Teledyne, Inc. awarded $44.7M for contingency operations, a sole-source contract with no small business set-aside
Contract Overview
Contract Amount: $44,758,966 ($44.8M)
Contractor: Teledyne, Inc
Awarding Agency: Department of Defense
Start Date: 2007-01-30
End Date: 2012-10-11
Contract Duration: 2,081 days
Daily Burn Rate: $21.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CONTINGENCY OPERATIONS
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127
Plain-Language Summary
Department of Defense obligated $44.8 million to TELEDYNE, INC for work described as: CONTINGENCY OPERATIONS Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract duration of over 5 years suggests a long-term need for these contingency operations. 3. Lack of competition indicates potential risks related to contractor performance and innovation. 4. The cost-plus-fixed-fee structure may incentivize cost overruns, requiring robust oversight. 5. Performance context is limited due to the 'contingency operations' designation, making direct benchmarking difficult. 6. Sector positioning is within aircraft manufacturing, a critical but often specialized area.
Value Assessment
Rating: questionable
The contract's value of $44.7 million over approximately five years for contingency operations is difficult to benchmark without specific performance details. As a sole-source award, there's no direct comparison to market rates derived from competitive bidding. The cost-plus-fixed-fee (CPFF) pricing structure, while common for uncertain requirements, carries inherent risks of cost escalation. Without more granular data on the services rendered and the fixed fee component, a definitive value-for-money assessment is challenging, but the lack of competition suggests a potential for suboptimal pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. While justified in certain circumstances, sole-source awards generally result in less favorable pricing compared to fully competed contracts.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government could not ensure it received the lowest possible price for these contingency operations.
Public Impact
The primary beneficiaries are likely the Department of Defense and specifically the Air Force, receiving support for critical contingency operations. Services delivered are related to aircraft manufacturing, suggesting support for aviation readiness or specialized equipment. The geographic impact is centered in California, where Teledyne, Inc. is located, though the ultimate operational impact could be global. Workforce implications include employment for individuals within Teledyne's aircraft manufacturing division.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and may lead to higher costs for taxpayers.
- Cost-plus-fixed-fee contract type can incentivize cost overruns if not closely monitored.
- Lack of transparency regarding the specific nature of 'contingency operations' hinders performance evaluation.
- Long contract duration (over 5 years) increases exposure to potential performance issues or changing requirements.
Positive Signals
- Teledyne, Inc. is a known entity in the aerospace and defense sector, suggesting some level of established capability.
- The contract is for contingency operations, implying support for critical national security needs.
- The award is managed by the Department of the Air Force, a major defense agency with established procurement processes.
Sector Analysis
The aircraft manufacturing sector is a critical component of the defense industrial base, characterized by high barriers to entry, complex supply chains, and significant R&D investment. Spending in this sector often involves specialized components and services for military platforms. Benchmarking this contract is challenging without specific details on the 'contingency operations' it supports, but overall defense spending on aircraft and related manufacturing is substantial, often in the tens of billions annually.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses within the aircraft manufacturing supply chain related to this specific contract were likely limited or non-existent.
Oversight & Accountability
Oversight for this contract would fall under the Department of the Air Force's contracting and program management offices. Given the sole-source nature and CPFF structure, robust oversight is crucial to monitor costs, ensure performance, and verify the necessity of expenditures. Inspector General investigations could be initiated if performance or cost issues arise. Transparency is limited by the classification of 'contingency operations'.
Related Government Programs
- Aircraft Manufacturing Services
- Defense Readiness Support
- Contingency Contracting
- Sole-Source Defense Procurements
- Air Force Aviation Support
Risk Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
- Ambiguous scope ('contingency operations')
Tags
defense, department-of-defense, air-force, teledyne-inc, aircraft-manufacturing, contingency-operations, sole-source, cost-plus-fixed-fee, california, delivery-order, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.8 million to TELEDYNE, INC. CONTINGENCY OPERATIONS
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 $44.8 million.
What is the period of performance?
Start: 2007-01-30. End: 2012-10-11.
What specific services or products were provided under this $44.7 million contract for contingency operations?
The provided data indicates the contract was for 'CONTINGENCY OPERATIONS' awarded to TELEDYNE, INC. under the 'Aircraft Manufacturing' product service code (PSC). However, the specific nature of these operations, the products manufactured, or the services rendered are not detailed in the provided summary. Contingency operations can encompass a wide range of activities, from logistical support and maintenance to the production of specialized equipment or components needed during unforeseen events or military deployments. Without further information, it is impossible to ascertain the precise deliverables.
Why was this contract awarded on a sole-source basis instead of being competed?
Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency that precludes full and open competition. For this contract, the reason for the sole-source award is not explicitly stated in the provided data. It could be due to the highly specialized nature of Teledyne's capabilities in aircraft manufacturing relevant to the specific contingency operation, or potentially a situation where competition was deemed impractical or not in the government's best interest at the time of award. Further investigation into the justification documentation would be required to understand the precise rationale.
How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost to taxpayers?
The Cost Plus Fixed Fee (CPFF) contract type allows the contractor to recover all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some cost certainty for the contractor's profit, the 'cost-plus' element means that the total cost to the government can fluctuate based on actual expenses. If the contractor's costs are higher than anticipated, the total price paid by the government will increase. This structure can incentivize contractors to incur costs, as they are reimbursed for them, and requires robust government oversight to ensure costs are reasonable, allocable, and necessary to prevent potential cost overruns and protect taxpayer interests.
What is the historical spending pattern for Teledyne, Inc. with the Department of Defense for similar services?
The provided data only details one specific contract awarded to Teledyne, Inc. for $44.7 million. To assess historical spending patterns, a broader search of federal procurement databases would be necessary. This would involve examining all contracts awarded to Teledyne, Inc. by the Department of Defense (and other agencies) over several fiscal years, categorizing them by service type (e.g., aircraft manufacturing, R&D, support services), and analyzing the total dollar value and contract types. Without this broader dataset, it's impossible to establish a historical spending trend or compare this specific award to their typical contract profile with the DoD.
What are the risks associated with a contract duration of over 5 years for contingency operations?
A contract duration exceeding five years for contingency operations presents several risks. Firstly, the nature of 'contingency operations' can be inherently unpredictable, meaning requirements may change significantly over such a long period, potentially rendering the original scope of work obsolete or inefficient. Secondly, long-term sole-source contracts can lead to complacency and reduced contractor vigilance regarding cost control and performance optimization. Thirdly, the government locks in pricing and terms for an extended duration, potentially missing out on more favorable market conditions or technological advancements that might arise. Finally, extended durations increase the risk of contractor performance degradation or the emergence of unforeseen issues that are harder to rectify mid-contract.
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
Financial Breakdown
Contract Ceiling: $44,758,966
Exercised Options: $44,758,966
Current Obligation: $44,758,966
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F3365703G4306
IDV Type: IDC
Timeline
Start Date: 2007-01-30
Current End Date: 2012-10-11
Potential End Date: 2012-10-11 00:00:00
Last Modified: 2021-10-15
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