DoD awards $11.9M sole-source contract for advanced optical systems to Teledyne FLIR Defense

Contract Overview

Contract Amount: $11,916,694 ($11.9M)

Contractor: Teledyne Flir Defense, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-01-13

End Date: 2026-12-31

Contract Duration: 1,813 days

Daily Burn Rate: $6.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 1. THIS IS A FFP CONTRACT UNDER FMS REQUIREMENT FOR THE GOVERNMENT OF LITHUANIA UNDER FMS CASES LH-B0-UDG. 2. THIS CONTRACT IS SOLE-SOURCE TO FLIR SYSTEMS INC. FOR TACFLIR 230/VIK/MAST/DISPLAY, INSTALLATION AND TRAINING.

Place of Performance

Location: NORTH BILLERICA, MIDDLESEX County, MASSACHUSETTS, 01862

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $11.9 million to TELEDYNE FLIR DEFENSE, INC. for work described as: 1. THIS IS A FFP CONTRACT UNDER FMS REQUIREMENT FOR THE GOVERNMENT OF LITHUANIA UNDER FMS CASES LH-B0-UDG. 2. THIS CONTRACT IS SOLE-SOURCE TO FLIR SYSTEMS INC. FOR TACFLIR 230/VIK/MAST/DISPLAY, INSTALLATION AND TRAINING. Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Fixed-price contract structure shifts performance risk to the contractor. 3. Long-term contract duration (over 5 years) may impact price competitiveness over time. 4. Specialized nature of TACFLIR systems suggests limited market alternatives. 5. Contract supports foreign military sales, indicating international security cooperation. 6. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract's value of $11.9 million for specialized optical systems appears reasonable given the sole-source nature and the advanced technology involved. However, without competitive bidding, it is difficult to benchmark against market alternatives or assess if the government secured the best possible price. The firm-fixed-price structure provides cost certainty but may not reflect the most economical outcome compared to a competed contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Teledyne FLIR Defense, Inc. This means there was no open competition to solicit bids from multiple vendors. The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one vendor can meet the requirement. The lack of competition means potential cost savings from a bidding process were not realized.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the government could not leverage multiple offers to drive down costs.

Public Impact

The government of Lithuania will benefit from enhanced surveillance and tactical capabilities through the TACFLIR systems. Services include the provision, installation, and training for advanced optical and imaging systems. The contract supports U.S. foreign military sales objectives, strengthening alliances. The contract is managed by the Department of the Army, utilizing its procurement expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Long contract duration could lead to price escalation if not managed carefully.
Lack of small business participation may reduce opportunities for smaller, innovative firms in this specialized sector.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract supports a critical foreign military sales requirement, bolstering international security.
Teledyne FLIR Defense is a known provider of specialized defense technologies.

Sector Analysis

This contract falls within the Optical Instrument and Lens Manufacturing sector, a niche within the broader defense industrial base. This sector is characterized by high technological barriers to entry and often involves specialized, high-value components. Spending in this area is driven by defense modernization efforts and international security cooperation. Comparable spending benchmarks are difficult to establish due to the specialized nature of the TACFLIR systems and the sole-source award.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Given the specialized nature of the TACFLIR systems and the sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal. Opportunities for small businesses would typically arise if the prime contractor engaged them for specific components or services, which is not explicitly stated here.

Oversight & Accountability

The Department of the Army is responsible for overseeing this contract. As a definitive contract, it is subject to standard procurement regulations and oversight. Transparency is provided through contract databases, though the sole-source nature limits public insight into the negotiation process. The Inspector General's office may conduct audits or investigations if specific concerns arise regarding performance or cost.

Related Government Programs

Foreign Military Sales Program
Tactical Surveillance Systems
Defense Optics and Imaging

Risk Flags

Sole-source award
Potential for overpricing
Long contract duration
Limited small business involvement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to TELEDYNE FLIR DEFENSE, INC.. 1. THIS IS A FFP CONTRACT UNDER FMS REQUIREMENT FOR THE GOVERNMENT OF LITHUANIA UNDER FMS CASES LH-B0-UDG. 2. THIS CONTRACT IS SOLE-SOURCE TO FLIR SYSTEMS INC. FOR TACFLIR 230/VIK/MAST/DISPLAY, INSTALLATION AND TRAINING.

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 (Department of the Army).

What is the total obligated amount?

The obligated amount is $11.9 million.

What is the period of performance?

Start: 2022-01-13. End: 2026-12-31.

What is the specific capability provided by the TACFLIR 230/VIK/MAST/DISPLAY system?

The TACFLIR 230/VIK/MAST/DISPLAY system is an advanced electro-optical and infrared (EO/IR) surveillance system designed for mobile platforms. It typically integrates high-definition cameras, thermal imagers, laser rangefinders, and other sensors to provide real-time situational awareness and target acquisition capabilities. The 'MAST' likely refers to a Mast-Mounted system, allowing for elevated observation. This technology is crucial for reconnaissance, border security, and force protection operations, enabling users to detect, identify, and track targets in various environmental conditions, day or night.

How does the $11.9 million contract value compare to similar sole-source awards for advanced optical systems?

Benchmarking sole-source awards for highly specialized systems like the TACFLIR is challenging due to the lack of direct comparables. However, similar sole-source contracts for advanced EO/IR systems, particularly those supporting foreign military sales or involving unique technological integration, can range from several million to tens of millions of dollars. The $11.9 million figure for a comprehensive package including systems, installation, and training appears within the expected range for such niche, high-technology defense procurements. Without competitive bids, a precise value-for-money assessment against market alternatives remains difficult.

What are the primary risks associated with this sole-source, firm-fixed-price contract?

The primary risks for the government in this sole-source, firm-fixed-price contract include potential overpayment due to the absence of competitive pricing, and contractor performance risk if Teledyne FLIR Defense encounters unforeseen technical or production challenges. While FFP shifts cost overrun risk to the contractor, the initial price might be inflated. Furthermore, the long duration (ending in 2026) increases the risk of technology obsolescence or the emergence of superior, more cost-effective alternatives during the contract period. Dependence on a single supplier also poses a long-term strategic risk.

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

Teledyne FLIR Defense, Inc. (formerly FLIR Systems, Inc.) has a well-established track record of supplying advanced electro-optical and infrared systems to various government agencies, including the Department of Defense, for both domestic and international applications. They are known for their expertise in thermal imaging, surveillance, and reconnaissance technologies. Past contracts have often involved similar systems for ground vehicles, maritime platforms, and aerial applications. While specific contract performance details are often sensitive, their continued awards suggest a generally satisfactory performance history and capability to meet demanding defense requirements.

How does this contract align with broader U.S. defense export and alliance-building strategies?

This contract directly aligns with U.S. foreign military sales (FMS) objectives, which aim to enhance the security capabilities of allies and partners, thereby promoting regional stability and U.S. strategic interests. By providing advanced defense technology like the TACFLIR system to Lithuania, the U.S. strengthens its NATO ally's defense posture and interoperability. Such sales also support the U.S. defense industrial base by providing revenue streams for defense contractors. This specific sale contributes to the broader strategy of bolstering European security in response to geopolitical challenges.

What are the potential implications of this contract on future spending for similar systems?

This contract establishes a baseline for future procurements of TACFLIR systems or comparable technologies for Lithuania and potentially other FMS partners. However, the sole-source nature means this price may not represent the most competitive market rate. Future FMS cases involving these systems could continue to be sole-sourced if FLIR's technology remains unique or if urgency dictates. Alternatively, if competitors emerge or if the U.S. government seeks greater cost efficiency, future procurements might explore competitive bidding processes, potentially leading to different pricing structures and vendor selections.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W91CRB21R5044

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 25 ESQUIRE RD, NORTH BILLERICA, MA, 01862

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: $11,916,694

Exercised Options: $11,916,694

Current Obligation: $11,916,694

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline