DoD's $46.5M hardware upgrade contract awarded to Raydon Corporation shows fair value with 1 bid

Contract Overview

Contract Amount: $46,556,000 ($46.6M)

Contractor: Raydon Corporation

Awarding Agency: Department of Defense

Start Date: 2012-09-27

End Date: 2014-09-30

Contract Duration: 733 days

Daily Burn Rate: $63.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: VCOT C3.1 TO C4 HARDWARE UPGRADE

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $46.6 million to RAYDON CORPORATION for work described as: VCOT C3.1 TO C4 HARDWARE UPGRADE Key points: 1. The contract's value appears reasonable given the scope of a hardware upgrade for the Department of Defense. 2. With only one bid received, the competition dynamics suggest potential limitations in market engagement. 3. The firm-fixed-price contract type helps mitigate cost overrun risks for the government. 4. Performance duration of 733 days indicates a substantial project timeline. 5. This contract falls under the 'Other Professional Equipment and Supplies Merchant Wholesalers' NAICS code. 6. The award was made as a delivery order against a larger contract vehicle.

Value Assessment

Rating: fair

Benchmarking the value of this $46.5 million contract is challenging without specific details on the hardware being upgraded. However, given the firm-fixed-price nature, the government has a defined cost ceiling. The single bid received raises questions about whether the pricing reflects competitive market rates or if the government secured the best possible value. Further analysis would require understanding the specific technical requirements and comparing them to similar procurements for comparable hardware.

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. However, only one bid was received. This situation could imply that the market for this specific hardware upgrade is limited, or that other potential bidders chose not to participate for various reasons. The lack of multiple bids may have limited the government's ability to achieve optimal price discovery through robust competition.

Taxpayer Impact: A single bid in a full and open competition scenario means taxpayers may not have benefited from the cost savings typically driven by multiple competing offers. The government may have paid a higher price than if more companies had vied for the contract.

Public Impact

The Department of the Army is the primary beneficiary, receiving upgraded hardware. The services delivered involve the provision and upgrade of specific hardware components. The contract is geographically located in Virginia, impacting the local economy and workforce. The workforce implications are tied to the manufacturing, installation, and support of the upgraded hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher prices for taxpayers.
Lack of multiple bids could indicate potential market concentration or barriers to entry for other firms.
The specific nature of the hardware upgrade requires detailed technical understanding to fully assess value.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Awarded under full and open competition, adhering to procurement regulations.
The contract was a delivery order, suggesting it was part of a pre-established contracting vehicle.

Sector Analysis

This contract falls within the broader 'Professional Equipment and Supplies Merchant Wholesalers' sector, which includes a wide range of goods. The Department of Defense is a significant purchaser of specialized equipment, and contracts like this are crucial for maintaining operational readiness. The market for such hardware can be niche, with a limited number of manufacturers and suppliers capable of meeting stringent military specifications. Comparable spending benchmarks would depend heavily on the specific type of hardware procured.

Small Business Impact

There is no indication that this contract included small business set-asides, as the 'sb' field is false. Similarly, the 'ss' field is also false, meaning it was not a small business set-aside. This suggests that the procurement was open to all responsible sources without specific targets for small business participation. Subcontracting opportunities for small businesses would depend on Raydon Corporation's internal policies and the nature of the work required for the hardware upgrade.

Oversight & Accountability

The contract was awarded as a delivery order, implying it falls under a larger contract vehicle that likely has its own oversight mechanisms. The firm-fixed-price contract type offers a degree of accountability by setting a ceiling on costs. Transparency would be enhanced by public availability of the contract details and performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or award.

Related Government Programs

Department of Defense Hardware Procurements
Professional Equipment and Supplies
Military Technology Upgrades
Army Logistics Modernization

Risk Flags

Limited competition (single bid)
Potential for non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.6 million to RAYDON CORPORATION. VCOT C3.1 TO C4 HARDWARE UPGRADE

Who is the contractor on this award?

The obligated recipient is RAYDON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $46.6 million.

What is the period of performance?

Start: 2012-09-27. End: 2014-09-30.

What specific type of hardware was upgraded under this contract, and what are its technical specifications?

The provided data indicates the contract is for 'VCOT C3.1 TO C4 HARDWARE UPGRADE' and falls under NAICS code 423490 (Other Professional Equipment and Supplies Merchant Wholesalers). However, the specific technical details of the hardware, such as its function, components, and upgrade requirements (e.g., from C3.1 to C4 standards), are not detailed in the provided summary. This level of specificity is crucial for a thorough technical and value assessment. Without this information, it's difficult to determine if the $46.5 million price tag is justified by the technological advancement or performance improvement delivered.

How does the $46.5 million contract value compare to similar hardware upgrade contracts within the Department of Defense?

Comparing this $46.5 million contract value requires access to a database of similar Department of Defense hardware upgrade procurements. Factors such as the type of hardware, its intended use (e.g., command and control, communications, intelligence), the scope of the upgrade (e.g., component replacement, system overhaul, software integration), and the number of units involved would be critical for a meaningful comparison. Given that only one bid was received, it's difficult to ascertain if this price represents a competitive market rate or if it's potentially inflated due to limited competition. A benchmark against contracts for similar upgrades, considering factors like inflation and technological obsolescence, would be necessary.

What were the reasons for only one bid being submitted for this full and open competition contract?

The reasons for a single bid in a full and open competition can be multifaceted. Potential explanations include: a highly specialized or niche market where only one company possesses the required technology, manufacturing capability, or security clearances; stringent technical requirements that inadvertently screened out potential competitors; a perceived low profit margin or high risk associated with the contract, discouraging other firms; or the contract being awarded as a delivery order against a larger contract vehicle, where the primary competition may have occurred earlier. Without further information from the contracting agency, the exact cause remains speculative.

What is Raydon Corporation's track record with Department of Defense contracts, particularly for hardware upgrades?

Information regarding Raydon Corporation's specific track record with Department of Defense contracts for hardware upgrades is not detailed in the provided data. A comprehensive assessment would involve reviewing their past performance on similar contracts, including on-time delivery, adherence to budget, quality of work, and any past performance issues or awards. Examining their history with the Department of the Army and other defense agencies would provide context for their capability and reliability in executing complex hardware upgrade projects.

What are the potential risks associated with a single-bidder scenario in a full and open competition?

The primary risk associated with a single-bidder scenario in a full and open competition is the potential for reduced value for the government. Without competing offers, the government may not achieve the lowest possible price, potentially leading to overspending. There's also a risk that the single bidder may have less incentive to perform at the highest level, knowing they are the sole provider. Furthermore, it raises questions about the effectiveness of the solicitation process and whether the market was adequately reached or if barriers to entry prevented broader participation, which could indicate systemic issues in how contracts are structured or advertised.

How does the firm-fixed-price contract type mitigate risks for the government in this hardware upgrade?

The firm-fixed-price (FFP) contract type is designed to shift the majority of cost risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This provides the government with cost certainty and predictability, as the total expenditure is known upfront, assuming no contract modifications or change orders. It incentivizes the contractor to manage their costs efficiently to maximize profit. For a hardware upgrade project like this, where the scope is well-defined, FFP is generally considered a suitable contract type to control government spending.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Other Professional Equipment and Supplies Merchant Wholesalers

Product/Service Code: TRAINING AIDS AND DEVICES

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

Address: 210 FENTRESS BLVD, DAYTONA BEACH, FL, 32114

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: $46,556,000

Exercised Options: $46,556,000

Current Obligation: $46,556,000

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $2,387,871

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS02F0154R

IDV Type: FSS

Timeline