DoD's $24.1M ALQ-211 LRU-1 contract awarded to ITT Corporation shows limited competition

Contract Overview

Contract Amount: $24,133,923 ($24.1M)

Contractor: ITT Corporation

Awarding Agency: Department of Defense

Start Date: 2013-04-10

End Date: 2015-11-30

Contract Duration: 964 days

Daily Burn Rate: $25.0K/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, UNITED STATES OF AMERICA

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $24.1 million to ITT CORPORATION for work described as: ALQ-211 LRU-1 Key points: 1. The contract value of $24.1 million for aircraft engine and parts manufacturing represents a significant investment in specialized defense components. 2. Awarded as 'NOT COMPETED', this contract raises questions about potential missed opportunities for competitive bidding and cost savings. 3. The duration of 964 days suggests a long-term need for these specific aircraft components. 4. The contract falls under the 'Aircraft Engine and Engine Parts Manufacturing' sector, indicating a focus on aviation sustainment and readiness. 5. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small businesses. 6. The firm fixed-price contract type aims to provide cost certainty for the government.

Value Assessment

Rating: fair

Benchmarking the value of this specific ALQ-211 LRU-1 contract is challenging without detailed cost breakdowns and comparisons to similar sole-source procurements. However, the $24.1 million award for aircraft engine parts over a 964-day period suggests a substantial investment. The lack of competition inherently limits the government's ability to ensure it is receiving the best possible price, making a definitive value-for-money assessment difficult. Further analysis would require access to cost data and comparisons with other sole-source awards for similar components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT COMPETED' justification, 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 cases of urgent need. The lack of multiple bidders means that the government did not benefit from the price discovery mechanisms that competition provides, potentially leading to higher costs than if multiple companies had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing the requirement, there is less assurance that the price reflects the lowest achievable market rate for these specialized aircraft engine parts.

Public Impact

The U.S. Special Operations Command is the primary beneficiary, receiving critical aircraft engine and engine parts. This contract supports the operational readiness and sustainment of specialized aircraft used by special operations forces. The geographic impact is primarily within the United States, where the contractor ITT Corporation is based and where the components will likely be utilized or integrated. The contract supports specialized manufacturing jobs within the aerospace and defense industry, specifically in engine and parts manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competed contract.
Limited transparency into the justification for sole-source award.
Potential for contractor lock-in due to specialized nature of the product.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award to a known entity (ITT Corporation) may imply a level of trust or established relationship.
Supports critical components for U.S. Special Operations Command aircraft.

Sector Analysis

The contract falls within the broader aerospace and defense sector, specifically focusing on aircraft engine and engine parts manufacturing. This is a critical sub-sector that supports military aviation readiness. The market for specialized defense components can be characterized by high barriers to entry due to technical expertise, stringent quality requirements, and long development cycles. Spending in this area is often driven by specific platform needs and sustainment requirements, with significant government investment historically directed towards maintaining and upgrading military aviation assets.

Small Business Impact

The contract details indicate that this was not a small business set-aside, and the prime contractor, ITT Corporation, is a large business. There is no explicit information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless ITT Corporation voluntarily engages small businesses as subcontractors for specific components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited by the sole-source nature of the award; however, contract award data is generally made public. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Component Procurement
Special Operations Forces Equipment
Defense Logistics and Sustainment
Aerospace Manufacturing Contracts
Sole-Source Defense Acquisitions

Risk Flags

Sole-source award lacks competitive pricing.
Potential for higher cost due to lack of competition.
Limited transparency on justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.1 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 $24.1 million.

What is the period of performance?

Start: 2013-04-10. End: 2015-11-30.

What is the specific function and importance of the ALQ-211 LRU-1 component?

The ALQ-211 LRU-1 is a component related to electronic warfare systems, specifically an "Improved" version of the ALQ-211 "Wild Weasel" family of systems. These systems are designed to detect, identify, and jam enemy radar signals, thereby protecting friendly aircraft from air defense threats. The LRU-1 likely represents an upgrade or a specific module within this broader system, crucial for enhancing the survivability and effectiveness of aircraft operating in contested airspace. Its importance lies in providing a critical layer of defense against sophisticated enemy radar and missile systems, enabling U.S. and allied forces to conduct missions with reduced risk.

Why was this contract awarded on a sole-source basis instead of being competed?

The contract was awarded on a 'NOT COMPETED' basis, indicating that a full and open competition was not conducted. Specific justifications for sole-source awards can vary but often include situations where only one responsible source can provide the required supplies or services, or when there is an urgent and compelling need that precludes competition. For specialized defense components like the ALQ-211 LRU-1, it's possible that ITT Corporation holds proprietary rights, unique manufacturing capabilities, or essential technical data that makes them the only viable source. Without further documentation from the awarding agency (U.S. Special Operations Command), the precise reason remains unstated, but it implies a lack of alternative qualified bidders.

How does the $24.1 million contract value compare to historical spending on similar ALQ-211 components?

Direct comparison of this $24.1 million contract value to historical spending on similar ALQ-211 components is difficult without access to detailed historical contract databases and specific component identifiers. However, the award amount suggests a significant procurement quantity or a high unit cost for the LRU-1 module. Given that this was a sole-source award, the price may not be directly comparable to potentially lower prices achieved through competitive bidding on similar, but not identical, electronic warfare components. Further analysis would require identifying previous contracts for the ALQ-211 system or its variants and examining their award amounts, competition levels, and the specific items procured.

What are the potential risks associated with awarding a contract of this size on a sole-source basis?

The primary risk associated with awarding a $24.1 million contract on a sole-source basis is the potential for paying a higher price than would be achieved through competition. Without competing the requirement, the government loses the leverage that multiple bidders provide to drive down costs. There's also a risk of reduced innovation, as the sole provider may have less incentive to improve products or processes. Furthermore, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single contractor, potentially leading to contractor lock-in and limiting future sourcing flexibility. Ensuring adequate oversight and robust negotiation is crucial to mitigate these risks.

What is ITT Corporation's track record with defense contracts, particularly with the U.S. Special Operations Command?

ITT Corporation, now L3Harris Technologies following a merger, has a long history of providing defense and aerospace products and services. They have been a significant contractor for various U.S. military branches, including the Department of Defense and its various components like U.S. Special Operations Command (SOCOM). Their portfolio often includes electronic warfare systems, communication equipment, and other specialized technologies. While this specific contract is for the ALQ-211 LRU-1, ITT/L3Harris has a broad track record with SOCOM, often securing contracts for mission-critical systems. Their performance history on previous contracts would be a key factor in the justification for a sole-source award, suggesting a level of established capability and reliability.

What are the implications of the firm fixed-price contract type for this procurement?

The firm fixed-price (FFP) contract type means that the price is set and not subject to adjustment based on the contractor's cost experience. This provides the U.S. Special Operations Command with cost certainty, as the total expenditure is known upfront, assuming the contractor meets all contract requirements. For the contractor, ITT Corporation, it means they assume the risk of cost overruns. If their costs to produce the ALQ-211 LRU-1 exceed the contract price, their profit margin will decrease or they may incur a loss. Conversely, if they can produce the components for less than the agreed-upon price, their profit will increase. This contract type incentivizes the contractor to control costs efficiently.

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, 07014

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $24,133,923

Exercised Options: $24,133,923

Current Obligation: $24,133,923

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: H9224106D0001

IDV Type: IDC

Timeline