DoD awards $147.6M sole-source contract for PDRS-PIFF system production to Telephonics Corporation
Contract Overview
Contract Amount: $14,762,474 ($14.8M)
Contractor: Telephonics Corporation
Awarding Agency: Department of Defense
Start Date: 2023-06-23
End Date: 2026-02-27
Contract Duration: 980 days
Daily Burn Rate: $15.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PDRS-PIFF SYSTEM PRODUCTION.
Place of Performance
Location: FARMINGDALE, SUFFOLK County, NEW YORK, 11735
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $14.8 million to TELEPHONICS CORPORATION for work described as: PDRS-PIFF SYSTEM PRODUCTION. Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price inflation and limited market engagement. 2. The fixed-price contract structure aims to control costs, but the lack of competition may hinder optimal value. 3. Performance duration of 980 days suggests a significant, long-term need for the PDRS-PIFF system. 4. The contract is for engineering services, indicating a focus on technical development and production. 5. Awarded by the Department of the Army, this contract supports critical defense capabilities. 6. The sole-source nature presents a risk of reduced innovation and responsiveness compared to a competitive environment.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and the specific, likely proprietary, nature of the PDRS-PIFF system. Without competitive bids, it's difficult to ascertain if the $147.6 million price represents fair market value. The firm fixed-price structure provides some cost certainty for the government, but the absence of competition limits the ability to assess if this is the most cost-effective solution available. Further analysis would require understanding the system's capabilities and comparing it to any potential alternatives or previous contract pricing for similar systems, if available.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific vendor possesses unique capabilities, intellectual property, or is the sole provider of a critical component or system. The lack of competition means there were no other bidders to compare against, potentially limiting price discovery and the government's ability to negotiate the best possible terms. The justification for sole-source procurement would need to be thoroughly reviewed to understand why competition was not feasible.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there's a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher overall expenditure for the government.
Public Impact
The primary beneficiaries are the Department of Defense and the U.S. Army, who will receive the PDRS-PIFF system. The contract will deliver production of the PDRS-PIFF system, likely enhancing military operational capabilities. The geographic impact is primarily within the United States, with potential deployment to operational theaters. Workforce implications may include specialized engineering and manufacturing roles at Telephonics Corporation and its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and may result in higher costs for taxpayers.
- Lack of competition could stifle innovation and reduce contractor responsiveness.
- The specific nature of the PDRS-PIFF system may create vendor lock-in, limiting future flexibility.
- Transparency into the sole-source justification and pricing breakdown is crucial for accountability.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government.
- Award to an established contractor, Telephonics Corporation, may indicate a reliable source for critical technology.
- The contract duration suggests a sustained commitment to a necessary defense capability.
Sector Analysis
The defense sector is characterized by high-value, technologically advanced contracts often awarded to specialized firms. Engineering services, particularly those supporting complex defense systems like PDRS-PIFF, represent a significant portion of defense spending. Market size for such specialized systems can be niche but critical. Comparable spending benchmarks are difficult to establish without knowing the specific function of PDRS-PIFF, but large-scale system production contracts in defense can range from tens to hundreds of millions of dollars.
Small Business Impact
This contract does not appear to include a small business set-aside, as indicated by 'sb: false'. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary award is to a large business, and the impact on the small business ecosystem will depend on whether Telephonics Corporation actively seeks small business subcontractors for specialized components or services. Without specific subcontracting plans, the direct benefit to small businesses from this particular award may be limited.
Oversight & Accountability
Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates Telephonics Corporation to deliver the specified system within the agreed-upon price. Transparency may be limited due to the sole-source nature, but contract modifications, performance reports, and final delivery would be subject to internal government review. The Inspector General's office could investigate if any improprieties are suspected.
Related Government Programs
- Defense Production Act Investments
- Military Radar Systems
- Avionics Production
- Command and Control Systems
- Intelligence, Surveillance, and Reconnaissance (ISR) Platforms
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Limited innovation incentive
Tags
defense, department-of-the-army, telephonics-corporation, sole-source, engineering-services, firm-fixed-price, production, new-york, large-contract, national-defense
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.8 million to TELEPHONICS CORPORATION. PDRS-PIFF SYSTEM PRODUCTION.
Who is the contractor on this award?
The obligated recipient is TELEPHONICS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $14.8 million.
What is the period of performance?
Start: 2023-06-23. End: 2026-02-27.
What is the PDRS-PIFF system and what are its primary functions?
The PDRS-PIFF system is identified in the data as 'PDRS-PIFF SYSTEM PRODUCTION.' While the acronym's full meaning is not provided, its context within a Department of Defense contract awarded to Telephonics Corporation, a known defense contractor specializing in avionics and communication systems, suggests it is a critical defense technology. Based on Telephonics' typical product lines, PDRS-PIFF could relate to radar, data processing, or integrated platform systems used for surveillance, reconnaissance, command and control, or electronic warfare. The contract's focus on 'production' indicates it is a system that has likely moved beyond the research and development phase and is being manufactured for deployment. Further details on its specific capabilities would require access to classified information or more detailed public contract descriptions.
Why was this contract awarded on a sole-source basis?
The data explicitly states the contract was awarded as 'NOT COMPETED,' indicating a sole-source procurement. The specific justification for this sole-source award is not detailed in the provided data. However, common reasons for sole-source contracts in the defense sector include situations where only one responsible source can provide the required supplies or services, such as when the system involves proprietary technology, unique manufacturing capabilities, or is a sole-source component of a larger system. For instance, if Telephonics Corporation holds the patents or unique expertise for the PDRS-PIFF system, or if it's an upgrade to an existing system where only the original manufacturer can ensure compatibility and performance, a sole-source award might be deemed necessary. A formal Justification for Other than Full and Open Competition (JOFOC) would typically be required and documented by the agency.
How does the firm fixed-price contract type impact cost control and risk for this award?
A Firm Fixed-Price (FFP) contract type, as indicated ('pt': 'FIRM FIXED PRICE'), means that the contractor, Telephonics Corporation, is obligated to perform the work for a set price, regardless of their actual costs. This structure is generally favorable to the government for cost control because it shifts the risk of cost overruns to the contractor. If Telephonics' production costs exceed their estimates, their profit margin will decrease, but the government's payment remains fixed at $147.6 million. Conversely, if their costs are lower than anticipated, their profit will be higher. This contract type provides budget certainty for the Department of the Army. However, the effectiveness of cost control in an FFP contract is heavily influenced by the initial price negotiation and the contractor's ability to manage their own expenses efficiently.
What is the historical spending pattern for similar PDRS-PIFF systems or related contracts by Telephonics Corporation?
The provided data does not include historical spending patterns for the PDRS-PIFF system or related contracts by Telephonics Corporation. To assess historical spending, one would need to query federal procurement databases (like FPDS or USASpending) for previous awards to Telephonics Corporation related to the PDRS-PIFF system or similar defense electronics and production contracts. Analyzing past contract values, durations, and competition levels for Telephonics would provide context on whether this $147.6 million award is consistent with previous investments in similar capabilities or represents a significant increase or decrease. Without this historical data, it's difficult to determine if this award aligns with established spending trends.
What are the potential risks associated with a sole-source award of this magnitude?
A sole-source award of $147.6 million carries several potential risks. Firstly, the lack of competition means the government may not be achieving the best possible price, potentially leading to overpayment. Secondly, without competitive pressure, the contractor might have less incentive to innovate, improve efficiency, or expedite delivery. This can lead to a system that is not as advanced or cost-effective as it could be in a competitive market. Thirdly, there's a risk of vendor lock-in, where the government becomes heavily reliant on a single supplier for a critical system, limiting future options and potentially increasing long-term costs for sustainment and upgrades. Finally, sole-source awards can sometimes raise concerns about fairness and the proper use of taxpayer funds, necessitating robust justification and oversight.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: TTM Technologies, Inc.
Address: 815 BROADHOLLOW RD, FARMINGDALE, NY, 11735
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $14,762,474
Exercised Options: $14,762,474
Current Obligation: $14,762,474
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W31P4Q23D0011
IDV Type: IDC
Timeline
Start Date: 2023-06-23
Current End Date: 2026-02-27
Potential End Date: 2026-02-27 00:00:00
Last Modified: 2025-11-24
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