Raytheon Aircraft Company awarded $1.4B fixed-price contract for fixed-wing aircraft airframes and spares

Contract Overview

Contract Amount: $1,395,147,014 ($1.4B)

Contractor: Textron Aviation Defense LLC

Awarding Agency: Department of Defense

Start Date: 2001-12-28

End Date: 2012-09-30

Contract Duration: 3,929 days

Daily Burn Rate: $355.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200211!000030!5700!GU47 !ASC/YTK !F3365701C0022 !A!N! !N! !20011228!20090228!007482011!788153588!001339159!N!RAYTHEON AIRCRAFT COMPANY !10511 E CENTRAL AVE !WICHITA !KS!67206!79000!173!20!WICHITA !SEDGWICK !KANSAS !+000193250689!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !3000!NOT DISCERNABLE OR CLASSIFIED !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !C!N!J!1!001!N!1G!Z!N!E! ! !Y!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67207

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $1.40 billion to TEXTRON AVIATION DEFENSE LLC for work described as: 200211!000030!5700!GU47 !ASC/YTK !F3365701C0022 !A!N! !N! !20011228!20090228!007482011!788153588!001339159!N!RAYTHEON AIRCRAFT COMPANY !10511 E CENTRAL AVE !WICHITA !KS!67206!79000!173!20!WICHITA !SEDGWICK !KANSAS !+000193250689!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRF… Key points: 1. Contract value of $1.4B represents significant investment in aircraft manufacturing. 2. Sole-source award suggests limited market competition or specific contractor capabilities. 3. Long contract duration of over 10 years indicates a sustained need for these services. 4. Fixed-price contract type shifts cost risk to the contractor, potentially stabilizing government expenditure. 5. The contract falls under the 'Aircraft Manufacturing' NAICS code, a key sector for defense procurement. 6. Geographic concentration in Kansas highlights regional economic impact.

Value Assessment

Rating: fair

The contract value of $1.4 billion for aircraft manufacturing is substantial. Without specific benchmarks for comparable fixed-wing aircraft airframes and spares, a precise value-for-money assessment is challenging. However, the fixed-price nature of the contract suggests that the government has negotiated a ceiling price, which can be advantageous if costs are managed effectively by the contractor. The long duration of the contract implies a consistent need, but also raises questions about potential price escalation over time if not managed through contract modifications.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Raytheon Aircraft Company, was solicited. This typically occurs when there is a lack of competition due to unique capabilities, proprietary technology, or urgent needs where only one source can meet the requirement. The absence of competition means that price discovery through market forces was not utilized, potentially leading to a higher price than if multiple bids were received.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from competitive bidding, which could have driven down costs. The government relied on negotiation to secure a fair price, but the potential for overpayment exists without market validation.

Public Impact

The primary beneficiaries are likely the Department of Defense, which receives the fixed-wing aircraft and spares. The contract supports the production and supply of critical aviation components. The geographic impact is concentrated in Wichita, Kansas, supporting local employment and the aerospace industry. Workforce implications include jobs in manufacturing, engineering, and logistics at Raytheon Aircraft Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration may lead to price increases over time if not managed.
Lack of transparency in the sole-source justification requires careful review.
Potential for contractor lock-in due to specialized nature of aircraft components.

Positive Signals

Fixed-price contract shifts cost overrun risk to the contractor.
Long-term award indicates a stable, ongoing need met by a single provider.
Contract supports a critical defense capability.
Concentration of spending in one region can provide economic stability.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, complex supply chains, and significant government procurement. This contract for fixed-wing aircraft airframes and spares fits squarely within the 'Aircraft Manufacturing' industry. The total value of $1.4 billion is substantial, reflecting the high cost of producing military aircraft. Comparable spending benchmarks would typically involve other large-scale defense contracts for aircraft procurement or sustainment, which often run into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to Raytheon Aircraft Company. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The sole-source nature of the award limits opportunities for small businesses to compete directly for this prime contract, though they may be involved as subcontractors if Raytheon utilizes them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Contract Management Agency (DCMA). As a sole-source award, the justification and negotiation process would be subject to internal DoD review and potentially audits by the Government Accountability Office (GAO) or the DoD Inspector General. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to oversight.

Related Government Programs

Defense Procurement
Aircraft Manufacturing
Fixed-Wing Aircraft
Aerospace Industry Contracts
Military Sustainment

Risk Flags

Sole Source Justification
Long Contract Duration
Lack of Competition
Potential for Cost Overruns (if not managed)
Contractor Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.40 billion to TEXTRON AVIATION DEFENSE LLC. 200211!000030!5700!GU47 !ASC/YTK !F3365701C0022 !A!N! !N! !20011228!20090228!007482011!788153588!001339159!N!RAYTHEON AIRCRAFT COMPANY !10511 E CENTRAL AVE !WICHITA !KS!67206!79000!173!20!WICHITA !SEDGWICK !KANSAS !+000193250689!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !3000!NOT DISCERNABLE OR CLASSIFIED !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !C!N!J!1!001!N!1G!Z!N!E! ! !Y!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Who is the contractor on this award?

The obligated recipient is TEXTRON AVIATION DEFENSE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $1.40 billion.

What is the period of performance?

Start: 2001-12-28. End: 2012-09-30.

What is the historical spending trend for Raytheon Aircraft Company (or its successors) with the Department of Defense for similar aircraft components?

Analyzing historical spending requires access to a broader dataset of federal contracts. However, the provided data indicates a significant single award of $1.4 billion to Raytheon Aircraft Company for fixed-wing aircraft airframes and spares. Without prior contract data for this specific item or contractor, it's difficult to establish a trend. If this is a new requirement or a sole-source renewal, it suggests a consistent or increasing demand for these specific components. Further investigation into contract databases would be needed to identify previous awards and assess spending patterns over time.

How does the per-unit cost of the airframes and spares compare to industry benchmarks or similar government contracts?

The provided data does not include specific per-unit cost information for the airframes and spares, nor does it detail the quantities involved. The total award is $1.4 billion. To benchmark per-unit costs, we would need to know the exact type of aircraft, the number of units procured, and the specific components included in the 'spares' category. Without this granular detail, a direct comparison to industry benchmarks or similar government contracts is not feasible. The 'NOT DISCERNABLE OR CLASSIFIED' PSC code further complicates detailed cost analysis.

What specific risks are associated with a sole-source contract of this magnitude and duration?

A sole-source contract of this magnitude ($1.4 billion) and duration (over 10 years) carries several risks. Firstly, the lack of competition means the government may not be achieving the best possible price, as there's no market pressure to drive down costs. Secondly, there's a risk of contractor complacency or reduced innovation over the long term. Thirdly, the government becomes heavily reliant on a single supplier, creating potential vulnerabilities if the contractor faces financial difficulties, production issues, or changes strategic direction. Finally, the long duration increases the risk of price escalation through contract modifications if market conditions change significantly.

What is the track record of Raytheon Aircraft Company (or its parent/successor entities) in delivering complex aircraft components on time and within budget?

Raytheon Aircraft Company, now part of Textron Aviation Defense LLC, has a long history in the aerospace industry. While specific performance metrics for this particular $1.4 billion contract are not detailed in the provided data, Textron Aviation and its predecessor entities have generally been considered major players in aircraft manufacturing. Their track record typically involves producing a wide range of civilian and military aircraft. However, like any large defense contractor, they may have faced challenges with specific programs regarding cost overruns or schedule delays on other contracts. A comprehensive assessment would require reviewing past performance reports and contract histories for similar defense-related projects.

How does this contract align with the Department of Defense's broader strategic goals for aviation capabilities?

This contract for fixed-wing aircraft airframes and spares directly supports the Department of Defense's need for operational aviation assets. Fixed-wing aircraft are crucial for various missions, including transport, surveillance, combat support, and training. By awarding a substantial contract to ensure the supply of these components, the DoD is demonstrating a commitment to maintaining and potentially expanding its fixed-wing fleet capabilities. The specific type of aircraft and its role would further clarify its strategic alignment, but the sheer value suggests it addresses a significant and ongoing requirement within the DoD's aviation strategy.

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: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Textron Inc

Address: 201 S GREENWICH, WICHITA, KS, 67207

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline