Gentex Corp awarded $18.6M for JSF Variant Integration, a significant R&D investment

Contract Overview

Contract Amount: $18,650,121 ($18.7M)

Contractor: Gentex Corp

Awarding Agency: Department of Defense

Start Date: 2009-06-29

End Date: 2013-12-31

Contract Duration: 1,646 days

Daily Burn Rate: $11.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: R&D

Official Description: JSF VARIANT INTEGRATION

Place of Performance

Location: RANCHO CUCAMONGA, SAN BERNARDINO County, CALIFORNIA, 91730

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to GENTEX CORP for work described as: JSF VARIANT INTEGRATION Key points: 1. The contract's cost-plus-incentive-fee structure aims to align contractor performance with government objectives. 2. Full and open competition suggests a robust market for this specialized integration work. 3. The contract duration of over 4 years indicates a complex and long-term integration effort. 4. Performance is managed by the Defense Contract Management Agency, a key oversight body. 5. This award falls within the Research and Development sector, focusing on physical and engineering sciences. 6. The contract was awarded as a delivery order, implying it's part of a larger framework agreement.

Value Assessment

Rating: good

Benchmarking the value of this specific R&D contract is challenging due to its specialized nature and the 'cost-plus-incentive-fee' pricing structure, which inherently involves variable costs tied to performance. However, the award amount of $18.6 million over approximately 4.5 years suggests a substantial investment in the Joint Strike Fighter program's variant integration. Without comparable specific integration contracts for similar advanced aircraft variants, a direct price comparison is difficult. The incentive fee component suggests an effort to ensure value for money by rewarding efficient performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable contractors had the opportunity to bid. The presence of two bidders, as suggested by the 'no' field, implies a competitive environment, though the exact number of proposals received is not detailed. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing for complex R&D services.

Taxpayer Impact: Full and open competition helps ensure that taxpayer funds are used efficiently by driving down costs through market forces. It provides assurance that the selected contractor offers the best value proposition, rather than being the only option available.

Public Impact

The primary beneficiaries are the U.S. military branches operating the Joint Strike Fighter (JSF) variants, who will receive enhanced capabilities through integrated systems. The services delivered involve complex research and development for integrating new variants of the JSF, likely encompassing hardware, software, and systems engineering. The geographic impact is primarily within the defense industrial base, with potential implications for aerospace engineering hubs in California, where the contractor is based. This contract supports a highly skilled workforce in specialized R&D fields, including aerospace engineering, systems integration, and software development.

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 managed rigorously, as the government bears the cost of development plus an incentive fee.
The specialized nature of JSF variant integration means that the market for such services might be limited, potentially reducing future competition.
The long duration of the contract (over 4 years) increases the risk of scope creep or evolving requirements that may not be fully captured in the initial award.
Reliance on a single contractor for critical integration tasks could pose a risk if the contractor faces financial difficulties or performance issues.

Positive Signals

The award was made under full and open competition, suggesting a healthy competitive landscape for this type of specialized R&D.
The 'incentive fee' component of the contract structure is designed to motivate the contractor to achieve specific performance targets and cost efficiencies.
The contract is managed by the Defense Contract Management Agency (DCMA), which provides oversight and ensures compliance with contract terms.
The R&D focus indicates investment in advancing military technology, potentially leading to significant long-term strategic advantages.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences (NAICS 541710). The aerospace and defense industry is a major consumer of R&D services, with significant government investment aimed at maintaining technological superiority. Comparable spending benchmarks in this area are difficult to pinpoint without more specific details on the integration scope, but R&D contracts for major defense platforms often represent substantial investments, running into tens or hundreds of millions of dollars over their lifecycle.

Small Business Impact

The data provided does not indicate any specific small business set-aside or subcontracting requirements for this contract. Given the specialized and advanced nature of Joint Strike Fighter variant integration, it is likely that the prime contractor possesses unique capabilities. However, large defense contracts often include subcontracting plans that may involve small businesses for specific components or services, though this is not explicitly stated here.

Oversight & Accountability

Oversight for this contract is provided by the Defense Contract Management Agency (DCMA), a key agency responsible for ensuring contract compliance and performance for the Department of Defense. The 'cost-plus-incentive-fee' (CPIF) structure necessitates close monitoring of costs and performance against established targets. Transparency is generally maintained through regular reporting requirements mandated by the contract, and the Inspector General's office would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Joint Strike Fighter Program
F-35 Lightning II Development
Aerospace Systems Integration
Defense Research and Development Contracts
Cost-Plus-Incentive-Fee Contracts

Risk Flags

Cost Overrun Risk (CPIF)
Technological Obsolescence
Scope Creep Potential
Limited Competition Indicator

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to GENTEX CORP. JSF VARIANT INTEGRATION

Who is the contractor on this award?

The obligated recipient is GENTEX CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2009-06-29. End: 2013-12-31.

What is the specific nature of the 'JSF VARIANT INTEGRATION' being performed by Gentex Corp?

The specific nature of 'JSF VARIANT INTEGRATION' refers to the complex process of incorporating new or modified variants of the Joint Strike Fighter (JSF) aircraft into existing systems and operational frameworks. This typically involves extensive research and development to ensure seamless compatibility of hardware, software, avionics, and mission systems. It can encompass modifications to the airframe, upgrades to electronic warfare suites, integration of new weapons capabilities, and ensuring interoperability with ground support equipment and communication networks. Gentex Corp, as the contractor, is likely responsible for the engineering, testing, and validation required to bring these integrated variants to operational readiness, ensuring they meet stringent performance and safety standards set by the Department of Defense.

How does the 'cost-plus-incentive-fee' (CPIF) structure impact the value for money compared to other contract types?

The Cost-Plus-Incentive-Fee (CPIF) contract structure aims to provide value for money by incentivizing the contractor to perform efficiently and meet specific targets. In a CPIF contract, the government pays the contractor's actual allowable costs plus a target fee, which is then adjusted based on whether the final costs are below or above the target cost. An incentive fee is added or subtracted based on performance against pre-defined metrics (e.g., schedule, technical performance, cost reduction). This structure is often used for R&D or complex development efforts where precise cost and performance outcomes are uncertain. Compared to a fixed-price contract, CPIF offers more flexibility for the government if requirements evolve, but it requires robust oversight to prevent cost overruns. Compared to a cost-plus-fixed-fee (CPFF) contract, the incentive component provides a stronger motivation for the contractor to control costs and achieve superior performance, potentially leading to better value if the incentives are well-structured and achievable.

What are the potential risks associated with a long-duration contract (1646 days) for R&D integration?

Long-duration R&D contracts, such as this 1646-day award, carry several potential risks. Firstly, the technological landscape can change rapidly, meaning the initial requirements or the technology being developed might become outdated or less relevant by the contract's end. Secondly, scope creep is a significant risk; as the project progresses, new requirements or modifications may be requested, potentially increasing costs and extending timelines beyond initial projections if not managed carefully. Thirdly, contractor performance can degrade over extended periods due to personnel turnover, shifts in company priorities, or unforeseen challenges. Finally, the government's needs or strategic direction might evolve, leading to a misalignment with the contract's objectives by the time it concludes. Effective program management, clear change control processes, and regular performance reviews are crucial to mitigate these risks.

Given the 'full and open competition' and two bidders, what does this imply about the contractor's track record and market position?

The fact that this contract was awarded under 'full and open competition' with two bidders suggests that Gentex Corp has a competitive track record and is recognized as a capable provider in the specialized field of JSF variant integration. While two bidders indicate competition, it is on the lower end, which could suggest a niche market or high barriers to entry for other potential contractors. Gentex Corp's success in winning this award implies they met or exceeded the technical, performance, and potentially cost requirements set forth by the Department of Defense. Their ability to compete successfully in such an environment points to a solid market position within the defense R&D sector, likely possessing specialized expertise and established relationships within the defense acquisition community.

How does this contract fit into the broader context of U.S. defense spending on advanced aircraft programs?

This $18.6 million contract for JSF variant integration represents a component of the much larger U.S. defense spending dedicated to the Joint Strike Fighter program, which is one of the most expensive weapon systems in history. Spending on advanced aircraft programs, particularly R&D and integration, is a critical element of maintaining military superiority and technological edge. Such contracts are essential for ensuring that platforms like the F-35 remain relevant and capable against evolving threats. The investment reflects a strategic priority to enhance the capabilities of multi-role fighter aircraft through continuous upgrades and adaptations for different variants and mission requirements. This specific award contributes to the ongoing lifecycle development and sustainment of the JSF fleet.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gentex Corporation

Address: 9859 7TH ST, RANCHO CUCAMONGA, CA, 91730

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,935,614

Exercised Options: $18,935,614

Current Obligation: $18,650,121

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA890206D0001

IDV Type: IDC

Timeline