DoD awards $38M for C-UAS hardware, raising questions about competition and value

Contract Overview

Contract Amount: $37,955,286 ($38.0M)

Contractor: SRC Inc

Awarding Agency: Department of Defense

Start Date: 2022-12-06

End Date: 2026-03-31

Contract Duration: 1,211 days

Daily Burn Rate: $31.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS REQUIREMENT IS TO PROVIDE A NEW TASK ORDER FOR THE PURCHASE OF C-UAS FS-LIDS HARDWARE SYSTEMS IN SUPPORT OF THE C-UAS FIXED SITE LOW, SLOW, SMALL UNMANNED AERIAL VEHICLE INTEGRATED DEFEAT SYSTEM (FS-LIDS) CONTRACT W31P4Q-20-D-0032.

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13212

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $38.0 million to SRC INC for work described as: THIS REQUIREMENT IS TO PROVIDE A NEW TASK ORDER FOR THE PURCHASE OF C-UAS FS-LIDS HARDWARE SYSTEMS IN SUPPORT OF THE C-UAS FIXED SITE LOW, SLOW, SMALL UNMANNED AERIAL VEHICLE INTEGRATED DEFEAT SYSTEM (FS-LIDS) CONTRACT W31P4Q-20-D-0032. Key points: 1. Contract awarded to SRC Inc. for Counter-Unmanned Aircraft Systems (C-UAS) hardware. 2. Significant investment in C-UAS technology highlights evolving defense needs. 3. Sole-source award raises concerns about price discovery and potential overpayment. 4. Long contract duration (over 3 years) suggests a sustained need for these systems. 5. Focus on fixed-site, low, slow, small UAS defeat indicates a specific threat mitigation strategy. 6. Lack of competition may limit opportunities for innovation and cost savings from other vendors.

Value Assessment

Rating: questionable

The contract value of $37.96 million for C-UAS hardware systems is substantial. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively assess value for money. The sole-source nature of this award prevents benchmarking against other potential providers, making it challenging to determine if the pricing is competitive or reflects market rates. Further analysis of the specific hardware components and their pricing relative to industry standards would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, SRC Inc., was solicited. This approach bypasses the competitive bidding process, which typically involves multiple companies submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less price competition and may not result in the best possible pricing for the government.

Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective solution available. Without competing bids, there is a risk that the awarded price is higher than it would have been in a competitive environment.

Public Impact

The Department of the Army benefits from acquiring critical C-UAS hardware to counter aerial threats. This contract supports the development and deployment of systems designed to detect and defeat low, slow, and small unmanned aerial vehicles. The geographic impact is primarily within the United States, specifically New York where SRC Inc. is located, but the deployed systems will enhance national security. The contract supports jobs within SRC Inc. and potentially its supply chain, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification makes it difficult to assess necessity.
Long-term contract duration without clear performance metrics could indicate potential for cost overruns if not managed closely.
The specific nature of C-UAS technology might involve proprietary elements, but this should be rigorously evaluated to ensure it truly necessitates a sole-source approach.

Positive Signals

Addresses a critical and evolving national security threat (unmanned aerial vehicles).
Award to a known entity (SRC Inc.) may imply existing familiarity and potentially faster integration.
Firm Fixed Price contract type provides cost certainty for the government, assuming the scope is well-defined.

Sector Analysis

The Counter-Unmanned Aircraft Systems (C-UAS) market is a rapidly growing segment within the defense industry, driven by the increasing proliferation of drone technology. This contract for C-UAS hardware systems fits within the broader 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. The total addressable market for C-UAS solutions is expanding significantly, with governments worldwide investing heavily in countermeasures. Benchmarking this specific contract's value is challenging due to the specialized nature of the technology and the sole-source award, but it represents a significant investment in a high-priority defense capability.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'sb': false. Furthermore, the 'co' field lists SRC Inc., a known defense contractor, and there is no explicit mention of subcontracting plans for small businesses within the provided data. This suggests that the primary contract value will likely flow to the prime contractor, with limited direct benefit or subcontracting opportunities for small businesses unless SRC Inc. voluntarily engages them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a Task Order under a larger contract (W31P4Q-20-D-0032), existing oversight mechanisms for that IDIQ contract would likely apply. Transparency regarding the sole-source justification and performance monitoring would be key areas for oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Counter-UAS Systems
Department of Defense Procurement
Army Aviation and Missile Command Contracts
Fixed-Site Defense Systems
Unmanned Aerial Vehicle Countermeasures

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-competitive pricing.
Limited transparency on specific hardware components and cost breakdown.
Long contract duration requires diligent performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.0 million to SRC INC. THIS REQUIREMENT IS TO PROVIDE A NEW TASK ORDER FOR THE PURCHASE OF C-UAS FS-LIDS HARDWARE SYSTEMS IN SUPPORT OF THE C-UAS FIXED SITE LOW, SLOW, SMALL UNMANNED AERIAL VEHICLE INTEGRATED DEFEAT SYSTEM (FS-LIDS) CONTRACT W31P4Q-20-D-0032.

Who is the contractor on this award?

The obligated recipient is SRC INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $38.0 million.

What is the period of performance?

Start: 2022-12-06. End: 2026-03-31.

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

The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically requires a justification, such as the existence of only one responsible source capable of providing the required supplies or services, or that a compelling urgency precludes the use of a competitive procedure. Without access to the specific justification document (e.g., a Justification and Approval - J&A), it is impossible to determine the precise reasons. However, common justifications in defense procurement include unique technical capabilities, proprietary technology, or critical interoperability requirements with existing systems. The nature of specialized C-UAS hardware might involve unique technological components or integration challenges that the Army deemed only SRC Inc. could fulfill at this time.

How does the $37.96 million contract value compare to similar C-UAS hardware procurements?

Direct comparison of the $37.96 million contract value for C-UAS hardware is difficult without more specific details on the systems being procured and the timeframe of comparable contracts. The C-UAS market is diverse, encompassing everything from small, man-portable systems to large, integrated base defense solutions. Given this is a Task Order for 'FS-LIDS HARDWARE SYSTEMS' under a larger contract, it suggests a specific type of capability. However, the sole-source nature prevents a direct price-to-price comparison with competitively awarded systems. The value appears substantial, reflecting the complexity and critical nature of counter-drone technology, but its 'value for money' can only be assessed internally by the DoD against performance requirements and alternative solutions.

What are the key risks associated with this sole-source contract for C-UAS hardware?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, SRC Inc. may not have the same incentive to offer the lowest possible price. Another risk is the potential for suboptimal technology or performance if alternative vendors could have offered superior or more cost-effective solutions. Furthermore, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single supplier, which can create long-term dependency and limit future innovation. Ensuring robust oversight and performance management is crucial to mitigate these risks.

What is the expected performance period and delivery timeline for this contract?

The contract has a start date of December 6, 2022, and an end date of March 31, 2026. This provides a performance period of approximately 3 years and 4 months (or 1211 days as indicated by 'dur'). This duration suggests a sustained need for the C-UAS hardware systems. The 'aw' field indicates it is a 'DELIVERY ORDER', implying that the hardware will be delivered within this timeframe. The specific delivery schedule for individual hardware sets would likely be detailed in subsequent delivery instructions or line items within the task order, but the overall period covers the expected completion of the requirement.

What does the 'NAICS code 334511' tell us about the nature of the procured goods?

The NAICS code 334511 corresponds to 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing'. This classification indicates that the procured hardware systems are related to instruments and systems used for searching, detecting, navigating, and guiding. In the context of C-UAS, this likely includes components such as radar, electro-optical/infrared sensors, acoustic sensors, jammers, or command and control systems designed to detect, track, identify, and potentially neutralize unmanned aerial vehicles. It places the procurement within a specific manufacturing subsector focused on advanced sensing and guidance 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: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7502 ROUND POND RD, NORTH SYRACUSE, NY, 13212

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

Financial Breakdown

Contract Ceiling: $37,955,286

Exercised Options: $37,955,286

Current Obligation: $37,955,286

Subaward Activity

Number of Subawards: 52

Total Subaward Amount: $19,773,924

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q20D0032

IDV Type: IDC

Timeline