DoD's $15.4M contract for communications equipment manufacturing awarded to Johnson Controls, Inc

Contract Overview

Contract Amount: $15,409,338 ($15.4M)

Contractor: Johnson Controls, Inc

Awarding Agency: Department of Defense

Start Date: 2014-07-24

End Date: 2032-01-31

Contract Duration: 6,400 days

Daily Burn Rate: $2.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ESPC, IGF::OT::IGF

Plain-Language Summary

Department of Defense obligated $15.4 million to JOHNSON CONTROLS, INC for work described as: ESPC, IGF::OT::IGF Key points: 1. Value for money appears fair given the long duration and fixed-price nature, though specific performance metrics are not detailed. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a long contract duration and potential for scope creep. 4. Performance context is limited without specific deliverables or success metrics. 5. Sector positioning places this within the broader defense communications equipment manufacturing industry.

Value Assessment

Rating: fair

The total contract value of $15.4 million over approximately 17.5 years (July 2014 - January 2032) suggests an average annual spend of roughly $880,000. Without specific details on the equipment or services provided, a direct comparison to similar contracts is challenging. However, the firm fixed-price structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the scope is well-defined. The long duration may also indicate a need for sustained support or a strategic investment in a particular technology.

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 bids. The number of bidders is not specified, but this method generally fosters a competitive environment, which can lead to more favorable pricing for the government. The agency's decision to use full and open competition suggests confidence in the market's ability to provide the required goods or services.

Taxpayer Impact: A full and open competition process is generally beneficial for taxpayers as it maximizes the potential for cost savings through competitive bidding, ensuring the government receives the best possible value.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical communications equipment. The contract supports the manufacturing and potentially the maintenance of communications equipment essential for military operations. Geographic impact is likely concentrated around military installations or facilities where this equipment is deployed. Workforce implications may include jobs in manufacturing, engineering, and logistics related to defense contracting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 17 years) increases the risk of obsolescence or the need for significant modifications.
Lack of detailed performance metrics makes it difficult to assess the contractor's effectiveness and value delivery.
The specific nature of 'Other Communications Equipment Manufacturing' is broad and could encompass a wide range of technologies with varying lifecycles.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Awarded through full and open competition, suggesting a competitive pricing environment.
Long-term award indicates a sustained need and potential for stable supply.

Sector Analysis

This contract falls within the broader defense industrial base, specifically the manufacturing of communications equipment. The North American Industry Classification System (NAICS) code 334290 covers 'Other Communications Equipment Manufacturing,' which includes products like radio and television broadcasting and wireless communications equipment. The defense sector often requires specialized, high-reliability equipment, and spending in this area can be substantial, driven by technological advancements and operational requirements. Benchmarking this contract's value is difficult without knowing the exact equipment, but the total value over its lifespan is moderate for a defense-related manufacturing contract.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). There is no information provided regarding subcontracting plans or performance. Therefore, the direct impact on the small business ecosystem is likely minimal unless Johnson Controls, Inc. voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. Specific oversight mechanisms would depend on the agency's internal policies, including contract administration, performance reviews, and potentially audits. Transparency is facilitated by the contract award data being publicly available, but detailed operational oversight information is usually internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Communications Systems
Military Electronics Manufacturing
Federal Communications Equipment Procurement
Department of Defense IT and Communications

Risk Flags

Long contract duration may lead to technology obsolescence.
Lack of specific performance metrics hinders value assessment.
Broad NAICS code requires further clarification on equipment specifics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.4 million to JOHNSON CONTROLS, INC. ESPC, IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is JOHNSON CONTROLS, 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 $15.4 million.

What is the period of performance?

Start: 2014-07-24. End: 2032-01-31.

What specific types of communications equipment are being manufactured under this contract?

The provided data indicates the contract falls under NAICS code 334290, 'Other Communications Equipment Manufacturing.' This is a broad category that can include a wide array of products such as radio and television broadcasting and wireless communications equipment, network infrastructure components, and specialized military communication devices. Without further details from the contract's statement of work or associated documentation, the precise nature of the equipment remains unspecified. This lack of specificity makes it challenging to assess the technological relevance, potential for obsolescence, and the true value proposition of the contract.

How does the $15.4 million total contract value compare to similar defense communications equipment procurements?

Comparing the $15.4 million total contract value requires context regarding the specific equipment and duration. The contract spans from July 24, 2014, to January 31, 2032, a period of over 17 years. This long duration suggests either a need for ongoing supply, long-term support, or a strategic, phased acquisition. Annualized, the spending averages approximately $880,000. Defense procurements for communications equipment can range from tens of millions to billions of dollars, depending on the scale, technological sophistication, and quantity. This contract appears to be of moderate size when viewed over its entire lifespan, particularly if it involves specialized or niche equipment rather than mass-produced items.

What are the primary risks associated with a contract of this duration (over 17 years)?

The primary risks associated with a contract spanning over 17 years are technological obsolescence, market shifts, and potential contractor performance degradation. Technology in the communications sector evolves rapidly; equipment procured today may be outdated or unsupported long before the contract's end date. Market shifts could introduce more cost-effective or superior alternatives. Furthermore, maintaining consistent performance and quality from a contractor over such an extended period can be challenging, potentially leading to increased oversight needs or contract modifications. The firm fixed-price nature mitigates cost overrun risk for the government but does not eliminate risks related to relevance and performance.

What does the 'FULL AND OPEN COMPETITION' designation imply for the government and taxpayers?

The 'FULL AND OPEN COMPETITION' designation signifies that the Department of Defense sought bids from all responsible sources capable of meeting the contract requirements. This approach is generally considered the gold standard for federal procurement because it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. For taxpayers, this means the government is likely obtaining the required communications equipment at a price that reflects market competition, rather than being limited to a single provider or a restricted set of vendors. It promotes efficiency and value for money.

What is the significance of the contract type being 'FIRM FIXED PRICE'?

A 'FIRM FIXED PRICE' (FFP) contract type means that the price is set and not subject to adjustment based on the contractor's cost experience. This places the primary risk of cost overruns on the contractor. For the government, FFP contracts offer budget certainty and predictability, as the total cost is known upfront, assuming the scope of work is clearly defined. This is generally advantageous for the government, especially when the scope of work is well-understood and stable. It incentivizes the contractor to control costs efficiently to maximize profit.

How does the NAICS code 334290 ('Other Communications Equipment Manufacturing') inform our understanding of this contract?

The NAICS code 334290 provides a classification for the type of manufacturing activity involved. It encompasses the production of various communication devices beyond those covered in more specific categories, such as radio and television broadcasting equipment or telephone apparatus. This suggests the contract could involve specialized or custom-manufactured communication systems tailored to the Department of Defense's unique operational needs. Understanding this code helps contextualize the contract within the broader industrial landscape and highlights the potential for advanced or niche technological requirements, which often come with higher costs and longer development cycles compared to mass-produced commercial items.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Johnson Controls Building Solutions LLC

Address: 507 E. MICHIGAN STREET, MILWAUKEE, WI, 53201

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,409,338

Exercised Options: $15,409,338

Current Obligation: $15,409,338

Actual Outlays: $260,511

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS07F7823C

IDV Type: FSS

Timeline