DoD awards $44.7M non-warranty contract for STARSAFIRE III/HD to Teledyne FLIR, raising competition concerns

Contract Overview

Contract Amount: $44,755,781 ($44.8M)

Contractor: Teledyne Flir, LLC

Awarding Agency: Department of Defense

Start Date: 2011-05-23

End Date: 2014-11-30

Contract Duration: 1,287 days

Daily Burn Rate: $34.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NON-WARRANTY R&R OF STARSAFIRE III/HD

Place of Performance

Location: WILSONVILLE, CLACKAMAS County, OREGON, 97070

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $44.8 million to TELEDYNE FLIR, LLC for work described as: NON-WARRANTY R&R OF STARSAFIRE III/HD Key points: 1. Contract awarded to a single vendor, Teledyne FLIR, LLC. 2. The contract is for non-warranty repair and replacement of STARSAFIRE III/HD systems. 3. The total award value is $44,755,781.44. 4. The contract was not competed, indicating potential lack of price discovery. 5. The North American Industry Classification System (NAICS) code is 334511.

Value Assessment

Rating: questionable

The contract value of $44.7M for repair and replacement services is significant. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar repair services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning it was awarded directly to Teledyne FLIR, LLC. This approach limits price discovery and may result in higher costs for the government compared to a competitive process.

Taxpayer Impact: The lack of competition for a $44.7M contract could lead to taxpayers paying more than necessary for these repair and replacement services.

Public Impact

Military readiness may be impacted if STARSAFIRE III/HD systems are critical for operations. Taxpayers may be overpaying due to the absence of competitive bidding. Dependence on a single vendor for repairs could create long-term sustainment challenges. The specific capabilities and operational necessity of STARSAFIRE III/HD are not detailed, limiting public understanding of the spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for overpayment

Positive Signals

Definitive contract provides clear terms
Firm Fixed Price contract limits cost overrun risk

Sector Analysis

This contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is crucial for national defense, but competitive procurement is vital to ensure cost-effectiveness.

Small Business Impact

The contract was awarded to Teledyne FLIR, LLC, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common in sole-source procurements.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, awarded this contract. Oversight would focus on ensuring Teledyne FLIR fulfills the contract terms and that the services provided are necessary and appropriately priced, despite the lack of competition.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated pricing
Vendor lock-in risk
Limited transparency on justification for sole-source award
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.8 million to TELEDYNE FLIR, LLC. NON-WARRANTY R&R OF STARSAFIRE III/HD

Who is the contractor on this award?

The obligated recipient is TELEDYNE FLIR, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $44.8 million.

What is the period of performance?

Start: 2011-05-23. End: 2014-11-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves factors like unique capabilities, proprietary technology, or urgent needs where only one vendor can meet requirements. Without specific documentation, it's presumed the agency determined Teledyne FLIR was the only viable source. However, 'fair and reasonable pricing' in sole-source contracts often relies on historical data, cost analysis, or price certifications from the vendor, which may not be as robust as price competition.

What is the operational criticality of the STARSAFIRE III/HD systems, and what are the risks associated with relying on a single vendor for their maintenance?

The operational criticality of STARSAFIRE III/HD systems is likely high, given their classification under navigation and guidance instruments, suggesting use in sensitive defense applications. The primary risk of sole-source reliance is vendor lock-in, where the government becomes dependent on one supplier, potentially leading to escalating costs, reduced service quality, and vulnerability if the vendor faces financial or operational difficulties.

How does the $44.7M expenditure compare to industry benchmarks for similar repair and maintenance services, and what is the long-term financial outlook?

Benchmarking this expenditure is challenging without detailed service scope and market data for specialized defense equipment like STARSAFIRE III/HD. However, a $44.7M outlay for non-warranty repairs suggests significant system complexity or widespread deployment. The long-term financial outlook is concerning due to the lack of competition; future repair needs could continue to be procured at potentially non-competitive prices, impacting sustained operational readiness budgets.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $46,885,277

Exercised Options: $45,903,317

Current Obligation: $44,755,781

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline