Naval Air Systems Command awards $275M contract for rotary wing aircraft parts, primarily to Thales

Contract Overview

Contract Amount: $26,610,197 ($26.6M)

Contractor: Thales

Awarding Agency: Department of Defense

Start Date: 2006-06-16

End Date: 2009-12-31

Contract Duration: 1,294 days

Daily Burn Rate: $20.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200609!446952!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905G0019 !A!N! !N!0002 ! !20060616!20071130!275250553!275250553!275250553!N!THALES !45 RUE DE VILLIERS !NEUILLY SUR SE !FR!92200!00000! !FR! ! !FRANCE !+000011181489!N!N!000000000000!1520!AIRCRAFT ROTARY WING !A1C!OTHER AIRCRAFT EQUIPMENT !101 !USMC H-1 UPGRADE !336413!A!A!4! ! ! ! ! !99990909!B!C!Y!A! !D!U!J!1!001!N!1A!Z!N!Z!B!FR!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! !Y!1700!N00019!0001! !

Plain-Language Summary

Department of Defense obligated $26.6 million to THALES for work described as: 200609!446952!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905G0019 !A!N! !N!0002 ! !20060616!20071130!275250553!275250553!275250553!N!THALES !45 RUE DE VILLIERS !NEUILLY SUR SE !FR!92200!00000! !FR! ! … Key points: 1. Contract awarded for aircraft parts, indicating a need for specialized components in aviation. 2. The significant value suggests a critical role for these parts in naval operations. 3. Sole-source award raises questions about competition and potential cost efficiencies. 4. The contract duration spans over three years, implying ongoing operational requirements. 5. Focus on rotary wing aircraft points to specific fleet maintenance or upgrade needs. 6. Thales, a foreign entity, is the primary contractor, highlighting international supply chain reliance.

Value Assessment

Rating: fair

The total contract value of $275,250,553 over approximately 3.5 years appears substantial for aircraft parts. Benchmarking this against similar contracts for rotary wing aircraft components is challenging without more specific details on the parts. However, the lack of competition for a contract of this magnitude warrants scrutiny regarding whether the pricing reflects a competitive market or a premium due to sole-source status. The value seems to align with specialized, high-value components rather than standard off-the-shelf parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there's less assurance that the government secured the best possible price for these critical aircraft components.

Public Impact

The U.S. Marine Corps (USMC) is a primary beneficiary, likely utilizing these parts for their H-1 upgrade program. The contract supports the maintenance and operational readiness of rotary wing aircraft fleets. The geographic impact is primarily within naval aviation facilities and potentially at Thales's manufacturing sites. Workforce implications include skilled labor at Thales for manufacturing and specialized technicians for installation and maintenance within the USMC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Reliance on a foreign contractor (Thales) introduces supply chain risks and potential delays.
Lack of transparency in the sole-source justification requires further review.
The specific nature of 'Other Aircraft Equipment' is broad and could encompass high-risk, critical components.

Positive Signals

Contract supports a specific, critical program (USMC H-1 Upgrade), indicating strategic importance.
Thales is a known entity in aerospace, suggesting a level of established capability.
The contract is for aircraft parts, essential for maintaining operational readiness of military assets.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and equipment. The market for specialized aviation components is often characterized by high barriers to entry due to technological complexity, stringent quality requirements, and long development cycles. Companies like Thales operate in a global market, supplying critical systems to various defense forces. The value of this contract, at $275 million, is significant and reflects the high cost associated with advanced aerospace components, particularly for military applications.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans within the provided data. As a sole-source award to a large, foreign corporation (Thales), it is unlikely that small businesses were directly involved in the primary contract. Further investigation would be needed to determine if Thales engages in subcontracting with U.S. small businesses for any portion of this work.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Naval Air Systems Command. As a sole-source award, the justification and approval process would have undergone specific review. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract execution.

Related Government Programs

USMC H-1 Upgrade Program
Naval Aviation Maintenance Contracts
Aerospace Component Procurement
Foreign Military Sales (potential indirect link)
Rotary Wing Aircraft Support

Risk Flags

Sole-source award lacks competition
Potential for cost overruns due to non-competitive pricing
Supply chain risk associated with foreign contractor
Limited transparency in contract justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.6 million to THALES. 200609!446952!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001905G0019 !A!N! !N!0002 ! !20060616!20071130!275250553!275250553!275250553!N!THALES !45 RUE DE VILLIERS !NEUILLY SUR SE !FR!92200!00000! !FR! ! !FRANCE !+000011181489!N!N!000000000000!1520!AIRCRAFT ROTARY WING !A1C!OTHER AIRCRAFT EQUIPMENT !101 !USMC H-1 UPGRADE !336413!A!A!4! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is THALES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.6 million.

What is the period of performance?

Start: 2006-06-16. End: 2009-12-31.

What specific aircraft rotary wing components are being procured under this contract?

The provided data indicates the contract is for 'Other Aircraft Equipment' under the Product Service Code (PSC) A1C, specifically related to 'AIRCRAFT ROTARY WING'. While the exact components are not detailed, the contract number and description point towards parts essential for the USMC H-1 Upgrade program, which involves upgrades to the AH-1Z Viper and UH-1Y Venom helicopters. These could include complex systems, structural components, or specialized avionics crucial for the operational capabilities of these rotary wing platforms. The broad categorization suggests a range of parts necessary for maintaining and enhancing the H-1 fleet.

What is the justification for awarding this contract on a sole-source basis to Thales?

The justification for a sole-source award typically stems from situations where only one responsible source can provide the required supplies or services. For Thales, this could be due to proprietary technology, unique manufacturing capabilities, existing integration with the H-1 platform, or specific certifications required for these critical aircraft components. Without access to the official sole-source justification document (e.g., a Justification and Approval or J&A), the precise reasons remain speculative. However, in defense contracting, sole-source awards are often made when a specific part is essential for a particular system, and only the original equipment manufacturer or a highly specialized entity can supply it to meet stringent military specifications.

How does the pricing of this contract compare to market rates for similar aircraft components?

Directly comparing the pricing of this $275 million contract to market rates for similar aircraft components is difficult without knowing the exact nature of the 'Other Aircraft Equipment' procured. As a sole-source award, the government did not benefit from competitive bidding, which typically drives prices down. Thales, being a large international aerospace company, may command premium pricing for specialized, high-specification military parts. Benchmarking would require detailed cost breakdowns, comparisons with similar sole-source awards for comparable components, or analysis of historical pricing trends for these specific parts, none of which are available in the provided summary data. The lack of competition inherently limits the ability to assess true market value.

What are the potential risks associated with relying on a foreign contractor like Thales for critical aircraft parts?

Relying on a foreign contractor like Thales for critical aircraft parts introduces several potential risks. Foremost among these is supply chain vulnerability; geopolitical tensions, trade disputes, or logistical disruptions in France could impact delivery schedules and availability. Lead times for specialized components manufactured overseas can also be longer. Furthermore, there may be challenges related to intellectual property protection, differing regulatory standards, and currency exchange rate fluctuations affecting the final cost. Ensuring consistent quality control and timely support for maintenance and repair operations can also be more complex when dealing with international suppliers.

What is the historical spending pattern for 'Other Aircraft Equipment' by the Naval Air Systems Command?

Historical spending data for 'Other Aircraft Equipment' by the Naval Air Systems Command (NAVAIR) would reveal trends in procurement for this category. This specific contract, awarded in 2006 with an end date in 2009, represents a significant single award within that period. Analyzing NAVAIR's broader spending on aircraft parts and equipment over the years would show fluctuations based on fleet readiness needs, modernization programs (like the H-1 upgrade), and budget allocations. Understanding this historical context helps in evaluating whether the $275 million awarded here is an outlier or representative of typical spending for such critical components, especially considering it was a sole-source award for a specific program.

What is the track record of Thales in fulfilling defense contracts with the U.S. Department of Defense?

Thales is a major international defense contractor with a significant history of supplying various systems and components to the U.S. Department of Defense (DoD) and other allied nations. Their track record generally includes the delivery of complex electronic systems, avionics, and other specialized equipment for military platforms. While specific performance metrics for every contract are not publicly available, Thales is recognized for its technological capabilities in the aerospace and defense sectors. However, like any large contractor, there can be instances of contract modifications, performance reviews, or disputes. For this particular contract, the sole-source nature and the focus on specific aircraft parts suggest a need for Thales's specialized expertise, implying a degree of confidence from the Navy in their ability to deliver.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 45 RUE DE VILLIERS, NEUILLY SUR SEINE

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0001905G0019

IDV Type: IDC

Timeline