DoD's $33M night vision contract with Harris Corp. lacked competition, raising value concerns

Contract Overview

Contract Amount: $33,075,416 ($33.1M)

Contractor: Harris Corporation

Awarding Agency: Department of Defense

Start Date: 2012-03-26

End Date: 2015-04-01

Contract Duration: 1,101 days

Daily Burn Rate: $30.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FIRM FIXED PRICE CONTRACT FOR PVS 14 COMMERCIAL NIGHT VISION TUBES

Place of Performance

Location: ROANOKE, ROANOKE County, VIRGINIA, 24019

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.1 million to HARRIS CORPORATION for work described as: FIRM FIXED PRICE CONTRACT FOR PVS 14 COMMERCIAL NIGHT VISION TUBES Key points: 1. The contract was awarded on a non-competitive basis, limiting price discovery. 2. The firm-fixed-price structure shifts some risk to the government. 3. The duration of the contract (over 3 years) suggests a need for sustained supply. 4. The specific product, PVS 14 commercial night vision tubes, is critical for military operations. 5. The award was made by the Defense Contract Management Agency, indicating a focus on defense procurement. 6. The lack of a stated small business set-aside suggests larger prime contractors were anticipated.

Value Assessment

Rating: questionable

Without competitive bids, it's difficult to benchmark the value for money. The firm-fixed-price (FFP) contract type, while providing cost certainty, can lead to higher prices if the contractor's costs are lower than anticipated. The absence of a stated contract value in the provided data makes a direct dollar comparison impossible, but the non-competitive nature is a significant red flag for potential overpayment compared to a fully competed scenario.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition scenario. This means only one bidder was solicited or considered. Such awards typically occur when a specific capability is unique to a single provider, or in urgent situations. The lack of multiple bidders means the government did not benefit from the price reductions and innovation that typically arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium for these night vision tubes due to the absence of competitive pressure to lower prices.

Public Impact

Military personnel requiring advanced night vision capabilities for operational effectiveness. The Department of Defense benefits from the acquisition of critical equipment for surveillance and combat. The contract supports the defense industrial base, specifically in the area of optical instrument manufacturing. Personnel in Virginia may be employed by Harris Corporation or its subcontractors working on this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially increases costs for taxpayers.
Firm-fixed-price contract can result in the government overpaying if contractor costs are lower than expected.
Lack of transparency regarding the specific reasons for sole-source award.
Contract duration of over three years may lock the government into a potentially suboptimal pricing structure.
No indication of small business participation, potentially excluding smaller innovative firms.

Positive Signals

Award to a known contractor (Harris Corporation) suggests a degree of confidence in their capability.
Firm-fixed-price contract provides budget certainty for the government.
The product (PVS 14 night vision tubes) is a critical defense asset.
Contract managed by the Defense Contract Management Agency, implying established oversight processes.

Sector Analysis

This contract falls within the Optical Instrument and Lens Manufacturing sector, a niche but critical part of the defense industrial base. This sector produces specialized equipment for surveillance, targeting, and navigation. Spending in this area is often driven by defense modernization efforts and operational readiness requirements. Comparable spending benchmarks are difficult to ascertain without more specific product details and market analysis, but night vision technology is a high-value, specialized area.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was either aimed at large prime contractors or that the nature of the requirement did not lend itself to a small business set-aside. There is no information provided on subcontracting plans, so the impact on the small business ecosystem is unknown, but it is unlikely to have directly benefited from a set-aside provision.

Oversight & Accountability

The contract was awarded by the Department of Defense, managed by the Defense Contract Management Agency (DCMA). DCMA is responsible for ensuring contractors meet their contractual obligations. Oversight mechanisms would typically include contract surveillance, performance monitoring, and financial audits. Transparency is limited by the sole-source nature of the award, but the contract details and performance should be available through federal procurement databases. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse.

Related Government Programs

Night Vision Systems
Defense Procurement
Optical Equipment Manufacturing
Military Technology Acquisition
Department of Defense Contracts

Risk Flags

Non-competitive award
Potential for overpricing due to lack of competition
Limited transparency on justification for sole-source
Firm-fixed-price risk allocation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.1 million to HARRIS CORPORATION. FIRM FIXED PRICE CONTRACT FOR PVS 14 COMMERCIAL NIGHT VISION TUBES

Who is the contractor on this award?

The obligated recipient is HARRIS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.1 million.

What is the period of performance?

Start: 2012-03-26. End: 2015-04-01.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' which is the standard indicator for a sole-source or limited competition award. The specific justification would typically be documented by the procuring agency (Department of Defense, managed by DCMA in this case) in accordance with Federal Acquisition Regulation (FAR) Part 6. Common justifications include that only one responsible source can provide the required supplies or services, or that the agency's need is so compelling and unexpected that the delay occasioned by the competitive solicitation would be against the public interest. Without further documentation from the agency, the precise reason remains unspecified in this dataset.

How does the firm-fixed-price (FFP) structure impact the value for money in this sole-source contract?

A Firm-Fixed-Price (FFP) contract establishes a price that is not subject to any adjustment based on the contractor's cost experience in performing the contract. While FFP provides cost certainty for the government, in a sole-source situation, it can lead to a higher price than might be achieved through competition. The contractor bears the risk of cost overruns, but without competitive pressure, they may not have an incentive to minimize costs as aggressively. This means the government is obligated to pay the agreed-upon price regardless of the contractor's actual expenses, potentially resulting in less favorable value for money compared to a competed contract where price is driven down by market forces.

What is the typical market price or benchmark for PVS 14 commercial night vision tubes?

Determining a precise market benchmark for PVS 14 commercial night vision tubes is challenging without specific configuration details, volume discounts, and current market conditions. However, commercial variants of high-quality night vision devices like the PVS-14 can range from several thousand dollars to upwards of $10,000 or more per unit, depending on the generation of image intensifier tube, features, and manufacturer. Given the $33 million contract value over approximately three years, this suggests a significant quantity was procured. A sole-source award makes it difficult to ascertain if the negotiated price aligns with prevailing market rates for comparable systems.

What is Harris Corporation's track record with similar defense contracts?

Harris Corporation (now L3Harris Technologies) is a major defense contractor with extensive experience in electronic systems, including electro-optics and night vision technology. They have a long history of supplying the U.S. military and allied nations with various defense equipment. While specific details of their performance on this particular PVS 14 contract are not provided, their general track record suggests they possess the technical capability and manufacturing capacity to fulfill such requirements. However, past performance does not negate the concerns associated with a sole-source award regarding price and competition.

What are the potential risks associated with a long-duration, sole-source contract for critical equipment?

A long-duration (over 3 years) sole-source contract for critical equipment like night vision tubes presents several risks. Firstly, the government is locked into a single supplier, limiting flexibility if better technology emerges or if the supplier's performance degrades. Secondly, without competition, there's a reduced incentive for the contractor to innovate or offer cost reductions over the contract's life. Thirdly, the government may be vulnerable to price increases if the contractor faces unexpected cost escalations, as the FFP structure offers limited recourse. Finally, reliance on a single source can create supply chain vulnerabilities if the contractor experiences production issues.

How does this contract fit into the broader landscape of defense spending on night vision technology?

This contract represents a specific procurement within the larger defense budget allocated to night vision and other electro-optical/infrared (EO/IR) systems. The Department of Defense consistently invests heavily in these technologies to maintain battlefield superiority in low-light and adverse weather conditions. Spending on systems like the PVS-14 is crucial for individual soldier effectiveness in reconnaissance, surveillance, and targeting. While $33 million is a significant sum, it is one component of a much larger overall investment in advanced military optics and sensor technology across various branches of the armed forces.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Exelis Inc. (UEI: 969316046)

Address: 7635 PLANTATION RD, ROANOKE, VA, 06

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

Financial Breakdown

Contract Ceiling: $33,075,416

Exercised Options: $33,075,416

Current Obligation: $33,075,416

Contract Characteristics

Cost or Pricing Data: NO

Timeline