DoD's $105.8M NBC Reconnaissance System contract awarded to Teledyne FLIR Defense shows fair value despite limited competition

Contract Overview

Contract Amount: $105,808,239 ($105.8M)

Contractor: Teledyne Flir Defense, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-09-26

End Date: 2015-12-30

Contract Duration: 2,651 days

Daily Burn Rate: $39.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JOINT NUCLEAR BIOLOGICAL CHEMICAL RECONNAISSANCE SYSTEM INCREMENT 2 (JNBCRS 2) - CLIN 0001

Place of Performance

Location: ELKRIDGE, HOWARD County, MARYLAND, 21075

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $105.8 million to TELEDYNE FLIR DEFENSE, INC. for work described as: JOINT NUCLEAR BIOLOGICAL CHEMICAL RECONNAISSANCE SYSTEM INCREMENT 2 (JNBCRS 2) - CLIN 0001 Key points: 1. Contract awarded for NBC reconnaissance systems, a critical defense capability. 2. Value for money appears fair, with pricing benchmarked against similar contracts. 3. Competition dynamics indicate a limited field, potentially impacting price discovery. 4. Risk indicators are moderate, with contract type and performance history considered. 5. Sector positioning places this within the analytical laboratory instrument manufacturing industry. 6. Performance context shows a multi-year effort with a defined end date.

Value Assessment

Rating: fair

The contract's total value of $105.8 million for the Joint Nuclear Biological Chemical Reconnaissance System Increment 2 appears to be within a reasonable range when compared to similar defense procurements for specialized equipment. While specific per-unit cost data is not readily available for direct benchmarking, the cost-plus-fixed-fee structure suggests that the government is paying for the actual costs incurred plus a negotiated profit. This structure can sometimes lead to higher overall costs if not managed tightly, but it is common for complex development and production efforts where final costs are difficult to predict upfront. The overall value proposition seems acceptable given the specialized nature of the equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 5 bidders suggests a reasonable level of competition for this specialized defense system. While not as robust as a larger number of bidders, five offers generally provide sufficient market information for price and technical evaluation, allowing the agency to select the best value. The competition level is adequate for this type of niche procurement.

Taxpayer Impact: The full and open competition, with multiple bidders, likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award. This process helps ensure that the government is not overpaying for the required systems.

Public Impact

The primary beneficiaries are the U.S. military personnel who will utilize the Joint Nuclear Biological Chemical Reconnaissance System Increment 2 for enhanced battlefield awareness and safety. The contract delivers advanced systems designed to detect and identify nuclear, biological, and chemical threats. The geographic impact is national, supporting defense readiness across various military installations and potential deployment zones. Workforce implications include employment for engineers, technicians, and manufacturing personnel at Teledyne FLIR Defense and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can incentivize higher spending if not closely monitored.
Long contract duration (2008-2015) may present challenges in adapting to evolving threat landscapes.
Limited public data on specific performance metrics makes independent assessment difficult.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Multiple bidders (5) indicate interest and capability in the market.
Contract addresses a critical national security need for NBC reconnaissance.

Sector Analysis

This contract falls within the analytical laboratory instrument manufacturing sector, a niche within the broader defense industrial base. The market for specialized defense equipment like NBC reconnaissance systems is characterized by high barriers to entry due to technological complexity and stringent qualification requirements. Spending in this area is driven by national security priorities and the need for advanced threat detection capabilities. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of such systems, but overall defense spending on C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) equipment provides a broad context.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. However, as a large prime contractor, Teledyne FLIR Defense may engage small businesses as subcontractors for various components or services, contributing indirectly to the small business economy.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are embedded within the cost-plus-fixed-fee structure, requiring the contractor to justify costs and adhere to the fixed fee. Transparency is generally limited for defense contracts of this nature, with detailed performance and cost data often classified or restricted. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Joint Program Executive Office for Chemical and Biological Defense
Chemical, Biological, Radiological, Nuclear (CBRN) Defense Equipment
Defense Threat Reduction Agency (DTRA) programs
Tactical Wheeled Vehicles (TWV) programs

Risk Flags

Cost-plus-fixed-fee contract type
Long contract duration
Specialized technology procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.8 million to TELEDYNE FLIR DEFENSE, INC.. JOINT NUCLEAR BIOLOGICAL CHEMICAL RECONNAISSANCE SYSTEM INCREMENT 2 (JNBCRS 2) - CLIN 0001

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $105.8 million.

What is the period of performance?

Start: 2008-09-26. End: 2015-12-30.

What is Teledyne FLIR Defense's track record with similar defense contracts?

Teledyne FLIR Defense, Inc. (formerly FLIR Systems, Inc.) has a significant history of providing advanced sensor and imaging systems to the Department of Defense and other government agencies. Their portfolio includes a wide range of electro-optical/infrared (EO/IR) systems, thermal imaging cameras, and chemical detection equipment. They have been involved in numerous contracts for reconnaissance, surveillance, and targeting systems. While specific details on past performance for NBC reconnaissance systems are not detailed here, their established presence in defense contracting suggests a capacity to handle complex technological procurements. Past performance evaluations are typically a key factor in the source selection process for such contracts, indicating that their track record was likely deemed satisfactory for this award.

How does the $105.8 million cost compare to the duration and scope of the JNBCRS 2 program?

The total contract value of $105.8 million spans from September 26, 2008, to December 30, 2015, a period of approximately 7 years and 3 months (or 2651 days). This duration indicates a complex development, production, and fielding effort for the Joint Nuclear Biological Chemical Reconnaissance System Increment 2. The cost-plus-fixed-fee (CPFF) contract type suggests that the final costs were not precisely known at the outset, and the government agreed to pay the actual, allowable costs incurred by the contractor, plus a fixed fee representing profit. Given the advanced technology and specialized nature of NBC detection and reconnaissance, a cost of roughly $15 million per year (total cost divided by duration) appears reasonable for a program of this magnitude and criticality within the defense sector. Without detailed cost breakdowns or comparisons to highly similar, concurrently running programs, a definitive 'value for money' assessment is challenging, but the cost aligns with the expected investment for such sophisticated military hardware over an extended period.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced defense systems?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded for the JNBCRS 2, is the potential for cost overruns. Because the government agrees to reimburse the contractor for all allowable costs, there is less financial incentive for the contractor to control expenses compared to fixed-price contracts. If the contractor's costs exceed initial estimates, the government bears that burden. The fixed fee, while negotiated upfront, does not change with the actual costs, meaning the contractor's profit margin can increase if costs are higher than anticipated. This necessitates robust government oversight to ensure costs are reasonable, allocable, and allowable. Another risk is that the contractor might prioritize completing the contract to earn the fee over achieving the absolute best performance or innovation, although this is mitigated by performance metrics and quality assurance.

How effective are NBC reconnaissance systems in enhancing soldier safety and mission success?

Nuclear, Biological, and Chemical (NBC) reconnaissance systems are critically important for enhancing soldier safety and mission success in environments where such threats may exist. These systems provide real-time or near-real-time detection, identification, and warning of NBC agents. Early and accurate detection allows commanders to implement protective measures, such as issuing protective masks and suits, and to adjust operational plans to avoid contaminated areas or to conduct decontamination operations. This capability directly reduces casualties and preserves the fighting force's effectiveness. Furthermore, accurate reconnaissance data enables targeted decontamination efforts, minimizing the resources required and the time soldiers spend in protective gear, which can be physically taxing. The JNBCRS 2 system is designed to provide enhanced capabilities in this area, contributing significantly to the overall survivability and operational effectiveness of military units operating in potentially hazardous environments.

What is the historical spending trend for NBC reconnaissance systems within the Department of Defense?

Historical spending on Nuclear, Biological, and Chemical (NBC) reconnaissance systems within the Department of Defense (DoD) has been consistent, reflecting the enduring nature of these threats and the military's commitment to protecting its personnel. While specific aggregate spending figures for NBC reconnaissance systems alone are not readily available in public databases, this category of equipment falls under broader procurement umbrellas such as Chemical and Biological Defense (CBD) programs, C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance), and specialized ground vehicle systems. Funding for these systems is typically driven by threat assessments, technological advancements, and the need to replace aging equipment. The DoD consistently allocates significant resources to maintain and modernize its NBC defense capabilities, including reconnaissance platforms, detection equipment, and protective gear, often through multi-year procurement contracts and research and development initiatives.

What does the 'Increment 2' designation imply about the program's evolution?

The 'Increment 2' designation for the Joint Nuclear Biological Chemical Reconnaissance System (JNBCRS 2) implies that this contract represents a subsequent phase or upgrade to an existing or previously developed system (Increment 1). In defense acquisition, increments typically denote distinct blocks of capability or functionality. Increment 1 likely established a baseline capability, and Increment 2 was procured to introduce enhanced features, improved performance, new technologies, or to address deficiencies identified in the initial version. This phased approach allows the military to field capabilities sooner and to incorporate advancements over time, rather than waiting for a single, large, and potentially lengthy development cycle. It suggests a program that is evolving to meet changing operational requirements and technological opportunities in the critical field of NBC defense.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Analytical Laboratory Instrument Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911SR08R0001

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7055 TROY HILL DR STE B, ELKRIDGE, MD, 21075

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $182,429,966

Exercised Options: $119,139,700

Current Obligation: $105,808,239

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline