Teledyne, Inc. awarded $30.35M contract for aircraft manufacturing by the Department of the Air Force

Contract Overview

Contract Amount: $30,350,000 ($30.4M)

Contractor: Teledyne, Inc

Awarding Agency: Department of Defense

Start Date: 2003-01-15

End Date: 2008-03-31

Contract Duration: 1,902 days

Daily Burn Rate: $16.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.4 million to TELEDYNE, INC for work described as: Key points: 1. Contract awarded as a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. The duration of the contract (1902 days) suggests a long-term need for the specified aircraft manufacturing services. 4. The contract type is 'COST NO FEE', indicating that the government reimburses costs but does not pay a fee on top of those costs. 5. The award was made to a single entity, Teledyne, Inc., suggesting a sole-source or limited competition scenario. 6. The North American Industry Classification System (NAICS) code 336411 points to a specialized segment of the aircraft manufacturing industry.

Value Assessment

Rating: questionable

The contract's value of $30.35 million over approximately five years requires careful benchmarking against similar aircraft manufacturing services. As a 'COST NO FEE' contract awarded without competition, it is difficult to assess if the pricing reflects competitive market rates or represents a fair value for the government. Without comparative data from competed contracts or established benchmarks for this specific type of aircraft manufacturing, a definitive value-for-money assessment is challenging. The lack of a fee structure might imply a focus on cost recovery rather than profit, but this does not inherently guarantee optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a delivery order under a larger contract that was not competed. This indicates that the procurement strategy relied on a pre-existing agreement, likely established through a previous competitive process or awarded on a sole-source basis. The absence of a new competition for this specific delivery order means that Teledyne, Inc. was the only bidder, limiting the opportunity for price discovery and potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: The lack of competition for this $30.35 million award means taxpayers may not have benefited from the most competitive pricing. Without a bidding process, there is less pressure on the contractor to offer the lowest possible price, potentially resulting in a higher overall expenditure for the government.

Public Impact

The primary beneficiary of this contract is the Department of the Air Force, which receives aircraft manufacturing services. The services delivered are related to aircraft manufacturing, supporting military readiness and operational capabilities. The geographic impact is centered in California, where Teledyne, Inc. is located and likely performs the work. The contract supports jobs within the aerospace and defense manufacturing sector, specifically at Teledyne, Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for this delivery order could lead to suboptimal pricing.
The 'COST NO FEE' contract type requires diligent oversight to ensure costs are reasonable and allocable.
The long contract duration necessitates ongoing performance monitoring to ensure continued value.
Reliance on a single awardee for aircraft manufacturing may pose supply chain risks if not managed proactively.

Positive Signals

Teledyne, Inc. is an established entity in the aerospace and defense sector.
The contract is a delivery order under a potentially larger IDIQ, suggesting a structured procurement approach.
The 'COST NO FEE' structure may indicate a focus on cost control by the government.

Sector Analysis

The aircraft manufacturing sector (NAICS 336411) is a highly specialized and capital-intensive industry within the broader aerospace and defense market. This contract falls within a segment focused on the production of aircraft, likely for military applications given the Department of Defense agency. The market is characterized by high barriers to entry, stringent regulatory requirements, and significant government procurement. Comparable spending benchmarks would typically involve analyzing other large-scale aircraft production contracts awarded by the military, considering factors like aircraft type, complexity, and volume.

Small Business Impact

There is no indication that this contract involved a small business set-aside. As a large contract awarded to Teledyne, Inc., a significant entity in the aerospace sector, the primary focus is likely on prime contract performance. Subcontracting opportunities for small businesses may exist within Teledyne's supply chain, but this contract does not appear to be directly structured to promote small business participation as a primary objective.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. Given the 'COST NO FEE' structure, rigorous auditing of incurred costs by the Defense Contract Audit Agency (DCAA) would be expected. Transparency is facilitated through contract award databases, but detailed performance metrics and cost breakdowns are typically not publicly disclosed. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Manufacturing Contracts
Department of Defense Procurement
Air Force Aviation Programs
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts
Cost-Reimbursement Contracts

Risk Flags

Lack of Competition
Cost-Reimbursement Contract Type
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.4 million to TELEDYNE, INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is TELEDYNE, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $30.4 million.

What is the period of performance?

Start: 2003-01-15. End: 2008-03-31.

What is the specific type of aircraft being manufactured under this contract, and what is its intended use?

The provided data does not specify the exact type of aircraft being manufactured. NAICS code 336411 covers 'Aircraft Manufacturing,' which is broad. Given the awarding agency is the Department of Defense and the specific service is 'Aircraft Manufacturing,' it is highly probable that these are military aircraft or components thereof. The intended use would likely be for air combat, transport, surveillance, or training missions within the U.S. Air Force's operational requirements. Further details would require access to the contract's statement of work or associated documentation.

Can the 'COST NO FEE' contract type be considered advantageous or disadvantageous for the government in this context?

The 'COST NO FEE' (Cost, No Fee) contract type is a variation of a cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This can be advantageous for the government when the contractor's primary motivation is not profit, such as in certain non-profit or government-owned contractor-operated facilities, or when the government has a strong interest in ensuring cost control without incentivizing profit margins. However, it can be disadvantageous if it reduces the contractor's incentive to control costs aggressively, as there is no direct profit motive tied to efficiency. It also requires robust government oversight to ensure costs are reasonable and allocable, as the government bears all the cost risk.

What are the potential risks associated with awarding a $30.35 million contract without competition?

Awarding a contract of this magnitude without competition carries several risks. Primarily, the government may not achieve the best possible price due to the absence of market forces driving down costs. This lack of competition can lead to inflated prices and reduced value for taxpayer money. Furthermore, it can stifle innovation and efficiency, as the incumbent contractor may face less pressure to improve processes or offer better solutions. There's also a risk of complacency and a potential for the contractor to become indispensable, making future procurements difficult and potentially more expensive. Finally, it raises concerns about fairness and equal opportunity for other capable businesses in the market.

How does the duration of 1902 days (approximately 5.2 years) impact the risk and management of this contract?

A contract duration of 1902 days signifies a long-term commitment, which introduces specific risks and management considerations. For the government, it implies a sustained need for the aircraft manufacturing services, but also requires consistent program oversight and budget allocation over an extended period. Risks include potential obsolescence of technology, changes in operational requirements, and the contractor's ability to maintain performance and quality over time. Effective management necessitates regular performance reviews, proactive risk mitigation strategies, and potentially incorporating contract modifications to adapt to evolving needs or technological advancements. It also means that any inefficiencies or cost overruns incurred early in the contract can have a magnified impact over its lifespan.

What is the significance of the 'Aircraft Manufacturing' NAICS code (336411) in understanding this contract's scope?

The NAICS code 336411, 'Aircraft Manufacturing,' specifically identifies the industry sector related to the design, development, and production of aircraft, including airplanes, helicopters, and related parts. This code signifies that the contract is for the physical creation or assembly of aircraft, rather than services like maintenance, repair, or modification, although there can be overlap. Understanding this code helps categorize the contract within the broader defense industrial base and signals the specialized nature of the work, requiring advanced manufacturing capabilities, skilled labor, and adherence to rigorous quality and safety standards typical of the aerospace industry.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Contractor Details

Parent Company: ATI Inc. (UEI: 949262737)

Address: 17066 GOLDENTOP ROAD, SAN DIEGO, CA, 92127

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365703G4306

IDV Type: IDC

Timeline