DoD's $8.35M contract for helicopter rotor blades awarded to DERLAN PRECISION GEAR INC
Contract Overview
Contract Amount: $10,375,477 ($10.4M)
Contractor: Northstar Aerospace (chicago) Inc.
Awarding Agency: Department of Defense
Start Date: 2000-01-10
End Date: 2005-12-31
Contract Duration: 2,182 days
Daily Burn Rate: $4.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200004!2100!000507!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2398D0101 !A!*!0005 !20000110!20020330!835052390!835052390!835052390!N!22907!DERLAN PRECISION GEAR INC !6006 W 73RD ST !BEDFORD PARK !IL!60638!14000!031!17!CHICAGO !COOK !ILLINOIS !0001!+000005302774!N!N!000000000000!1615!HELICOPTER ROTOR BLADES, DRIVE MECHANISMS & COMPON!A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !3728!5!B!S!*!B!A!*!A !N!J!2!004!B!* !Z!N!Z!* !* !N!C!*!D!D!A!A!A!A!* !*!N!A!B!N!*!*!*!*!*!
Place of Performance
Location: CHICAGO, COOK County, ILLINOIS, 60638
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $10.4 million to NORTHSTAR AEROSPACE (CHICAGO) INC. for work described as: 200004!2100!000507!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2398D0101 !A!*!0005 !20000110!20020330!835052390!835052390!835052390!N!22907!DERLAN PRECISION GEAR INC !6006 W 73RD ST !BEDFORD PARK !IL!60638!14000!031!17!CHICAGO !COO… Key points: 1. Contract awarded for critical helicopter components, indicating a need for specialized manufacturing capabilities. 2. The contract value suggests a significant investment in aviation readiness and maintenance. 3. The duration of the contract points to a long-term requirement for these parts. 4. Awarded to a single entity, highlighting potential specialization or limited market capacity for these specific parts. 5. The product service code suggests a focus on precision engineering for aerospace applications.
Value Assessment
Rating: fair
The total contract value of $8.35 million for helicopter rotor blades and drive mechanisms appears to be within a reasonable range for specialized aerospace components, though a direct comparison to similar contracts is difficult without more specific data on the exact specifications and quantities. The fixed-price nature of the contract shifts risk to the contractor, which can be beneficial for the government if costs are managed effectively. However, without detailed cost breakdowns or benchmarks for per-unit pricing, a definitive assessment of value for money is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of four bids suggests a moderately competitive environment for this specific requirement. While full and open competition is generally preferred for ensuring fair pricing and access to the widest range of capabilities, the number of bidders (four) might suggest that the market for these highly specialized components is not exceptionally broad.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down prices and ensuring the government receives competitive offers.
Public Impact
The U.S. Army benefits from the reliable supply of critical helicopter components, ensuring operational readiness. Services delivered include the manufacturing and supply of helicopter rotor blades and drive mechanisms. The geographic impact is primarily within Illinois, where the contractor is located, potentially supporting local jobs. Workforce implications include the need for skilled manufacturing labor in precision engineering and aerospace component production.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition (4 bidders) may not have yielded the absolute lowest price.
- Lack of detailed per-unit cost data makes definitive value assessment difficult.
- Contract duration could lead to price escalation if market conditions change significantly.
Positive Signals
- Awarded through full and open competition, maximizing potential bidder pool.
- Firm fixed-price contract type provides cost certainty for the government.
- Contractor is located in Illinois, potentially supporting domestic manufacturing.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on critical aircraft components. The market for specialized helicopter parts like rotor blades and drive mechanisms is often characterized by high barriers to entry due to stringent quality requirements, advanced technology, and specialized manufacturing processes. Spending in this area is driven by military readiness needs and the maintenance of existing aviation fleets. Comparable spending benchmarks would typically involve other contracts for similar high-value, precision-engineered aerospace parts.
Small Business Impact
This contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements specifically for small businesses. The contractor, DERLAN PRECISION GEAR INC., is likely a mid-to-large-sized business given the contract value and specialization. The absence of small business set-asides means that opportunities for small businesses to participate in this specific contract are limited unless they are direct suppliers or partners to the prime contractor.
Oversight & Accountability
Oversight for this contract would typically be managed by the U.S. Army Contracting Command, with potential involvement from the Defense Contract Management Agency (DCMA) for quality assurance and delivery monitoring. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver specified goods within the agreed-upon terms. Transparency is generally provided through contract databases like FPDS, though detailed cost breakdowns are often proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Apache (AH-64) Attack Helicopter Program
- Helicopter Component Manufacturing
- Aerospace Parts Procurement
- Defense Aviation Maintenance, Repair, and Overhaul (MRO)
Risk Flags
- Potential for limited competition due to specialized nature of components.
- Risk of quality control issues with critical flight safety parts.
- Dependence on a single contractor for a specific component set.
Tags
defense, department-of-defense, department-of-the-army, aviation, helicopter-parts, rotor-blades, full-and-open-competition, firm-fixed-price, illinois, manufacturing, aerospace, precision-gear
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $10.4 million to NORTHSTAR AEROSPACE (CHICAGO) INC.. 200004!2100!000507!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2398D0101 !A!*!0005 !20000110!20020330!835052390!835052390!835052390!N!22907!DERLAN PRECISION GEAR INC !6006 W 73RD ST !BEDFORD PARK !IL!60638!14000!031!17!CHICAGO !COOK !ILLINOIS !0001!+000005302774!N!N!000000000000!1615!HELICOPTER ROTOR BLADES, DRIVE MECHANISMS & COMPON!A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !3728!5!B!S!*!B!A!*!A !N!J!
Who is the contractor on this award?
The obligated recipient is NORTHSTAR AEROSPACE (CHICAGO) 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 $10.4 million.
What is the period of performance?
Start: 2000-01-10. End: 2005-12-31.
What is the track record of DERLAN PRECISION GEAR INC. with government contracts, particularly for aviation components?
DERLAN PRECISION GEAR INC. has a history of receiving government contracts, primarily within the Department of Defense. While this specific contract for helicopter rotor blades and drive mechanisms is a significant award, their broader contract history would need to be analyzed to understand their performance trends, on-time delivery rates, and any past issues or commendations. Examining prior awards for similar components or within the aerospace sector would provide further context on their capabilities and reliability as a government supplier. A deeper dive into their contract performance metrics, such as contract modifications, disputes, or terminations, would offer a more comprehensive view of their track record.
How does the per-unit cost of these helicopter rotor blades compare to market rates or similar government procurements?
Determining the precise per-unit cost for the helicopter rotor blades and drive mechanisms is challenging with the provided data, as the total award amount ($8.35 million) does not specify the quantity of units. Without knowing the number of items procured, a direct per-unit cost calculation is impossible. To benchmark this against market rates or similar government procurements, one would need access to detailed specifications of the components, the quantities ordered, and pricing data from comparable contracts. Typically, such specialized aerospace parts are high-value items, and their cost is influenced by complex manufacturing processes, material science, and stringent quality control. A thorough analysis would require comparing this contract's unit price (once calculable) against publicly available data for similar parts or against historical pricing for the same or equivalent components.
What are the primary risks associated with this contract, and how are they being mitigated?
Primary risks associated with this contract include potential supply chain disruptions for specialized materials, manufacturing defects that could compromise flight safety, and contractor performance issues leading to delivery delays. Given the critical nature of rotor blades, quality control is paramount. Mitigation strategies likely involve rigorous inspection and testing protocols mandated by the contract, clear performance standards, and potentially backup supplier qualifications. The firm fixed-price nature of the contract incentivizes the contractor to manage costs and adhere to specifications. However, the risk of cost overruns due to unforeseen manufacturing challenges or material price increases is borne by the contractor, which could indirectly impact delivery schedules if the contractor struggles financially.
How effective has the U.S. Army been in procuring helicopter components through full and open competition historically?
The U.S. Army's historical effectiveness in procuring helicopter components through full and open competition can be assessed by examining trends in competition levels, price savings achieved, and the quality and timeliness of delivered components. While full and open competition is the preferred method for maximizing competition and achieving best value, the actual effectiveness can vary. Factors such as the specialized nature of components, the number of qualified manufacturers, and market dynamics influence the level of competition realized. Analyzing historical data for similar procurements might reveal instances where competition was robust, leading to significant cost savings, versus situations where the number of bidders was limited, suggesting potential market concentration or high barriers to entry. The Army's procurement strategies, including market research and source selection processes, play a crucial role in ensuring the effectiveness of full and open competition.
What is the historical spending pattern for helicopter rotor blades and related components by the Department of Defense?
Historical spending patterns for helicopter rotor blades and related components by the Department of Defense are substantial, reflecting the continuous need to maintain and upgrade a large fleet of rotary-wing aircraft. This spending is typically driven by operational requirements, planned maintenance cycles, and upgrades to existing platforms. The total annual expenditure can fluctuate based on major fleet modernization programs, the retirement of older aircraft, and the introduction of new models. Analyzing historical data reveals consistent investment in these critical parts, often awarded through competitive solicitations, though sometimes through sole-source contracts for highly specialized or proprietary components. The spending is distributed across various branches of the military and numerous aviation platforms, with significant portions allocated to sustainment and readiness initiatives.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Fluid Power Valve and Hose Fitting Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northstar Aerospace Inc (UEI: 244881835)
Address: 6006 W 73RD ST, BEDFORD PARK, IL, 90
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAH2398D0101
IDV Type: IDC
Timeline
Start Date: 2000-01-10
Current End Date: 2005-12-31
Potential End Date: 2005-12-31 00:00:00
Last Modified: 2014-08-04
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