DoD's $47.5M chemical detector contract to Smiths Detection Inc. awarded via full and open competition

Contract Overview

Contract Amount: $47,459,480 ($47.5M)

Contractor: Smiths Detection Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-07

End Date: 2026-03-26

Contract Duration: 2,757 days

Daily Burn Rate: $17.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: NEXT GENERATION CHEMICAL DETECTOR 1 AEROSOL AND VAPOR CHEMICAL DETECTOR EFFORT.

Place of Performance

Location: EDGEWOOD, HARFORD County, MARYLAND, 21040

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $47.5 million to SMITHS DETECTION INC. for work described as: NEXT GENERATION CHEMICAL DETECTOR 1 AEROSOL AND VAPOR CHEMICAL DETECTOR EFFORT. Key points: 1. Contract awarded to a single, established provider with a history in defense systems. 2. The contract type, Cost Plus Incentive Fee, suggests performance incentives are tied to cost targets. 3. A significant duration of 2757 days indicates a long-term need for these detection systems. 4. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector. 5. The contract's value is substantial, reflecting the critical nature of chemical detection capabilities. 6. The award was made under full and open competition, implying a broad search for qualified bidders.

Value Assessment

Rating: good

The contract's total value of $47.5 million over its duration suggests a significant investment in advanced detection technology. Benchmarking this against similar large-scale defense procurements for specialized equipment is challenging without more granular data on unit costs and specific technological capabilities. However, the Cost Plus Incentive Fee (CPIF) structure indicates an attempt to manage costs by incentivizing the contractor to meet or beat targets, which can be a value-for-money indicator if managed effectively. The relatively low number of bids (4) for a contract of this magnitude might warrant further investigation into market dynamics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Four bids were received, suggesting a moderate level of competition for this specialized defense requirement. While four bidders is not a large number, it indicates that the market for advanced chemical detection systems is not entirely concentrated, allowing for some price discovery and selection of the most advantageous offer.

Taxpayer Impact: The full and open competition process is generally favorable to taxpayers as it aims to secure the best value by encouraging multiple companies to compete, potentially driving down prices and improving service offerings.

Public Impact

The Department of Defense (specifically the Department of the Army) is the primary beneficiary, acquiring critical chemical detection capabilities. The contract will deliver advanced aerosol and vapor chemical detectors, enhancing force protection and situational awareness. The geographic impact is likely global, supporting military operations wherever deployed. Workforce implications may include specialized manufacturing and technical support roles within the contractor's organization and potentially at military installations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Incentive Fee (CPIF) contract type can lead to cost overruns if not closely monitored, as the government bears most of the costs plus a fee and potential incentives.
With only four bids received, there's a possibility that competition was not as robust as it could have been, potentially impacting the final price.
The long contract duration (2757 days) increases the risk of technological obsolescence or changing operational requirements over time.

Positive Signals

Awarded under full and open competition, indicating a broad market search and potential for competitive pricing.
The contractor, Smiths Detection Inc., is a known entity in the defense and security sector, suggesting experience and capability.
The CPIF structure includes incentives, which can drive contractor performance and cost efficiency if structured and managed well.

Sector Analysis

The market for chemical, biological, radiological, and nuclear (CBRN) detection equipment is a specialized segment within the broader defense and security industry. This sector is characterized by high technological barriers to entry, stringent performance requirements, and significant government procurement. Companies operating in this space often have deep R&D capabilities and long-standing relationships with defense agencies. Spending in this area is driven by evolving threat landscapes and the need for advanced protective and detection measures for military personnel and civilian populations. Comparable spending benchmarks would typically involve other large-scale procurements for advanced sensor technology or specialized defense systems.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'sb': false. The prime contractor, Smiths Detection Inc., is a large corporation. While the contract itself is not set aside for small businesses, there may be opportunities for small businesses to participate as subcontractors to Smiths Detection Inc. The extent of small business subcontracting would depend on the prime contractor's procurement practices and the specific components or services required for the chemical detectors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The Cost Plus Incentive Fee (CPIF) structure necessitates close monitoring of costs and performance against established targets to ensure value for money. Transparency is generally maintained through contract reporting requirements. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Chemical Agent Monitoring Systems
Biological Detection Systems
Explosive Detection Equipment
Military Chemical Warfare Defense
Homeland Security Detection Technology

Risk Flags

Potential for technological obsolescence due to long contract duration.
Cost control risks inherent in CPIF contracts require diligent oversight.
Moderate competition level (4 bidders) may warrant further analysis of market dynamics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.5 million to SMITHS DETECTION INC.. NEXT GENERATION CHEMICAL DETECTOR 1 AEROSOL AND VAPOR CHEMICAL DETECTOR EFFORT.

Who is the contractor on this award?

The obligated recipient is SMITHS DETECTION 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 $47.5 million.

What is the period of performance?

Start: 2018-09-07. End: 2026-03-26.

What is the specific technological advancement or capability that this 'NEXT GENERATION CHEMICAL DETECTOR' offers compared to previous systems?

The provided data does not detail the specific technological advancements of the 'NEXT GENERATION CHEMICAL DETECTOR'. However, contracts of this nature typically aim to improve upon existing systems by offering enhanced sensitivity, faster detection times, broader spectrum identification of chemical agents (aerosol and vapor), improved portability, reduced false alarm rates, and better network integration for real-time threat assessment. The 'next generation' designation implies a leap in capability, likely incorporating newer sensor technologies, improved data processing, and potentially AI-driven analysis to identify and classify threats more effectively and rapidly than legacy equipment.

How does the Cost Plus Incentive Fee (CPIF) structure work in practice for this contract, and what are the key performance metrics tied to the incentives?

In a Cost Plus Incentive Fee (CPIF) contract, the final profit is adjusted based on whether the final costs are below or above the negotiated target costs. The government agrees to pay the contractor's allowable costs plus a fee, which is initially targeted. If the contractor achieves certain performance objectives (e.g., cost savings, schedule adherence, technical performance), the fee increases; if they underperform, the fee decreases, up to a ceiling. For this contract, key performance metrics likely relate to the detector's ability to accurately identify specific chemical agents, detection speed, reliability (mean time between failures), operational range, and potentially the cost efficiency of production or deployment. The specific metrics and incentive/disincentive formulas would be detailed in the contract's special provisions.

What is the historical spending pattern for chemical detection systems by the Department of Defense, and how does this contract's value compare?

Historical spending on chemical detection systems by the Department of Defense (DoD) fluctuates based on perceived threats, technological advancements, and strategic priorities. While specific aggregate figures for 'chemical detection systems' are not provided in the data, the DoD consistently invests billions annually in research, development, procurement, and sustainment of various defense equipment, including sophisticated sensor and detection technologies. A single contract valued at $47.5 million for next-generation detectors represents a significant, but not unprecedented, investment for a critical capability. It suggests a focused effort to modernize or expand the inventory of these vital systems, likely reflecting ongoing concerns about chemical warfare threats or the need for enhanced force protection in complex environments.

What are the potential risks associated with a long-duration contract (2757 days) for advanced technology like chemical detectors?

Long-duration contracts for advanced technology carry several inherent risks. Firstly, technological obsolescence is a major concern; the threat landscape and detection technologies evolve rapidly, meaning the 'next generation' system procured today might be surpassed by newer innovations before the contract's end. Secondly, requirements can change due to shifting geopolitical situations or evolving military strategies, potentially rendering aspects of the procured system less relevant or requiring costly modifications. Thirdly, maintaining contractor focus and performance over an extended period can be challenging, increasing the risk of complacency or performance degradation. Finally, unforeseen cost increases due to inflation, supply chain disruptions, or extended sustainment needs can impact the overall value proposition of a long-term commitment.

Given the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code, how specialized is the market for these chemical detectors?

The NAICS code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' indicates a highly specialized segment of the manufacturing industry. Companies operating under this code typically produce complex systems requiring advanced engineering, precision manufacturing, and often integration with other sophisticated technologies. For chemical detectors, this specialization means the market is likely served by a limited number of firms with the requisite expertise in sensor technology, chemical analysis, materials science, and ruggedized design for military applications. This specialization contributes to higher unit costs and potentially limits the pool of competitive bidders, as seen with the four bids received for this contract.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911SR17R0005

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 2202 LAKESIDE BLVD, EDGEWOOD, MD, 21040

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $49,567,210

Exercised Options: $48,219,934

Current Obligation: $47,459,480

Actual Outlays: $698,966

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline