DoD Awards $28M for P-3 Orion Parts, Raising Concerns Over Competition and Value

Contract Overview

Contract Amount: $28,002,649 ($28.0M)

Contractor: DRS C3 & Aviation Company

Awarding Agency: Department of Defense

Start Date: 2001-03-30

End Date: 2007-09-30

Contract Duration: 2,375 days

Daily Burn Rate: $11.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Defense

Official Description: 200108!000685!1700!AC522 !NAVAL AIR SYSTEMS COMMAND !N0001901C0161 !A!N!*!N! !20010330!20020330!076294834!076294834!061345351!N!DRS PRECISION ECHO INC !133 BAUER DRIVE !OAKLAND !NJ!07436!69084!085!06!SANTA CLARA !SANTA CLARA !CALIFORNIA!+000007592596!N!N!000000000000!5835!SOUND RECORDING & REPRODUCING EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !2APC!P-3 ORION !336413!*!*!3! ! ! !*!*!*!B!*!*!A! !D !N!A!1!001!N!1A!Z!Y!C! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

Location: OAKLAND, BERGEN County, NEW JERSEY, 07436, UNITED STATES OF AMERICA

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $28.0 million to DRS C3 & AVIATION COMPANY for work described as: 200108!000685!1700!AC522 !NAVAL AIR SYSTEMS COMMAND !N0001901C0161 !A!N!*!N! !20010330!20020330!076294834!076294834!061345351!N!DRS PRECISION ECHO INC !133 BAUER DRIVE !OAKLAND !NJ!07436!69084!085!06!SANTA CLARA !SANTA… Key points: 1. Contract awarded for specialized aircraft parts, indicating a niche market. 2. Limited competition raises questions about price discovery and potential overspending. 3. The long duration and fixed-price redetermination contract type introduce financial risks. 4. Sector focus on defense electronics and aircraft components.

Value Assessment

Rating: questionable

The contract value of $28,002,649 for aircraft parts appears high given the limited competition and contract type. Benchmarking against similar sole-source or limited-competition contracts for specialized defense components is crucial to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

Awarded under a sole-source justification, this limits competitive bidding and potentially impacts price discovery. The lack of competition may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of robust competition suggests taxpayers may not be receiving the best possible price for these critical aircraft components.

Public Impact

Taxpayers may be overpaying for essential P-3 Orion aircraft parts due to lack of competition. The long contract duration (2001-2007) could mean sustained higher costs. Dependence on a single source for critical defense components poses a supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Fixed Price Redetermination contract type
Long contract duration
Lack of clear justification for sole-source

Positive Signals

Supports critical defense platform (P-3 Orion)
Potential for specialized, high-quality components

Sector Analysis

This contract falls within the Defense sector, specifically for aircraft parts and electronics. Spending in this area is often characterized by specialized requirements and can be susceptible to sole-source awards due to unique technical needs.

Small Business Impact

No information is available regarding small business participation in this contract. The sole-source nature might limit opportunities for small businesses to compete.

Oversight & Accountability

The sole-source justification requires rigorous oversight to ensure fair pricing and prevent waste. The long duration necessitates continuous monitoring of performance and costs.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for inflated pricing due to lack of competition.
Cost overruns are a significant risk with FPR contracts.
Long contract duration may not reflect current market prices.
Limited transparency in the sole-source justification.
Dependency on a single supplier for critical defense parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.0 million to DRS C3 & AVIATION COMPANY. 200108!000685!1700!AC522 !NAVAL AIR SYSTEMS COMMAND !N0001901C0161 !A!N!*!N! !20010330!20020330!076294834!076294834!061345351!N!DRS PRECISION ECHO INC !133 BAUER DRIVE !OAKLAND !NJ!07436!69084!085!06!SANTA CLARA !SANTA CLARA !CALIFORNIA!+000007592596!N!N!000000000000!5835!SOUND RECORDING & REPRODUCING EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION !2APC!P-3 ORION !336413!*!*!3! ! ! !*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is DRS C3 & AVIATION COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.0 million.

What is the period of performance?

Start: 2001-03-30. End: 2007-09-30.

What is the justification for the sole-source award, and was it thoroughly vetted?

The provided data indicates a sole-source award, but the specific justification is not detailed. A thorough vetting process would involve exploring all potential sources, even for specialized components, and documenting why no other vendor could meet the requirements. Without this, the sole-source designation raises concerns about potential circumvention of competitive processes.

How does the fixed-price redetermination (FPR) contract type impact cost control and taxpayer risk?

FPR contracts allow for initial price estimates that are later adjusted based on actual costs incurred. This can shift significant cost risk to the government, especially if cost overruns occur. For taxpayers, this means the final price could be substantially higher than initially anticipated, making budget forecasting difficult and potentially leading to overpayment.

What is the long-term strategic value of securing these specific P-3 Orion components from a single source?

While sole-sourcing can ensure access to unique or proprietary technology, it creates long-term strategic risks. Dependence on one supplier can lead to price escalation, supply chain vulnerabilities, and reduced innovation. The government should continuously assess if alternative sources or domestic production capabilities can be developed to mitigate these risks over the lifespan of the P-3 Orion fleet.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION (A)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 133 BAUER DRIVE, OAKLAND, NJ, 07436

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline