DoD awards $380M contract for navigation systems, with 2 bidders competing

Contract Overview

Contract Amount: $379,533,473 ($379.5M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2004-04-28

End Date: 2010-04-30

Contract Duration: 2,193 days

Daily Burn Rate: $173.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $379.5 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: Key points: 1. Contract value of $380M represents significant investment in defense navigation technology. 2. Competition dynamics indicate a moderately contested award, potentially impacting price. 3. Risk indicators include contract duration and fixed-price structure, requiring careful performance monitoring. 4. Performance context suggests a long-term need for these critical navigation systems. 5. Sector positioning places this contract within the broader defense electronics and systems manufacturing industry.

Value Assessment

Rating: good

The contract's value of $380M for navigation systems appears substantial. Benchmarking against similar contracts for advanced defense electronics is necessary for a precise value-for-money assessment. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be favorable for the government if managed effectively. However, without specific performance metrics or cost breakdowns, a definitive assessment of 'excellent' value is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with two bidders participating. While two bidders suggest some level of competition, it is on the lower end for a contract of this magnitude. This limited competition could potentially lead to less aggressive pricing than if more firms had been involved. The government likely sought proposals from a range of qualified sources, but the final pool was constrained.

Taxpayer Impact: The full and open competition, despite having only two bidders, aims to ensure fair pricing. However, taxpayers may not have received the absolute lowest price achievable due to the limited number of competing entities.

Public Impact

The Department of Defense is the primary beneficiary, receiving advanced navigation systems. Services delivered include the manufacturing and supply of critical navigation and guidance instruments. Geographic impact is primarily within defense operations, potentially supporting global deployments. Workforce implications include jobs in specialized manufacturing, engineering, and technical support roles within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2004-2010) could lead to scope creep or evolving technological obsolescence.
Firm fixed-price contracts can sometimes incentivize contractors to cut corners on quality if not rigorously overseen.
Limited competition (2 bidders) might have resulted in a higher price than a more robust bidding process.

Positive Signals

Awarded under full and open competition, indicating an effort to maximize the bidder pool.
Firm fixed-price contract shifts cost overrun risk to the contractor.
The contract supports critical defense capabilities, ensuring national security.

Sector Analysis

This contract falls within the defense electronics and systems manufacturing sector, specifically focusing on navigation, guidance, and control equipment. This is a highly specialized area within the broader aerospace and defense industry, characterized by high R&D costs, stringent quality requirements, and long product lifecycles. Comparable spending benchmarks would involve other large-scale procurements of advanced avionics and sensor systems for military applications.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). This suggests the contract was awarded to a large business entity. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in supporting critical defense needs.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms and performance standards. The firm fixed-price nature implies a focus on delivery and acceptance rather than detailed cost auditing. Transparency is generally maintained through contract award databases, but specific performance reviews and IG oversight details are not provided in this summary.

Related Government Programs

Defense Navigation Systems Procurement
Military Avionics and Electronics
Aerospace and Defense Manufacturing
DoD Sensor Technology Contracts

Risk Flags

Limited Competition
Potential for Quality Compromise in FFP
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $379.5 million to DRS NETWORK & IMAGING SYSTEMS LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is DRS NETWORK & IMAGING SYSTEMS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $379.5 million.

What is the period of performance?

Start: 2004-04-28. End: 2010-04-30.

What is the historical spending trend for similar navigation systems by the Department of Defense?

Analyzing historical spending on similar navigation systems by the Department of Defense requires access to detailed procurement data over multiple fiscal years. Generally, the DoD invests significantly in navigation technologies due to their critical role in military operations, encompassing everything from aircraft and ship guidance to troop deployment. Spending can fluctuate based on technological advancements, geopolitical needs, and specific platform upgrades. Contracts for these systems often span several years and can range from tens to hundreds of millions of dollars, reflecting the complexity and high-reliability requirements. Without specific data points for comparable contracts, it's difficult to provide precise figures, but the sector consistently represents a substantial portion of the defense budget.

How does the per-unit cost of these navigation systems compare to industry benchmarks?

Determining the per-unit cost benchmark for these navigation systems is challenging without specific unit counts and detailed cost breakdowns from the contract award. The provided data focuses on the total contract value ($380M) and the contract type (firm fixed price), but not the quantity or specific model of the systems procured. Navigation systems for military applications can vary widely in complexity and cost, from basic GPS receivers to highly sophisticated inertial navigation units integrated into advanced platforms. Industry benchmarks are often proprietary or require deep market analysis. Generally, defense-specific, high-reliability components command a premium over commercial equivalents due to rigorous testing, certification, and specialized features. A thorough analysis would necessitate comparing the system's specifications and performance against similar offerings from other defense contractors.

What is the track record of DRS Network & Imaging Systems LLC in delivering similar defense contracts?

DRS Network & Imaging Systems LLC, a subsidiary of Leonardo DRS, has a significant track record in delivering a wide array of defense electronics, including sensor systems, communication equipment, and electro-optical/infrared solutions. Their involvement in navigation and guidance systems is consistent with their broader portfolio. Historical data indicates they have secured numerous contracts with the Department of Defense and other government agencies for complex systems. Performance on these contracts would need to be assessed on a case-by-case basis, looking at factors like on-time delivery, adherence to specifications, and any past performance issues or commendations. Their established presence suggests a capability to handle large, complex defense procurements like the one detailed.

What are the potential risks associated with the firm fixed-price contract type for this navigation system procurement?

The primary risk associated with a firm fixed-price (FFP) contract for navigation systems is the potential for the contractor to compromise quality or performance to maintain profitability, especially if unforeseen cost increases arise during the contract period. While FFP shifts cost overrun risk to the contractor, it places a greater burden on the government to meticulously define all requirements upfront. If the government's specifications are incomplete or ambiguous, the contractor may deliver a system that meets the letter but not the spirit of the contract, or disputes may arise over scope changes. Additionally, if the market price for components or labor increases significantly beyond the contractor's projections, they might face financial strain, potentially impacting their ability or willingness to invest in necessary upgrades or robust quality control throughout the contract's duration.

How does the competition level (2 bidders) impact the government's ability to secure favorable pricing?

A competition level with only two bidders for a contract valued at $380 million suggests a moderately competitive environment. While competition is generally beneficial for price discovery, having only two offers means the government has limited leverage compared to a scenario with multiple bidders. The government's ability to secure favorable pricing depends heavily on the specific capabilities and cost structures of these two firms, as well as the thoroughness of the government's cost realism analysis. If both bidders are highly capable and have similar cost structures, the pricing might be relatively competitive. However, if one bidder has a significant advantage in technology, efficiency, or market position, the other bidder might be less inclined to offer aggressive pricing, potentially leading to a higher overall cost for the taxpayer than might be achieved with broader competition.

What is the expected lifespan and obsolescence risk for the navigation systems procured under this contract?

The contract was awarded in 2004 and expired in 2010, indicating the systems procured were likely designed and manufactured within that timeframe. The expected lifespan and obsolescence risk for these navigation systems depend heavily on the specific technology employed and the rate of advancement in the field. Military-grade navigation systems often have longer lifecycles than commercial counterparts, designed for durability and upgradeability. However, rapid technological evolution, particularly in areas like digital processing, satellite communication, and sensor fusion, can lead to obsolescence even within a decade. The DoD likely factored in upgrade paths or planned for eventual replacement when awarding such a long-term contract. Assessing the current obsolescence risk would require knowing the specific system's capabilities and comparing them to the latest available technologies.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 100 N BABCOCK ST, MELBOURNE, FL, 32935

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline