Department of the Army awards $26.8M contract for C-UAS E-LIDS INC2 W/ MMR, highlighting a sole-source procurement

Contract Overview

Contract Amount: $26,851,332 ($26.9M)

Contractor: SRC Inc

Awarding Agency: Department of Defense

Start Date: 2023-08-30

End Date: 2025-11-30

Contract Duration: 823 days

Daily Burn Rate: $32.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-UAS, E-LIDS, INC2 W/) MMR, PART NUMBER SRC7118 PURCHASE

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13212

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $26.9 million to SRC INC for work described as: C-UAS, E-LIDS, INC2 W/) MMR, PART NUMBER SRC7118 PURCHASE Key points: 1. The contract value of $26.8M for C-UAS E-LIDS INC2 W/ MMR represents a significant investment in counter-unmanned aircraft systems. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited market engagement. 3. The duration of the contract (over two years) suggests a need for sustained support or development in this critical defense area. 4. The specific part number SRC7118 indicates a precise component or system, potentially limiting interchangeability and further concentrating procurement. 5. The absence of small business set-aside flags suggests this contract is not specifically structured to benefit smaller enterprises. 6. The firm-fixed-price contract type aims to provide cost certainty for the government, but the sole-source aspect may undermine competitive pricing benefits.

Value Assessment

Rating: questionable

Benchmarking the value of this $26.8M contract is challenging without comparable sole-source awards for the C-UAS E-LIDS INC2 W/ MMR system. The firm-fixed-price structure provides some cost predictability, but the lack of competition raises concerns about whether the government secured the best possible price. Further analysis would require understanding the specific capabilities and market landscape for this specialized counter-unmanned aircraft system.

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 standard competitive bidding process, which typically involves multiple vendors vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they inherently limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure. Without multiple bids, there is less assurance that the price reflects the most economical option available in the market.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive advanced counter-unmanned aircraft systems. The contract will deliver critical capabilities for detecting, identifying, and potentially neutralizing drone threats. The geographic impact is likely focused on areas where the Army operates and faces drone-related security challenges, potentially worldwide. Workforce implications may include specialized technical support and integration personnel for the E-LIDS system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source award.
Potential for vendor lock-in due to specialized system (E-LIDS INC2 W/ MMR).
No indication of small business participation or subcontracting opportunities.
Limited public information on the specific performance metrics or expected outcomes of the system.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Award addresses a critical and evolving defense need (counter-UAS).
Contract awarded to a known entity (SRC Inc.) with potential existing expertise.
Specific part number suggests a well-defined and potentially mature solution.

Sector Analysis

The market for counter-unmanned aircraft systems (C-UAS) is rapidly evolving, driven by increasing threats from drones. This contract falls within the broader defense electronics and systems manufacturing sector, specifically focusing on sensor and detection technologies. The North American Industry Classification System (NAICS) code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing) encompasses companies involved in producing such sophisticated equipment. While specific market size data for C-UAS E-LIDS INC2 W/ MMR is not readily available, the overall defense electronics market is substantial, with significant government investment in advanced threat detection and mitigation capabilities.

Small Business Impact

This contract does not appear to include any specific small business set-aside provisions, as indicated by the 'sb': false flag. Furthermore, the sole-source nature of the award makes it unlikely that subcontracting opportunities for small businesses would be mandated or actively sought. This suggests that the primary contract value will flow to the prime contractor, SRC Inc., with limited direct benefit to the small business ecosystem in this specific procurement.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, the justification and approval process would have undergone specific review. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected. The firm-fixed-price nature of the contract provides a degree of financial oversight by fixing the total cost.

Related Government Programs

Counter-UAS Systems
Defense Electronics Manufacturing
Search and Detection Systems
Army Aviation Support
Intelligence, Surveillance, and Reconnaissance (ISR) Equipment

Risk Flags

Sole-source procurement
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.9 million to SRC INC. C-UAS, E-LIDS, INC2 W/) MMR, PART NUMBER SRC7118 PURCHASE

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 $26.9 million.

What is the period of performance?

Start: 2023-08-30. End: 2025-11-30.

What is the specific capability of the C-UAS E-LIDS INC2 W/ MMR system being procured?

The C-UAS E-LIDS INC2 W/ MMR system refers to Counter-Unmanned Aircraft Systems, specifically the E-LIDS (Electronic Light Integrated Defense System) INC2 variant with MMR (Multi-Mission Radar). This system is designed for the detection, identification, tracking, and potentially the mitigation of small unmanned aircraft systems (UAS). The 'INC2' designation suggests an upgraded or second-generation version, likely incorporating enhanced features over previous iterations. The MMR component indicates its capability to utilize radar for these functions, providing all-weather and day/night operational capacity. The specific part number SRC7118 points to a particular configuration or component within this larger system, likely critical for its operational effectiveness.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For the C-UAS E-LIDS INC2 W/ MMR system, the justification might stem from unique proprietary technology, specialized integration requirements, or a critical need for a specific, proven system where alternatives are not viable or would require extensive and time-consuming development or modification. The government may have determined that SRC Inc. possesses the sole rights to this specific technology or that the urgency of the requirement precluded a lengthy competitive process. A formal Justification and Approval (J&A) document would detail the specific reasons and market research conducted to support this sole-source determination.

How does the $26.8M contract value compare to similar C-UAS procurements?

Directly comparing the $26.8M value of this sole-source contract for the C-UAS E-LIDS INC2 W/ MMR system to other C-UAS procurements is challenging without more specific details on system capabilities and contract scope. However, the counter-UAS market encompasses a wide range of solutions, from portable detection devices to integrated command-and-control systems with various effectors. Larger, integrated systems with radar and advanced processing, especially those developed by established defense contractors like SRC Inc., can command significant contract values. The sole-source nature also means this price isn't validated by competition. To provide a robust comparison, one would need to identify contracts for systems with comparable technological sophistication, operational scope (e.g., fixed-site defense, mobile platforms), and vendor capabilities.

What are the potential risks associated with a sole-source award for this C-UAS system?

The primary risk of a sole-source award is the potential for inflated pricing due to the absence of competitive pressure. Without competing bids, the government may not achieve the best possible value for its investment. Other risks include limited innovation, as the sole provider may have less incentive to improve the system or offer cost-saving alternatives. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier for upgrades, maintenance, and future iterations of the system, potentially limiting future flexibility and increasing long-term costs. Furthermore, the lack of competition can reduce transparency in the procurement process.

What is SRC Inc.'s track record with the Department of Defense, particularly in C-UAS technology?

SRC Inc. is a known defense contractor with a history of providing various electronic systems and services to the U.S. military, including the Department of Defense. They have been involved in developing and supplying radar, electronic warfare, and C-UAS technologies. Their involvement in previous iterations or related systems within the C-UAS domain, such as the E-LIDS INC2 program, suggests a level of established expertise and a track record with the specific technology being procured. Analyzing their past performance on similar contracts, including delivery timeliness, system effectiveness, and adherence to budget, would provide further insight into their reliability for this current award.

What are the implications of the firm-fixed-price contract type in this sole-source scenario?

A firm-fixed-price (FFP) contract type means the total price is set and not subject to adjustment based on the contractor's cost experience. In a competitive environment, FFP is generally favored by the government as it shifts cost risk to the contractor and provides budget certainty. However, in a sole-source scenario, the benefit of cost certainty is somewhat diminished if the initial fixed price was not rigorously negotiated against competitive benchmarks. While the government knows the total cost, the risk remains that this fixed price might be higher than what could have been achieved through competition. The contractor, SRC Inc., bears the risk of cost overruns but benefits from potential cost underruns, which become pure profit.

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: $36,203,679

Exercised Options: $26,851,332

Current Obligation: $26,851,332

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,563,209

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