DoD Awards $82.6M for Vehicle Intercom Systems, Competition Method Impacts Price Discovery

Contract Overview

Contract Amount: $82,637,069 ($82.6M)

Contractor: Atlantic Diving Supply, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-05-22

End Date: 2025-04-18

Contract Duration: 697 days

Daily Burn Rate: $118.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NSN: 5965-01-453-2687, PICVC HEADSET, MEDIUM NSN: 5965-01-453-2684, PICVC HEADSET, LARGE SYSTEM: VEHICLE INTERCOM SYSTEM (VIS)

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23452

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $82.6 million to ATLANTIC DIVING SUPPLY, INC. for work described as: NSN: 5965-01-453-2687, PICVC HEADSET, MEDIUM NSN: 5965-01-453-2684, PICVC HEADSET, LARGE SYSTEM: VEHICLE INTERCOM SYSTEM (VIS) Key points: 1. The Department of Defense awarded a significant contract for Vehicle Intercom Systems. 2. Atlantic Diving Supply, Inc. is the sole awardee for this contract. 3. The contract type is Firm Fixed Price, indicating price certainty for the government. 4. The North American Industry Classification System (NAICS) code 334419 suggests a focus on electronic component manufacturing.

Value Assessment

Rating: good

The total award amount of $82.6 million for 697 units suggests a per-unit cost of approximately $118,561. This price appears high when compared to similar intercom systems, warranting further investigation into the specific features and complexity of these PICVC headsets.

Cost Per Unit: $118,561

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the high per-unit cost suggests that either the competition was not as robust as anticipated, or the specific requirements of the system command a premium price.

Taxpayer Impact: While competition was sought, the high unit price may result in a less than optimal return on investment for taxpayers if comparable systems are available at lower costs.

Public Impact

Military personnel will benefit from enhanced communication capabilities within vehicles. The contract supports the defense industrial base, specifically in electronic component manufacturing. The long-term sustainment of these systems will be crucial for operational readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost
Potential for price escalation in future orders
Limited visibility into specific system capabilities driving cost

Positive Signals

Awarded under full and open competition
Firm Fixed Price contract type
Clear delivery timeline established

Sector Analysis

This contract falls under the Defense sector, specifically related to electronic components and communication systems. Spending benchmarks for similar military communication equipment can vary widely based on technological sophistication and quantity, but the reported unit price warrants comparison.

Small Business Impact

The awardee, Atlantic Diving Supply, Inc., is not identified as a small business. This contract does not appear to have specific set-asides for small businesses, indicating a focus on larger prime contractors for this requirement.

Oversight & Accountability

The Defense Logistics Agency (DLA) is responsible for this award. Oversight will be critical to ensure timely delivery, adherence to specifications, and to monitor any potential cost overruns or performance issues throughout the contract duration.

Related Government Programs

Other Electronic Component Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

High per-unit cost
Potential for sole-source follow-on orders if competition is limited
Lack of small business participation
Complexity of system integration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $82.6 million to ATLANTIC DIVING SUPPLY, INC.. NSN: 5965-01-453-2687, PICVC HEADSET, MEDIUM NSN: 5965-01-453-2684, PICVC HEADSET, LARGE SYSTEM: VEHICLE INTERCOM SYSTEM (VIS)

Who is the contractor on this award?

The obligated recipient is ATLANTIC DIVING SUPPLY, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $82.6 million.

What is the period of performance?

Start: 2023-05-22. End: 2025-04-18.

What specific technological advancements or unique features justify the high per-unit cost of the PICVC Headset compared to other vehicle intercom systems?

The high per-unit cost of $118,561 for the PICVC Headset warrants a detailed examination of its technical specifications. Factors such as advanced noise cancellation, integration with multiple communication platforms, ruggedization for extreme environments, and specialized encryption capabilities could contribute to a higher price point. Without specific documentation on these features, it is difficult to definitively justify the cost relative to market alternatives.

Given the full and open competition, what factors might have limited the number of bids or resulted in a higher-than-expected winning bid price?

Several factors could contribute to a higher winning bid despite full and open competition. These might include stringent technical requirements that only a few companies can meet, a limited number of qualified bidders in the market, the complexity of the system integration, or the government's specific performance expectations. Additionally, market conditions, material costs, and the contractor's assessment of risk could influence their pricing strategy.

How will the effectiveness of the Vehicle Intercom System be measured to ensure it meets the operational needs of the Department of Defense?

The effectiveness of the Vehicle Intercom System will likely be measured through a combination of technical performance testing, user acceptance trials, and operational readiness assessments. Key performance indicators may include voice clarity, system reliability in various environmental conditions, ease of use, and successful integration with existing vehicle platforms. Post-delivery inspections and feedback from end-users will be crucial for validating the system's effectiveness.

Industry Classification

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

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 621 LYNNHAVEN PKWY, VIRGINIA BEACH, VA, 23452

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

Financial Breakdown

Contract Ceiling: $82,637,069

Exercised Options: $82,637,069

Current Obligation: $82,637,069

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPRBL123D0010

IDV Type: IDC

Timeline