DoD's $81M Night Eagle System Contract Lacked Competition, Raising Cost Concerns

Contract Overview

Contract Amount: $81,363,069 ($81.4M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2012-09-26

End Date: 2015-09-25

Contract Duration: 1,094 days

Daily Burn Rate: $74.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE CONTRACTOR SHALL PROVIDE DESIGN, HARDWARE&SOFTWARE INTEGRATION, MAINTENANCE, REPAIR, LOGISTICS, FLIGHT OPERATIONS AND TEST SUPPORT AS NECESSARY TO CONTINUE OCONUS OPERATIONS OF THE NIGHT EAGLE SYSTEM.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20405

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $81.4 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: THE CONTRACTOR SHALL PROVIDE DESIGN, HARDWARE&SOFTWARE INTEGRATION, MAINTENANCE, REPAIR, LOGISTICS, FLIGHT OPERATIONS AND TEST SUPPORT AS NECESSARY TO CONTINUE OCONUS OPERATIONS OF THE NIGHT EAGLE SYSTEM. Key points: 1. The contract awarded to undisclosed domestic awardees for the Night Eagle system is a significant expenditure. 2. Lack of competition suggests potential for higher costs and reduced innovation. 3. The contract covers a broad range of services including design, integration, maintenance, and operations. 4. The sector is Engineering Services, a critical component of defense operations.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes it difficult to benchmark pricing effectively. The total award value of $81.4 million over three years suggests a high per-unit cost, but without competitive bids, true value is uncertain.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and may lead to inflated costs for the government.

Taxpayer Impact: The absence of competition likely results in higher taxpayer costs due to the lack of market pressure to offer the best price.

Public Impact

Taxpayers may be overpaying for essential defense system support due to a lack of competitive bidding. The long-term operational readiness of the Night Eagle system could be impacted if costs become unsustainable. The Department of Defense's procurement strategy for this system warrants further scrutiny to ensure future cost-effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Cost Plus Fixed Fee
Undisclosed Awardees

Positive Signals

Essential System Support
Long-Term Contract

Sector Analysis

This contract falls under Engineering Services, a broad category crucial for defense readiness. Benchmarking is difficult without competitive data, but the $81M value over three years for OCONUS operations is substantial.

Small Business Impact

The contract data indicates no specific set-aside for small businesses, and the awardees are listed as undisclosed domestic entities. This suggests large prime contractors likely received the award, with limited direct opportunity for small businesses.

Oversight & Accountability

The 'not competed' status raises questions about the justification for sole-source procurement. Further oversight is needed to ensure fair pricing and explore future competitive opportunities.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition may lead to inflated costs.
Cost Plus Fixed Fee structure shifts risk to the government.
Undisclosed awardees hinder transparency.
Potential for reduced contractor innovation due to sole-source award.
Limited visibility into the justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.4 million to DOMESTIC AWARDEES (UNDISCLOSED). THE CONTRACTOR SHALL PROVIDE DESIGN, HARDWARE&SOFTWARE INTEGRATION, MAINTENANCE, REPAIR, LOGISTICS, FLIGHT OPERATIONS AND TEST SUPPORT AS NECESSARY TO CONTINUE OCONUS OPERATIONS OF THE NIGHT EAGLE SYSTEM.

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $81.4 million.

What is the period of performance?

Start: 2012-09-26. End: 2015-09-25.

What was the justification for not competing this significant contract, and were alternative acquisition strategies considered?

The justification for not competing this contract is not provided in the data. Typically, sole-source awards require a documented justification, such as a lack of qualified sources or urgent and compelling needs. Without this information, it's impossible to assess if alternative strategies were considered or if this was the most cost-effective approach for the government.

How does the Cost Plus Fixed Fee structure impact cost control and contractor performance in this specific context?

The Cost Plus Fixed Fee (CPFF) structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it can incentivize contractors to complete work efficiently, it also shifts much of the cost risk to the government. In a non-competed scenario, the fixed fee might not be as aggressively negotiated, potentially leading to higher overall costs than a fixed-price contract awarded competitively.

What is the long-term strategy for ensuring cost-effectiveness and innovation for the Night Eagle system's ongoing support?

The current data does not outline a long-term strategy for cost-effectiveness or innovation. Given the non-competed nature of this award, future contract actions should prioritize exploring competitive avenues to drive down costs and encourage technological advancements. Regular market research and strategic sourcing efforts will be crucial.

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

Solicitation ID: W909MY12RB005

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

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

Financial Breakdown

Contract Ceiling: $83,200,868

Exercised Options: $81,463,069

Current Obligation: $81,363,069

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $5,802,289

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline