology and Defense industries. The market for specialized processing units is often characterized by high barriers to entry due to R&D costs and stringent performance requirements. Spending in this area is critical for maintaining technological superiority in defense applications. Comparable spending benchmarks would involve analyzing other procurements for similar high-performance computing or specialized electronic components within the federal government.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from a set-aside. The primary contractor is a large business, and any subcontracting opportunities would be at their discretion, not mandated by a small business set-aside provision.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management officials within the Defense Information Systems Agency. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated by the contract award notice, but detailed performance metrics and ongoing oversight activities are generally not publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Systems Agency (DISA) procurements
Electronic Computer Manufacturing contracts
Department of Defense IT infrastructure
High-performance computing procurements

Risk Flags

Potential for vendor lock-in
Long-term sustainment costs
Obsolescence risk
Dependence on specialized hardware

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.4 million to DRS NETWORK & IMAGING SYSTEMS LLC. MFOCS PROCESSING UNIT (PU)

Who is the contractor on this award?

The obligated recipient is DRS NETWORK & IMAGING SYSTEMS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $89.4 million.

What is the period of performance?

Start: 2022-03-10. End: 2023-09-01.

What are the specific technical specifications and intended use cases for the MFOCS Processing Unit?

The provided data does not detail the specific technical specifications or intended use cases for the MFOCS Processing Unit. 'MFOCS' likely refers to a Mobile Forces Command System or a similar operational platform. These units are typically high-performance computing devices designed for ruggedized, mobile, or tactical environments, potentially supporting command and control, intelligence processing, or communication functions in deployed settings. Understanding these specifics is crucial for assessing the necessity of the procurement and the appropriateness of the awarded price. Further details would likely be found in the contract's statement of work or technical exhibits.

How does the awarded price of $89.4 million compare to historical spending on similar processing units by the DoD?

Without specific details on the 'MFOCS Processing Unit' and its technical capabilities, a direct historical spending comparison is difficult. However, $89.4 million represents a significant investment in specialized electronic hardware. To conduct a proper comparison, one would need to identify previous procurements of similar processing units, considering factors like processing power, memory, storage, ruggedization, and intended operational environment. Analyzing trends in unit costs over time for comparable systems would reveal whether this award represents an increase, decrease, or stable pricing relative to past acquisitions. The firm fixed-price nature suggests an effort to cap costs, but the baseline price itself needs historical context.

What is the track record of DRS Network & Imaging Systems LLC in delivering similar complex electronic systems to the Department of Defense?

DRS Network & Imaging Systems LLC, a subsidiary of Leonardo DRS, has a substantial track record as a defense contractor. They are known for providing a range of advanced electronic systems, including command and control solutions, networked systems, and electro-optical/infrared systems for military applications. Their experience suggests a capability to handle complex procurements like the MFOCS Processing Units. However, a deeper dive into their past performance on contracts with similar scope, complexity, and value would be necessary to fully assess their reliability and past success rates in meeting delivery schedules and performance requirements for critical hardware.

What are the potential risks associated with the long-term sustainment and obsolescence of these specialized processing units?

Specialized electronic hardware, particularly for defense applications, faces inherent risks of long-term sustainment challenges and obsolescence. The MFOCS Processing Units, once fielded, will require ongoing maintenance, repair, and potentially upgrades. The vendor's ability and willingness to provide long-term support, including spare parts and technical expertise, is critical. Furthermore, the rapid pace of technological advancement means that these units could become obsolete relatively quickly, requiring costly replacements or upgrades to maintain operational effectiveness. Planning for end-of-life support and future technology insertion is essential to mitigate these risks and avoid becoming locked into outdated technology.

Given the 'full and open competition' award, how many bids were actually received, and what does this imply about the market for these specific units?

While the award was made under 'full and open competition,' the specific number of bids received is not provided in the summary data. This information is crucial for fully understanding the competitive landscape. If only a few bids were received, it might indicate a niche market with limited suppliers or high barriers to entry, potentially leading to less aggressive pricing than if numerous vendors had competed. Conversely, a large number of bids would strongly suggest robust competition and likely better price discovery for the government. Without this detail, we can only infer that the opportunity was open, but not necessarily that it was highly contested.

What is the expected operational lifespan and performance benchmark for the MFOCS Processing Units procured under this contract?

The provided data does not specify the expected operational lifespan or detailed performance benchmarks for the MFOCS Processing Units. The contract duration is listed as 540 days (dur: 540), which likely refers to the period of performance for delivery and initial support, not the unit's intended operational life. Typically, defense hardware is expected to have a lifespan of several years, often a decade or more, depending on the technology and its application. Performance benchmarks would be defined in the contract's statement of work, detailing metrics such as processing speed, reliability, power consumption, and environmental resilience. Assessing the value and effectiveness of this contract hinges on meeting these unstated performance expectations over its intended service life.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HC102817R0006

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

Address: 100 N BABCOCK ST, MELBOURNE, FL, 32935

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

Financial Breakdown

Contract Ceiling: $89,369,809

Exercised Options: $89,369,809

Current Obligation: $89,369,809

Actual Outlays: $27,325,496

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $36,103,801

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HC102818D0045

IDV Type: IDC

Timeline