DoD awards $17.56M to Teledyne, Inc. for Aircraft Manufacturing, raising concerns about competition
Contract Overview
Contract Amount: $17,563,681 ($17.6M)
Contractor: Teledyne, Inc
Awarding Agency: Department of Defense
Start Date: 2003-02-10
End Date: 2007-08-31
Contract Duration: 1,663 days
Daily Burn Rate: $10.6K/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
Plain-Language Summary
Department of Defense obligated $17.6 million to TELEDYNE, INC for work described as: Key points: 1. Significant contract value of $17.56 million awarded to a single entity. 2. Lack of competition raises questions about price discovery and potential overspending. 3. Long contract duration of 1663 days suggests a substantial, ongoing need. 4. Aircraft Manufacturing sector is critical for defense readiness.
Value Assessment
Rating: questionable
The contract's 'COST NO FEE' pricing structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without benchmarks from competing bids, it's hard to determine if the $17.56 million represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded as a sole-source 'NOT COMPETED' action. This significantly limits price discovery and may lead to higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The absence of competition for a contract of this magnitude likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The long duration of the contract means sustained potential for inefficient spending. Dependence on a single contractor for critical aircraft manufacturing components could pose a supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus pricing structure (implied by 'COST NO FEE')
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Addresses a critical defense need
- Contract awarded to an established entity (Teledyne, Inc.)
Sector Analysis
The Aircraft Manufacturing sector (NAICS 336411) is vital for national defense, involving complex production and maintenance. Spending in this sector is typically high and requires specialized capabilities, making competition crucial for cost efficiency.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature of the award further limits opportunities for small business participation.
Oversight & Accountability
The 'NOT COMPETED' status suggests a potential lapse in robust oversight mechanisms that should prioritize competitive sourcing. Further review is needed to understand why this contract was not opened to competition.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Potential for inflated costs
- Limited transparency
- Sole-source dependency
- Insufficient small business participation
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.6 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 $17.6 million.
What is the period of performance?
Start: 2003-02-10. End: 2007-08-31.
What specific justification was provided for the sole-source award, and does it align with federal procurement regulations for non-competitive contracts?
Federal regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services. A thorough review of the justification documentation is necessary to determine if the Air Force's rationale for awarding this contract to Teledyne, Inc. without competition was valid and adequately documented according to FAR Part 6.
How was the 'COST NO FEE' pricing structure determined, and what mechanisms were in place to ensure cost reasonableness without competitive pressure?
A 'COST NO FEE' contract typically means the government reimburses the contractor for allowable costs but provides no fee or profit. Without competition, ensuring cost reasonableness relies heavily on robust government auditing and negotiation. The absence of competing offers makes it challenging to benchmark costs and verify that the government achieved the best possible value.
What is the long-term strategic impact of awarding such a significant contract solely to Teledyne, Inc. for aircraft manufacturing components?
Sole-source awards, especially for extended periods, can create contractor dependency and potentially stifle innovation within the broader industrial base. While Teledyne, Inc. is a known entity, relying on a single source for critical components may limit future sourcing options and potentially increase long-term costs if market conditions or technological needs change.
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: NO
Parent Contract
Parent Award PIID: F3365703G4306
IDV Type: IDC
Timeline
Start Date: 2003-02-10
Current End Date: 2007-08-31
Potential End Date: 2021-04-21 00:00:00
Last Modified: 2021-04-23
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