DoD's $22.1M contract for navigation systems awarded to SAAB, INC. lacked competition

Contract Overview

Contract Amount: $22,186,604 ($22.2M)

Contractor: Saab, Inc

Awarding Agency: Department of Defense

Start Date: 2005-07-01

End Date: 2010-06-30

Contract Duration: 1,825 days

Daily Burn Rate: $12.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: LABOR - TASK DIRECTION #4

Place of Performance

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

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $22.2 million to SAAB, INC for work described as: LABOR - TASK DIRECTION #4 Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Significant duration of 5 years suggests a long-term need for these specialized systems. 3. The contract type, Time and Materials, can pose cost control challenges if not managed closely. 4. SAAB, INC. is a known entity in defense contracting, but performance context is limited. 5. The North American Industry Classification System (NAICS) code 334511 points to a niche manufacturing sector. 6. Awarded by the Defense Contract Management Agency, indicating a focus on defense readiness.

Value Assessment

Rating: fair

The contract's value of $22.1 million over five years for navigation systems appears within a reasonable range for specialized defense equipment. However, without comparable sole-source contracts or detailed cost breakdowns, a precise value-for-money assessment is difficult. The Time and Materials pricing structure introduces inherent risk for cost overruns if not rigorously monitored. Benchmarking against similar sole-source awards for navigation systems would be necessary for a more definitive value judgment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one bidder, SAAB, INC., was considered. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. The lack of competition means that taxpayers did not benefit from the potential cost efficiencies and wider range of solutions that a competitive procurement might have offered.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price or value, as there was no market pressure to reduce costs.

Public Impact

The primary beneficiaries are the Department of Defense, which receives critical navigation systems for its operations. The contract supports the development and manufacturing of Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. The geographic impact is primarily linked to SAAB, INC.'s operations in New York. The contract likely supports a specialized workforce within SAAB, INC. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Time and Materials contract type can lead to cost overruns if not managed effectively.
Limited public information on contractor performance and specific system capabilities.

Positive Signals

Award to an established company (SAAB, INC.) may indicate a level of trust and prior performance.
Contract supports critical defense navigation systems, contributing to national security.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on navigation and guidance systems. The NAICS code 334511 covers establishments primarily engaged in manufacturing instruments for indicating, measuring, and recording scientific and technical data, as well as navigation, and guidance systems. The market for such specialized defense components is often characterized by high barriers to entry, proprietary technology, and a limited number of qualified suppliers, which can influence procurement strategies.

Small Business Impact

There is no indication that this contract included small business set-asides. As a sole-source award to SAAB, INC., it is unlikely that subcontracting opportunities for small businesses were a primary consideration in the initial award. Further analysis would be needed to determine if SAAB, INC. has a history of subcontracting with small businesses on similar contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Time and Materials contract type necessitates close monitoring of labor hours and material costs to prevent overspending. Transparency is limited due to the sole-source nature of the award, with detailed justifications for the procurement approach not readily available in the provided data.

Related Government Programs

Defense Navigation Systems Procurement
Aerospace and Defense Manufacturing Contracts
Sole-Source Defense Awards
Time and Materials Defense Contracts

Risk Flags

Sole-source award
Time and Materials contract type
Lack of competition data
Limited performance metrics available

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.2 million to SAAB, INC. LABOR - TASK DIRECTION #4

Who is the contractor on this award?

The obligated recipient is SAAB, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $22.2 million.

What is the period of performance?

Start: 2005-07-01. End: 2010-06-30.

What is SAAB, INC.'s track record with the Department of Defense, particularly on similar navigation system contracts?

SAAB, INC. is a known defense contractor. While the provided data indicates this specific contract was awarded in 2005 and completed in 2010, a comprehensive review of SAAB's performance history with the DoD would require accessing contract databases like FPDS or SAM.gov. This would involve examining past performance evaluations, any documented disputes or contract modifications, and the overall success rate on previous awards. Without this detailed history, it's difficult to definitively assess their track record beyond their general presence in the defense industry. The sole-source nature of this award might suggest a pre-existing relationship or a specific capability that the DoD deemed essential and unique to SAAB at the time.

How does the $22.1 million value compare to similar sole-source navigation system contracts awarded by the DoD during that period?

Benchmarking the $22.1 million value of this sole-source contract against similar procurements is challenging without access to a broader dataset of DoD contracts for navigation systems between 2005 and 2010, especially those awarded on a sole-source basis. Sole-source awards inherently lack direct price competition, making comparisons less straightforward. However, general market intelligence for specialized defense electronics and navigation systems suggests that such values can be typical for complex, high-technology components. A more robust analysis would involve identifying contracts with similar technical specifications, quantities, and durations, and then adjusting for inflation and specific technological advancements to establish a fair comparison. The Time and Materials (T&M) pricing structure also complicates direct value comparisons, as actual costs can fluctuate based on effort expended.

What are the primary risks associated with a sole-source Time and Materials contract for navigation systems?

The primary risks associated with a sole-source Time and Materials (T&M) contract for navigation systems are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing and reduced incentive for the contractor to optimize costs. The government does not benefit from the price discovery mechanism inherent in competitive bidding. Secondly, the T&M structure, while offering flexibility, carries a significant risk of cost overruns. Without strict oversight and well-defined task orders, the contractor could incur higher labor hours or material costs than anticipated, directly increasing the total contract value. This necessitates robust government oversight to monitor labor rates, hours, and material expenditures to ensure the government is receiving fair value and that costs remain within reasonable bounds.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data does not include the specific justification for awarding this contract on a sole-source basis. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or when there is a compelling urgency, or when the acquisition is for a unique product or service for which competition is not feasible. For specialized defense systems like navigation equipment, justifications might include proprietary technology, unique manufacturing capabilities held by a single entity, or a critical need that cannot be met through a lengthy competitive process. A formal Justification for Other Than Full and Open Competition (JOFOC) would have been required and should be available through agency records.

How does the $12,157 'br' value relate to the overall contract value and potential cost drivers?

The value '$12,157 br' is not a standard or readily interpretable metric within federal contract data without further context. It is possible that 'br' refers to a specific internal code, a type of fee, a benchmark, or a component cost that is not universally defined. Without a clear definition of what 'br' represents, it is impossible to accurately relate it to the overall contract value of $22.1 million or identify its role as a cost driver. Standard contract data elements typically include base award amounts, option values, modifications, and CLIN (Contract Line Item Number) details. Further clarification on the meaning of 'br' would be necessary for any meaningful analysis.

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: M6785405R2032

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 5717 ENTERPRISE PKWY, EAST SYRACUSE, NY, 22

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $31,732,161

Exercised Options: $22,186,604

Current Obligation: $22,186,604

Contract Characteristics

Cost or Pricing Data: NO

Timeline