DoD's $11.5M Contract for Aircraft Parts to Ferrotherm, LLC Lacked Competition

Contract Overview

Contract Amount: $11,557,049 ($11.6M)

Contractor: Ferrotherm, LLC

Awarding Agency: Department of Defense

Start Date: 1983-09-15

End Date: 2011-01-04

Contract Duration: 9,973 days

Daily Burn Rate: $1.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MIGRATED DATA

Place of Performance

Location: AKRON, SUMMIT County, OHIO, 44306

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $11.6 million to FERROTHERM, LLC for work described as: MIGRATED DATA Key points: 1. Significant spending of $11.5M on aircraft parts. 2. Sole-source award to Ferrotherm, LLC raises competition concerns. 3. Long contract duration of 9973 days (over 27 years). 4. No small business participation indicated. 5. Contract type is Firm Fixed Price, offering cost certainty.

Value Assessment

Rating: questionable

The contract value of $11.5M over nearly 28 years suggests a potentially high per-unit cost, especially given the lack of competitive bidding. Without benchmarks, it's difficult to assess value, but the extended duration and sole-source nature warrant scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for an $11.5M contract likely resulted in higher costs for taxpayers than if multiple vendors had vied for the business.

Public Impact

Taxpayers may have overpaid due to the absence of competitive bidding. The extended contract period raises questions about the ongoing need and potential for obsolescence. Lack of transparency in the procurement process limits public understanding of the value received.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Long contract duration
No small business participation

Positive Signals

Firm Fixed Price contract type

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is crucial for defense readiness, but competitive procurement is vital to ensure cost-effectiveness.

Small Business Impact

The data indicates no small business participation in this contract. This is a missed opportunity to support small businesses and potentially foster innovation through diverse supplier engagement.

Oversight & Accountability

The sole-source nature of this large contract raises questions about the oversight applied during its award and management. A review of the justification for not competing the award is warranted.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Long contract duration
Potential for overpricing
No small business involvement
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.6 million to FERROTHERM, LLC. MIGRATED DATA

Who is the contractor on this award?

The obligated recipient is FERROTHERM, 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 $11.6 million.

What is the period of performance?

Start: 1983-09-15. End: 2011-01-04.

What was the justification for awarding this contract on a sole-source basis, and was it adequately documented?

The justification for a sole-source award typically involves specific circumstances, such as a unique capability, urgent need, or lack of available sources. Without access to the contract file, it's impossible to determine the specific justification used. However, for a contract of this magnitude and duration, a robust and well-documented justification is expected to ensure fair and responsible use of taxpayer funds.

How does the per-unit cost of these aircraft parts compare to market rates, given the lack of competition?

Without competitive bidding, it is challenging to establish a reliable benchmark for the per-unit cost. The absence of competition means there was no market pressure to drive down prices. A thorough cost analysis or comparison with similar parts procured competitively would be necessary to assess if the government received fair market value for these components over the contract's lifespan.

What measures were in place to ensure the quality and continued relevance of the aircraft parts over the contract's 27-year duration?

The extended duration of nearly three decades necessitates robust quality assurance and configuration management. It is crucial that the Defense Contract Management Agency (DCMA) implemented stringent oversight to ensure parts met evolving technical standards and were not rendered obsolete. Regular reviews and potential contract modifications would be essential to maintain relevance and performance.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: 4758 WARNER RD STE 1, CLEVELAND, OH, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $11,627,991

Exercised Options: $11,557,049

Current Obligation: $11,557,049

Contract Characteristics

Cost or Pricing Data: YES

Timeline