Army awards $13.7M contract for helicopter parts, highlighting potential value concerns due to sole-source nature

Contract Overview

Contract Amount: $13,882,956 ($13.9M)

Contractor: Mcdonnell Douglas Helicopter Company

Awarding Agency: Department of Defense

Start Date: 2004-05-27

End Date: 2008-10-30

Contract Duration: 1,617 days

Daily Burn Rate: $8.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200408!003750!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!DAAH2301G0024 !A!N! !N!0077 ! !20040527!20050129!047800297!006265946!009256819!N!MCDONNELL DOUGLAS HELICOPTER C!5000 E MCDOWELL ROAD !MESA !AZ!85215!46000!013!04!MESA !MARICOPA !ARIZONA !+000013689385!N!N!000000000000!1005!GUNS, THROUGH 30 MM !A1A!AIRFRAMES AND SPARES !000 !* !332912!E! !4! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!Z!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $13.9 million to MCDONNELL DOUGLAS HELICOPTER COMPANY for work described as: 200408!003750!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!DAAH2301G0024 !A!N! !N!0077 ! !20040527!20050129!047800297!006265946!009256819!N!MCDONNELL DOUGLAS HELICOPTER C!5000 E MCDOWELL ROAD !MESA !AZ!85215!46000!013!04!MESA !MARI… Key points: 1. The contract's value of $13.7 million warrants scrutiny given the lack of competition. 2. Sole-source awards can lead to inflated pricing and reduced value for taxpayer dollars. 3. The duration of the contract (over 4 years) increases the risk associated with a non-competitive award. 4. Performance context is limited without competitive benchmarks. 5. This contract falls within the Defense sector, specifically for aircraft components. 6. The absence of small business participation is noted.

Value Assessment

Rating: questionable

The contract value of $13.7 million for helicopter parts requires careful evaluation. Without competitive bidding, it is difficult to ascertain if this price represents fair market value. The sole-source nature of the award means there was no opportunity to compare pricing against other potential suppliers, which is a key indicator of value for money. Further analysis would be needed to benchmark this against similar procurements for comparable parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits the opportunity for price discovery and negotiation. The lack of competition suggests potential reasons such as unique capabilities or proprietary technology, but it also raises concerns about whether a more competitive approach could have yielded better pricing for the government.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This contract's value could have been reduced if multiple vendors had the opportunity to bid.

Public Impact

The primary beneficiary is the Department of the Army, which will receive essential helicopter parts. The services delivered include the provision of fluid power valve and hose fittings. The geographic impact is primarily within Arizona, where the contractor is located. Workforce implications are likely concentrated at the contractor's facility in Mesa, Arizona.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices.
Sole-source award limits transparency in pricing.
Long contract duration increases exposure to potential overpricing.
No small business participation noted.

Positive Signals

Contract awarded to a known entity (McDonnell Douglas Helicopter Company).
Contract is for essential aircraft components, supporting military readiness.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components. The market for specialized helicopter parts can be niche, sometimes leading to fewer suppliers. However, the absence of competition for a contract of this value is notable. Comparable spending benchmarks would typically involve analyzing other contracts for similar parts or systems, ideally those awarded through competitive processes.

Small Business Impact

This contract did not include a small business set-aside, and the data indicates no small business participation. The prime contractor, McDonnell Douglas Helicopter Company, is a large business. This suggests that opportunities for small businesses to participate in this specific procurement, either as prime contractors or subcontractors, were not prioritized or available.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to contract performance and delivery schedules. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Procurement
Helicopter Component Manufacturing
Department of Defense Supply Chain Management
Fluid Power Systems

Risk Flags

Sole-source award
Potential for overpricing
Lack of competitive benchmarking
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.9 million to MCDONNELL DOUGLAS HELICOPTER COMPANY. 200408!003750!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!DAAH2301G0024 !A!N! !N!0077 ! !20040527!20050129!047800297!006265946!009256819!N!MCDONNELL DOUGLAS HELICOPTER C!5000 E MCDOWELL ROAD !MESA !AZ!85215!46000!013!04!MESA !MARICOPA !ARIZONA !+000013689385!N!N!000000000000!1005!GUNS, THROUGH 30 MM !A1A!AIRFRAMES AND SPARES !000 !* !332912!E! !4! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is MCDONNELL DOUGLAS HELICOPTER COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $13.9 million.

What is the period of performance?

Start: 2004-05-27. End: 2008-10-30.

What is the track record of McDonnell Douglas Helicopter Company with government contracts?

McDonnell Douglas Helicopter Company, now part of Boeing, has a long history of supplying aircraft and components to the U.S. military. Their track record includes the production of various helicopter models and associated parts. While specific performance details for this particular contract are not detailed in the provided data, the company's extensive experience suggests a capacity to fulfill complex aerospace manufacturing requirements. However, past performance does not negate the concerns associated with a sole-source award, as it does not guarantee the best possible pricing or value for the government.

How does the $13.7 million value compare to similar helicopter parts contracts?

Benchmarking the $13.7 million value of this contract against similar helicopter parts procurements is challenging without more specific details on the exact parts and quantities. However, given that this was a sole-source award for a duration of over four years, the value could potentially be higher than if it had been competitively bid. Typically, contracts for specialized components can range significantly based on complexity, technology, and market demand. A competitive process would have provided a clearer indication of fair market value by allowing multiple vendors to submit bids, revealing the prevailing market price for these items.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract are related to cost and value. Without competition, there is a significant risk of paying a premium price for the parts, as the contractor faces no pressure to offer the lowest possible cost. This lack of competitive tension can lead to reduced value for taxpayer money. Additionally, sole-source awards can sometimes indicate a lack of market availability or a reliance on a single supplier, which can create supply chain vulnerabilities. The extended duration of the contract further amplifies these risks over time.

What is the expected effectiveness of this contract in meeting Army aviation needs?

The effectiveness of this contract in meeting Army aviation needs hinges on the contractor's ability to deliver the specified fluid power valve and hose fittings on time and to the required specifications. As a sole-source award, the government is relying on McDonnell Douglas Helicopter Company's established capabilities. While the company's history suggests technical proficiency, the effectiveness from a value perspective is questionable due to the lack of competition. The Army's ability to maintain its helicopter fleet depends on the reliable supply of these critical components, and this contract aims to ensure that supply, albeit without the benefit of competitive pricing.

What are the historical spending patterns for this type of procurement within the Department of the Army?

Historical spending patterns for fluid power valves and hose fittings within the Department of the Army would likely show a mix of competitive and sole-source awards, depending on the specific part and market conditions. Contracts for common or standardized parts are typically competed to ensure best value. However, for highly specialized or proprietary components, sole-source awards may be necessary. Analyzing past spending would reveal the frequency of sole-source awards for similar items and the associated price points, which could help contextualize the $13.7 million value of this particular contract and identify any trends in non-competitive procurement for aviation parts.

Are there any potential alternatives or substitutes for the parts being procured?

The potential for alternatives or substitutes for the fluid power valve and hose fittings procured under this contract would depend on the specific technical requirements and the design of the helicopter systems they are intended for. If these are standard off-the-shelf components, then competition might have been more feasible. However, if they are highly specialized, proprietary, or integrated into a unique system, alternatives may be limited. The decision to award sole-source often implies that suitable alternatives were not readily available or that a specific part was required for compatibility or performance reasons. Further technical analysis would be needed to confirm the availability of substitutes.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Fluid Power Valve and Hose Fitting Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 5000 E MCDOWELL RD, MESA, AZ, 04

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAH2301G0024

IDV Type: IDC

Timeline