DoD's $23.6M aircraft manufacturing contract awarded to Teledyne, Inc. with no competition

Contract Overview

Contract Amount: $23,585,127 ($23.6M)

Contractor: Teledyne, Inc

Awarding Agency: Department of Defense

Start Date: 2005-12-20

End Date: 2006-09-30

Contract Duration: 284 days

Daily Burn Rate: $83.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $23.6 million to TELEDYNE, INC for work described as: Key points: 1. The contract's value of $23.6 million represents a significant investment in aircraft manufacturing capabilities. 2. Awarded on a sole-source basis, the lack of competition raises questions about potential price overruns and limited innovation. 3. The short performance period of 284 days suggests a specific, time-sensitive need for aircraft manufacturing services. 4. The contract's classification as 'Aircraft Manufacturing' places it within a critical sector for national defense. 5. The use of a Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns if not closely monitored. 6. The absence of small business involvement (sb: false) indicates no specific provisions were made to include smaller enterprises in this contract.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and specific details on the services rendered. However, a $23.6 million award for aircraft manufacturing, especially on a sole-source basis, warrants scrutiny. The CPFF structure, while sometimes necessary for R&D or uncertain scope projects, can lead to higher costs compared to fixed-price contracts if cost controls are not robust. Without comparable sole-source awards or detailed performance metrics, it's difficult to definitively assess value for money, but the non-competitive nature inherently limits the government's ability to secure the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the requirement, or in situations of urgent need. The lack of multiple bidders means there was no direct price comparison or market pressure to drive down costs. This sole-source award limits the government's ability to explore alternative solutions or leverage market competition to achieve the most favorable terms and pricing.

Taxpayer Impact: Taxpayers may have paid a premium for this aircraft manufacturing service due to the absence of competitive bidding. Without competition, there is less assurance that the price reflects the lowest reasonable cost for the goods or services provided.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Air Force, which receives critical aircraft manufacturing capabilities. The services delivered likely involve the production, modification, or repair of aircraft components or entire aircraft, supporting military readiness. The geographic impact is centered around the contractor's location in California, though the ultimate use of the aircraft is national. Workforce implications include employment opportunities within Teledyne, Inc. and its supply chain, particularly in specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially leads to higher costs for taxpayers.
Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not managed diligently.
Lack of transparency regarding the specific aircraft or components manufactured hinders public understanding of the expenditure.
Short contract duration (284 days) might indicate a reactive procurement rather than strategic, long-term planning.
No small business set-aside (sb: false) means potential missed opportunities for small business growth and participation.

Positive Signals

Award to an established entity (Teledyne, Inc.) suggests a level of trust in their manufacturing capabilities.
The contract addresses a specific need within the Department of the Air Force's operational requirements.
The fixed fee component of the CPFF contract provides some level of cost certainty for the contractor's profit.
The North American Industry Classification System (NAICS) code 336411 confirms the contract is for aircraft manufacturing, a critical defense capability.

Sector Analysis

The aircraft manufacturing sector is a cornerstone of the aerospace and defense industry, characterized by high technological complexity, stringent quality standards, and significant government procurement. This contract falls under NAICS code 336411, 'Aircraft Manufacturing.' The market is often dominated by large prime contractors, but also relies on a complex supply chain of specialized component manufacturers. Government spending in this area is crucial for national security, supporting the development, production, and maintenance of military aircraft fleets. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the aircraft or components, but multi-million dollar contracts are common for specialized aerospace manufacturing.

Small Business Impact

This contract does not appear to have a small business set-aside (sb: false). The award was made directly to Teledyne, Inc., a large corporation. This means there were no specific provisions to ensure a portion of the contract value flowed down to small businesses. Consequently, there are no direct subcontracting implications for small businesses mandated by this specific award. The impact on the broader small business ecosystem is neutral, as this contract did not actively seek to engage or support small enterprises.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, scrutiny might be heightened to ensure the necessity and fair pricing. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial oversight to monitor incurred costs against the fixed fee. While specific Inspector General (IG) jurisdiction isn't detailed here, the DoD IG typically oversees all DoD contracts for fraud, waste, and abuse. Transparency is limited by the non-competitive nature and the proprietary details of aircraft manufacturing.

Related Government Programs

Aircraft Production
Defense Procurement
Aerospace Manufacturing
Military Aircraft Components
Air Force Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competition
Short performance period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.6 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 $23.6 million.

What is the period of performance?

Start: 2005-12-20. End: 2006-09-30.

What specific aircraft or aircraft components were manufactured under this contract?

The provided data does not specify the exact aircraft or components manufactured under this contract, only that the North American Industry Classification System (NAICS) code is 336411, which pertains to 'Aircraft Manufacturing.' This broad classification suggests the work could range from complete aircraft assembly to the production of critical sub-assemblies or specialized parts. Without further details from the contract award notice or associated documentation, the precise nature of the manufactured items remains undisclosed. This lack of specificity is common for certain defense procurements where details might be sensitive or are managed through separate technical specifications.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. Common justifications for sole-sourcing include situations where only one responsible source is available to meet the government's needs, urgent and compelling requirements that preclude competition, or specific circumstances outlined in federal acquisition regulations (e.g., follow-on work to a previous contract where only the original contractor possesses necessary knowledge or tooling). Without additional context from the contracting agency, the precise reason for foregoing competition for this $23.6 million aircraft manufacturing contract remains unspecified. This lack of competition limits the government's ability to ensure the best possible price and explore alternative solutions.

How does the Cost Plus Fixed Fee (CPFF) pricing structure impact the overall cost and risk for this contract?

The Cost Plus Fixed Fee (CPFF) pricing structure means the contractor (Teledyne, Inc.) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some cost certainty regarding the contractor's profit margin, the total cost to the government can fluctuate based on the actual costs incurred. This structure can incentivize contractors to incur costs, as they are reimbursed for them. Effective oversight by the Department of the Air Force is crucial to ensure that all costs are reasonable, allocable, and necessary. The risk for the government lies in potential cost overruns if cost controls are not rigorously applied, while the contractor's risk is primarily related to managing costs within the scope to ensure the fixed fee remains profitable.

What is Teledyne, Inc.'s track record in fulfilling similar aircraft manufacturing contracts for the Department of Defense?

Teledyne, Inc. is a large, established company with a significant presence in aerospace and defense manufacturing. While this specific data point doesn't detail their historical performance on similar contracts, Teledyne is known for producing a wide range of products, including aerospace components, instrumentation, and defense electronics. Their long-standing involvement in the industry suggests a substantial track record. However, a comprehensive assessment of their performance on past aircraft manufacturing contracts would require examining specific contract histories, past performance evaluations, and any documented issues or successes related to quality, delivery, and cost control on prior DoD agreements.

How does the $23.6 million contract value compare to typical spending in the aircraft manufacturing sector for the DoD?

The $23.6 million contract value is a substantial sum, but within the typical range for specialized aircraft manufacturing or component production for the Department of Defense. The DoD procures billions of dollars worth of aerospace and defense products annually. Contracts can range from tens of thousands for specific parts to billions for entire aircraft programs. This particular award, being a single delivery order under a larger potential contract (implied by 'AW: DELIVERY ORDER'), likely represents a specific production run or a defined set of manufacturing services. Without knowing the exact nature of the aircraft or components, direct comparison is difficult, but it signifies a significant, albeit not program-defining, investment.

What are the potential risks associated with the short contract duration of 284 days?

A contract duration of 284 days (approximately 9.5 months) suggests a focused, short-term requirement for aircraft manufacturing services. Potential risks associated with such a short timeframe include: rushed production schedules that could compromise quality control, difficulties in sourcing specialized materials or components within the limited lead time, and potential for increased costs if expedited processes are required. It might also indicate that this is a single delivery order under a broader, longer-term agreement, or that the requirement itself is time-sensitive, perhaps related to a specific operational need or a gap in existing capabilities. The short duration necessitates efficient project management and rapid execution from both the contractor and the government oversight team.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft 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: COST PLUS FIXED FEE (U)

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

Parent Contract

Parent Award PIID: F3365703G4306

IDV Type: IDC

Timeline