DoD's $108M contract for MODI II systems awarded to W S DARLEY & CO, with 29 bids received

Contract Overview

Contract Amount: $108,237,849 ($108.2M)

Contractor: W S Darley & CO

Awarding Agency: Department of Defense

Start Date: 2023-03-22

End Date: 2025-06-18

Contract Duration: 819 days

Daily Burn Rate: $132.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 29

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 4560372610!MODI II SYSTEM

Place of Performance

Location: ITASCA, DUPAGE County, ILLINOIS, 60143

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $108.2 million to W S DARLEY & CO for work described as: 4560372610!MODI II SYSTEM Key points: 1. The contract value of $108M for MODI II systems suggests a significant investment in specialized equipment. 2. With 29 bids received, the competition appears robust, potentially driving favorable pricing. 3. The 'Service Establishment Equipment and Supplies Merchant Wholesalers' NAICS code indicates a focus on procurement of essential operational goods. 4. The contract duration of 819 days points to a medium-term need for these systems. 5. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a structured procurement process. 6. The award to W S DARLEY & CO, a known entity in the sector, provides some level of performance predictability.

Value Assessment

Rating: good

The contract value of $108M for MODI II systems is substantial. Benchmarking against similar specialized equipment procurements would be necessary for a precise value-for-money assessment. However, the high number of bidders (29) suggests that the pricing is likely competitive. The firm fixed-price contract type also helps to control costs for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', indicating that multiple sources were solicited. The receipt of 29 bids is a strong indicator of healthy competition. This level of competition generally leads to better price discovery and ensures that the government receives offers from a wide range of qualified vendors.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely resulted in more competitive pricing and a better overall value for the MODI II systems.

Public Impact

The primary beneficiaries are likely military personnel who will utilize the MODI II systems in their operations. The services delivered involve the provision of specialized equipment essential for defense logistics or operational readiness. The geographic impact is likely concentrated within Department of Defense facilities or deployment zones. Workforce implications may include training for personnel on the new systems and potential support roles for maintenance and operation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if MODI II systems require proprietary maintenance or consumables.
Dependence on a single contractor for specialized equipment could pose supply chain risks.
Ensuring interoperability with existing military systems is crucial for effective deployment.

Positive Signals

The robust competition suggests a healthy market for these types of systems.
The firm fixed-price contract type provides cost certainty for the government.
The award to an established contractor may indicate a reliable supply chain and product quality.

Sector Analysis

The procurement falls within the defense sector, specifically related to equipment and supplies for service establishments. The market for such specialized military equipment can be niche, with a limited number of manufacturers capable of meeting stringent defense requirements. The $108M value positions this as a significant contract within its sub-sector, likely impacting market dynamics for MODI II system providers.

Small Business Impact

The data indicates that small business participation was not a primary set-aside consideration for this contract (ss: false, sb: false). While the prime contractor is W S DARLEY & CO, further analysis would be needed to determine if they intend to subcontract with small businesses. The absence of specific set-aside provisions suggests that the focus was on securing the best overall offer from the competitive field.

Oversight & Accountability

The contract is subject to standard Department of Defense oversight mechanisms. Accountability is managed through the terms of the firm fixed-price contract and delivery schedules. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not be publicly detailed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Procurement
Military Equipment Procurement
Service Establishment Supplies
MODI Systems

Risk Flags

Potential for supply chain disruption if vendor faces production issues.
Risk of quality control issues if vendor capacity is strained.
Lack of ongoing competitive pressure for innovation or future pricing.
Dependence on a single vendor for specialized equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $108.2 million to W S DARLEY & CO. 4560372610!MODI II SYSTEM

Who is the contractor on this award?

The obligated recipient is W S DARLEY & CO.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $108.2 million.

What is the period of performance?

Start: 2023-03-22. End: 2025-06-18.

What is the historical spending pattern for MODI II systems or similar equipment by the Department of Defense?

Analyzing historical spending on MODI II systems or comparable equipment by the Department of Defense is crucial for understanding long-term investment trends and identifying potential cost escalations or efficiencies. Without specific historical data for MODI II, we can look at broader categories. For instance, the Defense Logistics Agency (DLA) manages a vast array of equipment and supplies, with annual spending often in the billions. Contracts for specialized systems, depending on their complexity and quantity, can range from tens of millions to hundreds of millions of dollars. A review of past DLA solicitations and awards for similar 'Service Establishment Equipment and Supplies' (NAICS 423850) would reveal if this $108M award represents a typical investment, an increase, or a decrease compared to previous procurements of comparable systems. Understanding these patterns helps in assessing whether current spending aligns with historical needs and budget allocations, and whether there are any emerging trends in demand or pricing for such critical equipment.

How does the per-unit cost of the MODI II system compare to market rates or similar government contracts?

Determining the per-unit cost benchmark for the MODI II system is essential for evaluating value for money. This requires dividing the total contract value ($108,023,784.05) by the number of units procured. However, the provided data does not specify the quantity of MODI II systems being purchased under this contract. If, for example, 100 systems were procured, the per-unit cost would be approximately $1.08 million. This figure then needs to be compared against industry benchmarks for similar specialized military equipment, or against previous government contracts for the same or comparable systems. A high number of bidders (29) suggests competitive pricing, which should ideally drive the per-unit cost down. If the calculated per-unit cost is significantly higher than comparable procurements or market rates, it would raise concerns about pricing efficiency, even with robust competition.

What is the track record of W S DARLEY & CO in fulfilling government contracts, particularly for defense equipment?

W S DARLEY & CO's track record in fulfilling government contracts, especially for defense equipment, is a key indicator of their reliability and capability. As a contractor with the Department of Defense, their past performance on similar contracts would have been evaluated during the procurement process. A review of their contract history would reveal their success rate in meeting delivery schedules, quality standards, and budget constraints. Positive past performance typically involves timely deliveries, high-quality products, and minimal contract disputes or modifications. Conversely, a history of performance issues, such as delays, defects, or cost overruns, could signal potential risks for this current contract. Given the substantial value of this award, the government likely conducted a thorough review of W S DARLEY & CO's performance history to ensure they are capable of meeting the requirements for the MODI II systems.

What are the specific risks associated with the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (FOUCAES) method, while aiming for broad competition, introduces specific considerations. This method allows for full and open competition but may exclude certain sources based on pre-defined criteria, often related to security, specialized capabilities, or prior development efforts. The primary risk is that the exclusion criteria, if not carefully defined and justified, could inadvertently limit the pool of potential bidders more than necessary, potentially reducing the overall competitiveness or leading to a less optimal solution. Another risk is ensuring that the exclusion criteria are transparent and fair to all potential offerors. While FOUCAES aims to leverage competition, the 'exclusion' aspect requires careful management to prevent unintended market distortions or the overlooking of innovative solutions from excluded entities. The government must clearly articulate the rationale for any exclusions to maintain fairness and maximize competitive benefits.

How does the $108M contract for MODI II systems fit into the broader strategic objectives of the Defense Logistics Agency?

The $108 million contract for MODI II systems awarded to W S DARLEY & CO is likely a component of the Defense Logistics Agency's (DLA) broader mission to provide efficient and effective logistics support to the U.S. Armed Forces. The DLA is responsible for a wide range of supply chain management functions, including the procurement, storage, and distribution of essential equipment, fuel, and services. Contracts for specialized systems like the MODI II are critical for ensuring that military branches have the necessary tools to operate. This specific award suggests a strategic focus on modernizing or equipping forces with advanced capabilities. The DLA's strategic objectives often include enhancing readiness, improving operational effectiveness, and ensuring cost efficiency in logistics. This contract, by providing potentially advanced MODI II systems, directly supports these objectives by equipping personnel with reliable and potentially cutting-edge technology, thereby bolstering overall military readiness and operational capacity.

What are the potential performance implications of awarding a large contract to a single vendor, even with prior competition?

Awarding a large contract, such as this $108 million MODI II system contract, to a single vendor, W S DARLEY & CO, carries inherent performance implications. While the competition phase (29 bids) suggests a robust initial selection process, the subsequent reliance on one vendor for delivery and potentially support can create dependencies. Risks include potential supply chain disruptions if the vendor faces production issues, quality control challenges if demand strains their capacity, or a lack of ongoing competitive pressure to innovate or maintain optimal pricing for future needs or sustainment. However, a single vendor can also lead to streamlined communication, consistent product quality, and potentially more efficient integration and support, especially for complex systems requiring specialized knowledge. The government's oversight, contract management, and performance monitoring become critical to mitigate risks and ensure the vendor consistently meets or exceeds performance expectations throughout the contract duration.

Industry Classification

NAICS: Wholesale Trade › Machinery, Equipment, and Supplies Merchant Wholesalers › Service Establishment Equipment and Supplies Merchant Wholesalers

Product/Service Code: FIRE/RESCUE/SAFETY; ENVIRO PROTECT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 29

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 325 SPRING LAKE DR, ITASCA, IL, 60143

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $108,237,849

Exercised Options: $108,237,849

Current Obligation: $108,237,849

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE8EJ21D1025

IDV Type: IDC

Timeline