DoD awards $184M contract to Marvell Government Solutions for semiconductor manufacturing support

Contract Overview

Contract Amount: $184,332,137 ($184.3M)

Contractor: Marvell Government Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2019-10-08

End Date: 2023-08-15

Contract Duration: 1,407 days

Daily Burn Rate: $131.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWARD SEPARATING ASIC SOW.

Place of Performance

Location: ESSEX JUNCTION, CHITTENDEN County, VERMONT, 05452

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $184.3 million to MARVELL GOVERNMENT SOLUTIONS LLC for work described as: AWARD SEPARATING ASIC SOW. Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost efficiencies. 2. Long duration of over three years suggests a need for sustained support in microelectronics. 3. Firm Fixed Price contract type aims to control costs, but initial award value is substantial. 4. Focus on semiconductor manufacturing indicates critical supply chain support for defense needs. 5. Awardee has a history with government contracts, but specific performance on this scope is key. 6. The contract's value places it in the upper tier of defense microelectronics procurements.

Value Assessment

Rating: fair

The award of $184.3 million for semiconductor manufacturing support is a significant investment. Without a competitive bidding process, it is difficult to benchmark the value for money effectively. The firm-fixed-price structure is a positive indicator for cost control, but the absence of competition means potential savings from market forces were not realized. Further analysis would require comparing the scope of work and deliverables to similar non-competed contracts within the Defense Microelectronics Activity or broader DoD.

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. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed contract. It is crucial to understand the justification for this sole-source award to ensure it was indeed necessary and that alternatives were thoroughly explored.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government did not benefit from the price reductions and innovation that typically arise from a competitive procurement process.

Public Impact

The Department of Defense benefits from sustained access to critical semiconductor manufacturing capabilities. This contract supports the production of essential microelectronic components vital for national security. The geographic impact is primarily within the defense industrial base, potentially supporting specialized manufacturing facilities. Workforce implications include the need for skilled personnel in semiconductor design, fabrication, and testing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits transparency and potential cost savings.
Long contract duration could lead to scope creep or evolving requirements not fully captured in initial pricing.
Reliance on a single vendor for critical components poses supply chain risk if the vendor faces disruptions.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Awardee's experience in government contracting suggests familiarity with compliance and reporting requirements.
Focus on a critical defense sector like microelectronics addresses a known strategic vulnerability.

Sector Analysis

The semiconductor industry is a cornerstone of modern technology and national security. This contract falls within the Semiconductor and Related Device Manufacturing sector (NAICS 334413). The defense sector's reliance on advanced microelectronics is growing, making domestic manufacturing capabilities and supply chain resilience paramount. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of defense microelectronics, but significant government investment in this area is common.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit information regarding subcontracting plans for small businesses. The focus on specialized semiconductor manufacturing may limit opportunities for broad small business participation unless specific subcontracting goals are mandated and met by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. The Defense Microelectronics Activity (DMEA) is responsible for managing this award. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Microelectronics Activity (DMEA) Contracts
Semiconductor Manufacturing Support
Department of Defense Supply Chain Management
Advanced Microelectronics Procurement

Risk Flags

Sole-source award lacks competitive justification.
Potential for cost overruns due to non-competitive nature.
Supply chain risk associated with single-source provider for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $184.3 million to MARVELL GOVERNMENT SOLUTIONS LLC. AWARD SEPARATING ASIC SOW.

Who is the contractor on this award?

The obligated recipient is MARVELL GOVERNMENT SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Microelectronics Activity).

What is the total obligated amount?

The obligated amount is $184.3 million.

What is the period of performance?

Start: 2019-10-08. End: 2023-08-15.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' and is a 'SOLE SOURCE'. The specific justification for this sole-source award is not detailed in the provided data snippet. Typically, sole-source justifications are based on factors such as the urgency of the requirement, the unavailability of other sources, or the existence of unique capabilities held by a single contractor. For a contract of this magnitude ($184.3 million) and duration (1407 days), a detailed justification, often requiring approval from higher authorities within the Department of Defense, would have been necessary. This justification would outline why full and open competition was not feasible or not in the government's best interest. Without access to the official justification document (e.g., a Justification and Approval - J&A), the precise reasons remain unknown.

How does the $184.3 million award value compare to similar semiconductor manufacturing support contracts within the DoD?

Benchmarking the $184.3 million award value requires comparing it to similar contracts for semiconductor manufacturing support, particularly those awarded by the Department of Defense (DoD) or its specialized agencies like the Defense Microelectronics Activity (DMEA). Given the specialized nature of defense microelectronics, direct comparisons can be challenging. However, large-scale contracts in this domain often range from tens to hundreds of millions of dollars, reflecting the high costs of research, development, fabrication, and testing of advanced semiconductor technologies. The firm-fixed-price nature of this contract suggests a defined scope, but the long duration (1407 days) implies significant ongoing support. Without access to a broader database of comparable contracts, it's difficult to definitively state if $184.3 million represents a premium, a fair price, or a bargain. However, the scale indicates a substantial commitment to securing critical microelectronics capabilities.

What are the primary risks associated with a sole-source award for critical defense microelectronics?

A primary risk associated with a sole-source award for critical defense microelectronics is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the contractor may not be incentivized to offer the lowest possible price. Another significant risk is reduced innovation; a competitive environment often spurs contractors to develop more efficient or advanced solutions. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to switch suppliers if performance issues arise or if better alternatives become available later. Dependence on a single supplier also increases supply chain vulnerability. If the sole-source provider experiences production issues, financial instability, or geopolitical challenges, the DoD's access to critical components could be severely jeopardized, impacting national security readiness.

What is the expected performance period and scope of work for this contract?

The contract has a duration of 1407 days, which translates to approximately 3.85 years. This extended period suggests a need for sustained support in semiconductor manufacturing. The data indicates the award is for 'AWARD SEPARATING ASIC SOW', implying support related to Application-Specific Integrated Circuits (ASICs) and potentially the Statement of Work (SOW) associated with separating or managing these components. The scope likely involves services related to the design, fabrication, testing, or integration of ASICs crucial for defense applications. Given the 'Semiconductor and Related Device Manufacturing' NAICS code, the work could encompass advanced manufacturing processes, quality assurance, and potentially lifecycle support for these specialized microelectronic devices.

What does the 'VT' status code signify for this contract?

The status code 'VT' for this contract typically signifies 'VETERAN-OWNED SMALL BUSINESS SET-ASIDE'. However, the provided data explicitly states 'ss: false' (small business set-aside is false) and 'sb: false' (small business is false). This creates a contradiction. In federal procurement, status codes are used to categorize contract types and set-asides. If 'VT' indeed means Veteran-Owned Small Business Set-Aside, and the 'ss' and 'sb' flags are false, it suggests either an error in the data provided, or that 'VT' might represent something else in the specific database or system from which this data was extracted. It is crucial to verify the meaning of 'VT' in its original context. If it were a veteran-owned small business set-aside, it would imply a portion of the contract value or specific tasks were reserved for businesses owned by service-disabled or veteran owners.

Industry Classification

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

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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

Parent Company: Marvell Government Solutions LLC

Address: 1000 RIVER ST, ESSEX JUNCTION, VT, 05452

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $266,008,393

Exercised Options: $266,008,393

Current Obligation: $184,332,137

Actual Outlays: $450,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline