DoD awards $67M for C-UAS FS-LIDS engineering support, with SRC Inc. as sole contractor

Contract Overview

Contract Amount: $67,016,438 ($67.0M)

Contractor: SRC Inc

Awarding Agency: Department of Defense

Start Date: 2023-08-30

End Date: 2025-12-31

Contract Duration: 854 days

Daily Burn Rate: $78.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PROVIDE ENGINEERING SUPPORT FOR ENHANCEMENTS FOR THE C-UAS FIXED SITE LOW, SLOW, SMALL UNMANNED AERIAL VEHICLE INTEGRATED DEFEAT SYSTEM (FS-LIDS) MANAGED BY THE INTEGRATED FIRES/RAPID CAPABILITIES OFFICE (IF/RCO) PROJECT DIRECTORATE (PD).

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13212

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $67.0 million to SRC INC for work described as: PROVIDE ENGINEERING SUPPORT FOR ENHANCEMENTS FOR THE C-UAS FIXED SITE LOW, SLOW, SMALL UNMANNED AERIAL VEHICLE INTEGRATED DEFEAT SYSTEM (FS-LIDS) MANAGED BY THE INTEGRATED FIRES/RAPID CAPABILITIES OFFICE (IF/RCO) PROJECT DIRECTORATE (PD). Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Significant funding allocated for engineering support, indicating complex system development and integration needs. 3. Long performance period (over 2 years) suggests a sustained requirement for specialized technical expertise. 4. Focus on Counter-Unmanned Aerial Systems (C-UAS) highlights a critical and evolving defense capability. 5. The contract's value places it in the mid-to-large tier for defense engineering services. 6. Lack of competition may limit opportunities for other innovative firms to contribute to this vital program.

Value Assessment

Rating: questionable

The contract's value of $67 million for engineering support over approximately two years requires careful benchmarking. Without competitive bids, it is difficult to assess if the pricing is optimal. The Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to increase costs to maximize their fee, especially if the fixed fee is a significant portion of the total contract value. Further analysis of the labor rates, overhead, and the fixed fee percentage is needed to determine value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, SRC Inc., was solicited. This approach bypasses the standard 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 limit the government's ability to leverage market competition to secure the best possible price and technical solution.

Taxpayer Impact: The absence of competition means taxpayers may not benefit from the cost savings and innovation that typically arise from a bidding process. The government is reliant on the contractor's proposed pricing without the leverage of alternative offers.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Integrated Fires/Rapid Capabilities Office (IF/RCO), receiving critical engineering support for C-UAS systems. The services delivered will enhance the capabilities of the C-UAS Fixed Site Low, Slow, Small Unmanned Aerial Vehicle Integrated Defeat System (FS-LIDS). The contract is managed by the Department of the Army, indicating a focus on ground-based air defense capabilities. Work is expected to be performed in New York, potentially impacting the local technology and defense workforce in that region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
CPFF contract type can lead to cost overruns if not closely managed.
Lack of transparency in the justification for sole-sourcing.
Potential for contractor lock-in due to specialized knowledge.
Long contract duration may not adapt quickly to evolving threats.

Positive Signals

Addresses a critical and evolving national security threat (C-UAS).
SRC Inc. likely possesses specialized expertise required for this complex system.
Engineering support ensures system enhancements and continued operational effectiveness.
Clear performance period provides a defined scope for the work.

Sector Analysis

The Counter-Unmanned Aerial Systems (C-UAS) market is a rapidly growing segment within the defense industry, driven by the increasing proliferation of small, low-cost drones. This contract falls under the broader aerospace and defense sector, specifically focusing on electronic warfare and integrated defeat systems. The market for C-UAS solutions is highly dynamic, with significant investment from various government agencies. Comparable spending benchmarks for similar engineering support contracts in this niche area are difficult to ascertain due to the specialized nature and proprietary technologies involved, but large-scale system development and integration efforts often run into tens to hundreds of millions of dollars.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. SRC Inc. is a mid-sized company. The lack of a small business set-aside or subcontracting plan means that opportunities for small businesses to participate in this specific contract are limited. This could reduce the overall impact on the small business defense ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable, and that the fixed fee is earned appropriately. Transparency regarding the justification for the sole-source award and the detailed breakdown of costs would enhance accountability. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

C-UAS Systems
Electronic Warfare Systems
Air Defense Systems
Rapid Capabilities Office Projects
Unmanned Aerial Vehicle Countermeasures

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding
Potential for cost overruns
Limited transparency in award justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.0 million to SRC INC. PROVIDE ENGINEERING SUPPORT FOR ENHANCEMENTS FOR THE C-UAS FIXED SITE LOW, SLOW, SMALL UNMANNED AERIAL VEHICLE INTEGRATED DEFEAT SYSTEM (FS-LIDS) MANAGED BY THE INTEGRATED FIRES/RAPID CAPABILITIES OFFICE (IF/RCO) PROJECT DIRECTORATE (PD).

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 $67.0 million.

What is the period of performance?

Start: 2023-08-30. End: 2025-12-31.

What is SRC Inc.'s track record with the Department of Defense, particularly on C-UAS or similar complex systems?

SRC Inc. has a significant history of contracting with the Department of Defense, often in areas related to electronic warfare, intelligence, surveillance, and reconnaissance (ISR), and command and control systems. They have been involved in developing and integrating various sensor and electronic warfare technologies. While specific details on their C-UAS program performance are not publicly detailed in this data, their established presence suggests a level of technical capability and past performance that likely informed the sole-source decision. A deeper dive into their contract history, including past performance evaluations and any reported issues on similar programs, would provide a more comprehensive understanding of their suitability for this critical engineering support role.

How does the $67 million contract value compare to similar engineering support contracts for complex defense systems?

The $67 million value for approximately 2.6 years of engineering support for a specialized system like C-UAS FS-LIDS is substantial but not unprecedented in the defense sector. Large-scale system development, integration, and sustainment contracts can easily reach these figures or higher. However, the lack of competition makes direct comparison difficult. If this were a competitively bid contract, the value might be benchmarked against other bids received. In a sole-source context, the comparison is more about assessing if the allocated funds are reasonable for the scope of work, considering the contractor's expertise and the system's complexity. Without market data from competing offers, it's challenging to definitively state if this represents optimal value.

What are the primary risks associated with a sole-source award for critical defense technology like C-UAS?

The primary risks of a sole-source award for critical defense technology include potential overpayment due to the absence of competitive pricing pressure, reduced innovation from lack of market alternatives, and the risk of contractor lock-in. Taxpayers may not receive the best possible value for their investment. Furthermore, sole-sourcing can sometimes mask inefficiencies or a lack of proactive planning by the agency to foster a competitive environment. For C-UAS, which is a rapidly evolving threat, relying on a single provider might also slow down the adoption of next-generation technologies if the incumbent contractor does not prioritize or cannot deliver them effectively.

How effective is the Cost Plus Fixed Fee (CPFF) contract type in managing costs for engineering support services?

The Cost Plus Fixed Fee (CPFF) contract type aims to provide a balance between cost control and contractor incentive. The government pays the actual allowable costs incurred by the contractor, plus a predetermined fixed fee representing the contractor's profit. This structure can be effective when the scope of work is not precisely defined at the outset, allowing for flexibility in research and development or complex engineering efforts. However, it carries risks: if the fixed fee is a large percentage of the anticipated total cost, the contractor may have less incentive to control costs. Conversely, if the fee is too low, it might not adequately compensate the contractor for the effort. Close government oversight of costs and a well-defined scope are crucial for managing CPFF contracts effectively.

What is the historical spending trend for C-UAS related engineering support within the Department of Defense?

Historical spending on Counter-Unmanned Aerial Systems (C-UAS) related engineering support within the Department of Defense has seen a significant upward trend over the past decade. This is directly correlated with the increasing threat posed by drones across various operational environments. While specific aggregate data for 'engineering support' alone is not readily available, overall DoD spending on C-UAS programs, encompassing research, development, procurement, and sustainment, has grown substantially. Agencies like the Army, Navy, and Air Force have initiated numerous programs and awarded multiple contracts, both competitive and sole-source, to address this capability gap. This $67 million award is indicative of the continued investment in this critical area.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

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: $67,016,438

Exercised Options: $67,016,438

Current Obligation: $67,016,438

Subaward Activity

Number of Subawards: 38

Total Subaward Amount: $5,545,147

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