DoD awards $57.6M for ALQ-211 LRU-1 to ITT Corporation, a sole-source contract for aircraft parts
Contract Overview
Contract Amount: $57,645,290 ($57.6M)
Contractor: ITT Corporation
Awarding Agency: Department of Defense
Start Date: 2008-12-16
End Date: 2012-03-01
Contract Duration: 1,171 days
Daily Burn Rate: $49.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ALQ-211 LRU-1
Place of Performance
Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014
Plain-Language Summary
Department of Defense obligated $57.6 million to ITT CORPORATION for work described as: ALQ-211 LRU-1 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Firm Fixed Price contract type suggests cost certainty for the government. 3. Contract duration of 1171 days indicates a long-term need for these parts. 4. The award is for aircraft engine and engine parts manufacturing. 5. The contract was awarded by the U.S. Special Operations Command. 6. The contractor, ITT Corporation, has a significant presence in the defense sector.
Value Assessment
Rating: fair
The contract value of $57.6 million for ALQ-211 LRU-1 parts appears substantial. Without specific unit cost data or comparable contract benchmarks, a precise value-for-money assessment is challenging. However, the sole-source nature of the award raises concerns about potential overpricing compared to a competitive environment. The firm fixed-price structure provides some cost control, but the lack of competition limits the government's ability to secure the best possible pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, ITT Corporation, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when only one source is available. The absence of multiple bidders means there was no direct price competition, which can lead to higher costs for the government.
Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding. Without a competitive process, there is less assurance that the price reflects the lowest reasonable cost for the required parts.
Public Impact
The U.S. Special Operations Command benefits from the acquisition of critical aircraft parts. This contract supports the operational readiness of specialized aircraft used by special operations forces. The contract has implications for the aerospace and defense manufacturing workforce, particularly at ITT Corporation. The geographic impact is primarily centered around the contractor's facilities in New Jersey.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
- Lack of transparency in the sole-source justification could mask inefficiencies.
- Long contract duration without competition may reduce incentives for cost optimization.
- Dependence on a single supplier for critical aircraft parts poses a supply chain risk.
Positive Signals
- Firm Fixed Price contract provides cost certainty for the government.
- Award to an established contractor like ITT Corporation suggests a degree of reliability.
- The contract addresses a specific, likely critical, need for specialized aircraft components.
Sector Analysis
The aerospace and defense sector is characterized by high technological complexity and significant government investment. Contracts for aircraft parts, like the ALQ-211 LRU-1, are crucial for maintaining military readiness. The market often involves specialized suppliers and can see sole-source awards when unique capabilities are required. Spending in this sector is substantial, with significant portions allocated to sustainment and modernization of aircraft fleets.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, ITT Corporation, is a large business. There is no information provided regarding subcontracting plans to small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though ITT Corporation may engage small businesses in its supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The U.S. Special Operations Command is responsible for ensuring contract performance and compliance. Transparency regarding the justification for the sole-source award and ongoing performance monitoring are key oversight mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Aircraft Component Procurement
- Special Operations Aviation Support
- Defense Electronics Manufacturing
- ITT Corporation Defense Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Supply chain dependency
Tags
defense, department-of-defense, itt-corporation, sole-source, aircraft-parts, electronic-warfare, firm-fixed-price, special-operations, new-jersey, aircraft-engine-and-engine-parts-manufacturing
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $57.6 million to ITT CORPORATION. ALQ-211 LRU-1
Who is the contractor on this award?
The obligated recipient is ITT CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (U.S. Special Operations Command).
What is the total obligated amount?
The obligated amount is $57.6 million.
What is the period of performance?
Start: 2008-12-16. End: 2012-03-01.
What is the specific function of the ALQ-211 LRU-1, and why was it deemed necessary for a sole-source award?
The ALQ-211 LRU-1 is a component of an electronic warfare system designed to protect aircraft from radar-guided threats. Electronic warfare systems are highly specialized and often involve proprietary technology developed by specific contractors. The decision for a sole-source award suggests that ITT Corporation possesses unique capabilities or intellectual property related to this specific LRU that are critical for the U.S. Special Operations Command's mission. Without further declassification or specific justification documents, the precise technical reasons and the extent of ITT's proprietary control remain undisclosed, but it is common in this niche for only one or very few entities to possess the required expertise and technology.
How does the firm fixed-price contract type mitigate risks for the government in this sole-source scenario?
A Firm Fixed Price (FFP) contract type is beneficial for the government, especially in a sole-source situation, because it establishes a ceiling price that the contractor cannot exceed. This provides cost certainty and shifts the risk of cost overruns from the government to the contractor. While the absence of competition might lead to a higher initial price compared to a competitive bid, the FFP structure ensures that the government's financial exposure is capped. This predictability is valuable for budgeting and financial planning, preventing unexpected increases in expenditure during the contract's performance period.
What is ITT Corporation's track record with the Department of Defense, particularly in electronic warfare systems?
ITT Corporation, now L3Harris Technologies following acquisitions, has a long-standing history of providing defense electronics and systems to the U.S. military, including the Department of Defense. They are known for their expertise in areas such as electronic warfare, communications, and surveillance systems. Their involvement in critical defense programs suggests a proven capability and a substantial track record in delivering complex technological solutions. The award for the ALQ-211 LRU-1 is consistent with their established role as a key supplier of advanced electronic warfare components and systems to various branches of the U.S. armed forces.
Can we compare the value of this contract to similar electronic warfare component procurements?
Directly comparing the value of this $57.6 million contract for the ALQ-211 LRU-1 to similar procurements is challenging without access to detailed contract databases and specific component specifications. Electronic warfare components vary widely in complexity, technological sophistication, and the scale of production. However, given the specialized nature of electronic warfare systems and the sole-source award, it is reasonable to assume that the pricing reflects unique technological development and manufacturing processes. Benchmarking would ideally involve comparing unit costs for comparable LRUs (Line Replaceable Units) within EW systems, considering factors like technology maturity, production volume, and the competitive landscape for those specific items.
What are the potential risks associated with a sole-source award for critical aircraft components like the ALQ-211 LRU-1?
The primary risk of a sole-source award for critical aircraft components is the potential for inflated pricing due to the lack of competition. Without competing bids, the government has less leverage to negotiate the lowest possible price. Additionally, sole-source contracts can reduce incentives for the contractor to innovate or improve efficiency, as there is no competitive pressure. There's also a risk of vendor lock-in, making it difficult and costly to switch suppliers in the future. Furthermore, reliance on a single source can create supply chain vulnerabilities if the contractor experiences production issues or financial instability.
How has spending on aircraft engine and engine parts manufacturing evolved within the Department of Defense over time?
Spending on aircraft engine and engine parts manufacturing within the Department of Defense (DoD) is a consistent and significant category, driven by the need to maintain and modernize a vast fleet of aircraft. Historical spending patterns reflect the lifecycle of various aircraft platforms, from initial procurement to sustainment and upgrades. Factors influencing spending include geopolitical events, technological advancements, and budget allocations. While specific figures fluctuate annually, the DoD consistently allocates billions of dollars to this sector to ensure operational readiness and support its aviation capabilities. This particular contract, awarded in 2008, falls within a period of sustained defense spending.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: INSTRUMENTS AND LABORATORY EQPT
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: 77 RIVER RD, CLIFTON, NJ, 09
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $57,645,290
Exercised Options: $57,645,290
Current Obligation: $57,645,290
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9224106D0001
IDV Type: IDC
Timeline
Start Date: 2008-12-16
Current End Date: 2012-03-01
Potential End Date: 2012-03-01 00:00:00
Last Modified: 2011-12-19
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