DoD awards $33M for FLIR unit repair, with limited competition and potential for higher costs

Contract Overview

Contract Amount: $33,064,087 ($33.1M)

Contractor: Teledyne Flir Defense, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-01-31

End Date: 2026-09-26

Contract Duration: 1,334 days

Daily Burn Rate: $24.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS EFFORT IS FOR THE TEST TEARDOWN AND EVALUATION AND REPAIR OF THE STARTACH FLIR HD 380 UNITS

Place of Performance

Location: WILSONVILLE, CLACKAMAS County, OREGON, 97070

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $33.1 million to TELEDYNE FLIR DEFENSE, INC. for work described as: THE PURPOSE OF THIS EFFORT IS FOR THE TEST TEARDOWN AND EVALUATION AND REPAIR OF THE STARTACH FLIR HD 380 UNITS Key points: 1. The contract focuses on specialized repair and evaluation of FLIR HD 380 units, indicating a critical need for maintaining advanced surveillance equipment. 2. Limited competition for this contract raises concerns about price discovery and potential overpayment. 3. The firm-fixed-price contract type aims to control costs, but the lack of competition may undermine this. 4. The duration of the contract (over 3 years) suggests a long-term requirement for these specialized repair services. 5. The award to Teledyne FLIR Defense, Inc., the likely original equipment manufacturer, suggests a sole-source or limited-source situation. 6. The absence of small business set-asides or subcontracting requirements may limit opportunities for smaller firms in this specialized niche.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more data on the specific repair services and the typical cost of such maintenance. However, the limited competition suggests that the government may not have achieved the most favorable pricing. Comparing this to other contracts for similar specialized equipment repair would be necessary to determine if the $33 million expenditure represents a good value for money. The firm-fixed-price structure is a positive, but the lack of competitive pressure could lead to costs exceeding market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited-source award. Typically, this occurs when only one vendor possesses the necessary expertise, proprietary technology, or is the original equipment manufacturer. The lack of competition means that the Department of Defense did not explore options with multiple bidders, which can limit price negotiation and potentially lead to higher costs for the government.

Taxpayer Impact: The absence of a competitive bidding process means taxpayers may be paying a premium for these specialized repair services, as there was no market pressure to drive down prices.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive the repaired FLIR units essential for their operations. The services delivered include test, teardown, evaluation, and repair of critical surveillance equipment. The geographic impact is primarily within the Department of Defense's operational theaters where these units are deployed. Workforce implications are likely concentrated within Teledyne FLIR Defense, Inc., which possesses the specialized skills for this repair.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Potential for vendor lock-in due to specialized nature of repair.
Limited transparency into the cost breakdown of repair services.

Positive Signals

Firm-fixed-price contract type helps to cap overall expenditure.
Award to a known entity (Teledyne FLIR) suggests familiarity with their capabilities.
Focus on repair ensures continued operational readiness of critical equipment.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing and maintenance of specialized defense electronics. The market for such niche repair services is often dominated by original equipment manufacturers or highly specialized defense contractors. Benchmarking spending in this area is difficult due to the proprietary nature of the technology and the limited number of qualified providers. The overall defense electronics market is substantial, with significant government investment in surveillance and reconnaissance technology.

Small Business Impact

The data indicates that this contract was not competed and there is no indication of small business set-asides or subcontracting requirements. This suggests that opportunities for small businesses to participate in this specific contract are likely minimal. The specialized nature of repairing advanced FLIR units may also limit the pool of capable small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services at an agreed-upon price. Transparency may be limited due to the non-competitive nature of the award and the proprietary aspects of the repair process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency (DLA) Repair and Maintenance Contracts
Department of the Army Aviation and Missile Command (AMCOM) Support Contracts
Intelligence, Surveillance, and Reconnaissance (ISR) Equipment Maintenance
Night Vision and Electronic Sensors Directorate (NVESD) Support

Risk Flags

Limited competition
Potential for cost overruns due to lack of competition
Sole-source award raises transparency concerns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.1 million to TELEDYNE FLIR DEFENSE, INC.. THE PURPOSE OF THIS EFFORT IS FOR THE TEST TEARDOWN AND EVALUATION AND REPAIR OF THE STARTACH FLIR HD 380 UNITS

Who is the contractor on this award?

The obligated recipient is TELEDYNE FLIR DEFENSE, 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 $33.1 million.

What is the period of performance?

Start: 2023-01-31. End: 2026-09-26.

What is the specific breakdown of costs for the test, teardown, evaluation, and repair services under this contract?

The provided data does not include a detailed cost breakdown for the services rendered under this contract. The total award amount is $33,064,087.14 for the period of performance from January 31, 2023, to September 26, 2026. Without a line-item breakdown or access to the contract's detailed pricing structure, it is impossible to ascertain the specific costs associated with each phase of the work (testing, teardown, evaluation, and repair). This lack of transparency makes it difficult to assess the cost-effectiveness of individual service components and to benchmark them against industry standards or historical data for similar repair tasks.

How does the per-unit repair cost for the FLIR HD 380 units compare to industry benchmarks or previous contracts?

Determining a precise per-unit repair cost is not feasible with the current data. The contract value of $33,064,087.14 covers a period of 1334 days and an unspecified number of units requiring repair. To establish a benchmark, one would need to know the total number of units repaired or estimated to be repaired under this contract and the specific costs allocated to each repair. Given that Teledyne FLIR Defense, Inc. is the likely original equipment manufacturer, their pricing may not be directly comparable to independent repair shops, if any exist. A comparison would require access to historical contract data for similar repairs or market research on the pricing of specialized electro-optical/infrared (EO/IR) system maintenance.

What are the specific performance metrics and Key Performance Indicators (KPIs) used to evaluate the contractor's success in repairing the FLIR units?

The provided contract data does not specify the Key Performance Indicators (KPIs) or performance metrics that will be used to evaluate Teledyne FLIR Defense, Inc.'s performance. Typically, for repair and maintenance contracts, KPIs might include metrics such as turnaround time for repairs, defect rates after repair, adherence to technical specifications, and overall customer satisfaction. The Department of the Army's contracting officer and quality assurance personnel would be responsible for monitoring these aspects. Without explicit KPIs, assessing the contractor's success in meeting the government's needs becomes subjective and relies on broader contract administration oversight.

What is the historical spending pattern for the repair and maintenance of FLIR HD 380 units by the Department of Defense?

Historical spending data for the repair and maintenance of FLIR HD 380 units by the Department of Defense is not provided in the current data extract. This contract, valued at approximately $33 million over roughly 3.6 years, represents a significant investment. To understand historical patterns, one would need to query federal procurement databases (like FPDS or SAM.gov) for previous contracts awarded to Teledyne FLIR or other entities for the maintenance of this specific model or similar FLIR systems. Analyzing past spending would reveal trends in demand, pricing, and contractor performance over time, helping to contextualize the current award.

What is the potential risk associated with relying on a single supplier (Teledyne FLIR) for the repair of critical surveillance equipment?

Relying on a single supplier, especially the original equipment manufacturer like Teledyne FLIR Defense, Inc., for critical equipment repair carries several risks. Firstly, it can lead to vendor lock-in, where the government becomes dependent on that specific supplier, potentially limiting future negotiation leverage. Secondly, the lack of competition, as seen in this 'NOT COMPETED' award, can result in higher prices and reduced incentives for the supplier to innovate or improve efficiency. Thirdly, supply chain disruptions affecting the sole supplier could directly impact the availability of repaired equipment, jeopardizing operational readiness. Finally, without competitive pressure, there's a risk that the quality or timeliness of repairs might not meet the highest standards unless rigorously overseen.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Teledyne Technologies Incorporated

Address: 27700 SW PARKWAY AVE, WILSONVILLE, OR, 97070

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: $33,064,087

Exercised Options: $33,064,087

Current Obligation: $33,064,087

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W909MY19D0016

IDV Type: IDC

Timeline