DoD Awards $277M Firm-Fixed-Price Contract to SAAB, Inc. for Electrical Equipment

Contract Overview

Contract Amount: $276,870,938 ($276.9M)

Contractor: Saab, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-06-17

End Date: 2028-02-28

Contract Duration: 2,447 days

Daily Burn Rate: $113.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS IS A FOLLOW-ON PRODUCTION AGREEMENT AUTHORIZED PURSUANT TO 10 U.S.C. 2371B(F) WHERE COMPETITIVE PROCEDURES WERE USED. THIS IS AN UNDEFINITIZED CONTRACT ACTION. THE CONTRACT WILL BE DEFINITIZED TO FIRM-FIXED-PRICE CLINS.

Plain-Language Summary

Department of Defense obligated $276.9 million to SAAB, INC. for work described as: THIS IS A FOLLOW-ON PRODUCTION AGREEMENT AUTHORIZED PURSUANT TO 10 U.S.C. 2371B(F) WHERE COMPETITIVE PROCEDURES WERE USED. THIS IS AN UNDEFINITIZED CONTRACT ACTION. THE CONTRACT WILL BE DEFINITIZED TO FIRM-FIXED-PRICE CLINS. Key points: 1. Contract awarded to SAAB, Inc. for electrical equipment manufacturing. 2. Follow-on production agreement under 10 U.S.C. 2371B(f), utilizing competitive procedures. 3. Undefinitized contract action to be definitized to firm-fixed-price CLINs. 4. Significant taxpayer investment of $277 million over approximately 6.8 years.

Value Assessment

Rating: good

The contract is a firm-fixed-price type, which generally provides good value by capping costs for the government. The undefinitized nature requires prompt definitization to ensure cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

While the data states competitive procedures were used, the 'CT' field indicates 'NOT COMPETED'. This suggests a potential discrepancy or a specific justification for limited competition under 10 U.S.C. 2371B(f). Further clarification is needed on the competitive process.

Taxpayer Impact: The firm-fixed-price structure aims to protect taxpayers from cost overruns, but the initial undefinitized nature warrants close monitoring to ensure the final price is fair and reasonable.

Public Impact

Ensures continued supply of critical electrical equipment for the Department of the Navy. Supports advanced manufacturing capabilities within the defense industrial base. Potential for technological advancements in electrical component manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential discrepancy between stated competitive procedures and 'NOT COMPETED' field.
Undefinitized contract action requires timely definitization to control costs.
Lack of small business participation noted.

Positive Signals

Firm-fixed-price contract type offers cost certainty.
Follow-on production agreement suggests successful prior performance.
Utilizes a specific statutory authority for advanced technology development/production.

Sector Analysis

This contract falls under the 'All Other Miscellaneous Electrical Equipment and Component Manufacturing' sector. Spending in this sector is crucial for defense readiness, supporting a wide range of military platforms and systems. Benchmarks are difficult to ascertain without specific component details.

Small Business Impact

The contract data indicates that small business participation was not a factor in this award ('sb': false). This suggests the prime contractor is likely a large business, and opportunities for small businesses may be limited to subcontracting roles.

Oversight & Accountability

The undefinitized contract action (UCA) requires robust oversight to ensure timely definitization and prevent potential cost increases. The Department of Defense's contracting officers must diligently manage this contract to safeguard taxpayer funds.

Related Government Programs

All Other Miscellaneous Electrical Equipment and Component Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential ambiguity in competition status.
Risk associated with undefinitized contract action.
No stated small business participation.
Long contract duration (approx. 6.8 years).

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $276.9 million to SAAB, INC.. THIS IS A FOLLOW-ON PRODUCTION AGREEMENT AUTHORIZED PURSUANT TO 10 U.S.C. 2371B(F) WHERE COMPETITIVE PROCEDURES WERE USED. THIS IS AN UNDEFINITIZED CONTRACT ACTION. THE CONTRACT WILL BE DEFINITIZED TO FIRM-FIXED-PRICE CLINS.

Who is the contractor on this award?

The obligated recipient is SAAB, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $276.9 million.

What is the period of performance?

Start: 2021-06-17. End: 2028-02-28.

What specific competitive procedures were employed if the contract is marked as 'NOT COMPETED'?

The data indicates 'competitive procedures were used' under 10 U.S.C. 2371B(f), yet the 'CT' field states 'NOT COMPETED'. This suggests a potential nuance in the statutory authority, possibly allowing for a limited competition or a sole-source justification that was still subject to some form of competitive analysis or prior competition. Further details on the specific solicitation and evaluation process are needed for clarity.

What are the primary risks associated with the undefinitized contract action (UCA)?

The primary risk of a UCA is the potential for cost growth if the contract is not definitized promptly and at a fair and reasonable price. Without a definitized contract, the government's financial commitment is not fully established, creating uncertainty and potential for unfavorable terms during negotiation. Close monitoring and timely negotiation are critical to mitigate this risk.

How does the firm-fixed-price (FFP) structure contribute to the effectiveness of this contract?

The FFP structure is highly effective in managing costs for the government, as it shifts the risk of cost overruns to the contractor. This provides budget certainty and incentivizes the contractor to control expenses efficiently. For this large-value contract, the FFP nature is crucial for ensuring taxpayer funds are used judiciously over the contract's duration.

Industry Classification

NAICS: Manufacturing › Other Electrical Equipment and Component Manufacturing › All Other Miscellaneous Electrical Equipment and Component Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

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: 2602 CHALLENGER TECH, ORLANDO, FL, 32826

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

Financial Breakdown

Contract Ceiling: $336,175,438

Exercised Options: $317,372,316

Current Obligation: $276,870,938

Actual Outlays: $33,130,678

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline