DoD's $338M aircraft manufacturing contract with Textron Aviation Defense LLC awarded in 1999, spanning over a decade

Contract Overview

Contract Amount: $338,863,443 ($338.9M)

Contractor: Textron Aviation Defense LLC

Awarding Agency: Department of Defense

Start Date: 1999-10-08

End Date: 2010-08-15

Contract Duration: 3,964 days

Daily Burn Rate: $85.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Defense

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67207

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $338.9 million to TEXTRON AVIATION DEFENSE LLC for work described as: Key points: 1. Contract value of $338.86M over 11 years suggests a significant, long-term investment in aircraft manufacturing. 2. Awarded under full and open competition, indicating a broad market search and potential for competitive pricing. 3. The contract's duration and Time and Materials (T&M) pricing structure may present cost control challenges. 4. Performance context is aircraft manufacturing, a complex sector requiring specialized expertise and significant capital investment. 5. Sector positioning is within Defense, a major area of federal spending with unique procurement requirements. 6. The absence of small business set-asides or subcontracting requirements warrants further investigation into broader economic impact.

Value Assessment

Rating: fair

The contract's total value of $338.86 million over nearly 11 years averages approximately $30.8 million annually. Benchmarking this against similar long-term aircraft manufacturing contracts is difficult without more specific details on the aircraft type and services rendered. The Time and Materials pricing model, while flexible, can lead to cost overruns if not meticulously managed, making a direct value-for-money assessment challenging without detailed cost breakdowns and performance metrics. The relatively low number of bids (2) for a contract of this magnitude, even under full and open competition, might suggest potential limitations in market responsiveness or specialized requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that the solicitation was broadly advertised to all responsible sources. However, only two bids were received. This limited number of bidders, despite open competition, could indicate a highly specialized market, significant barriers to entry for potential competitors, or perhaps that the contract terms were not sufficiently attractive to a wider range of firms. The limited competition may have impacted the government's ability to secure the most competitive pricing.

Taxpayer Impact: While open competition was intended, the low number of bidders means taxpayers may not have benefited from the full spectrum of potential price reductions that a more robust bidding process could have yielded.

Public Impact

The primary beneficiaries are the Department of Defense, receiving critical aircraft manufacturing services. Services delivered likely include the production, modification, or maintenance of aircraft, supporting military readiness. The geographic impact is centered around Textron Aviation Defense LLC's facilities, primarily in Kansas (st: KS, sn: KANSAS). Workforce implications include employment opportunities for skilled labor in aerospace manufacturing and related fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost escalation if not closely monitored.
Low number of bidders (2) in a full and open competition may indicate limited market interest or high barriers to entry.
Long contract duration (nearly 11 years) increases the risk of scope creep and potential for outdated technology if not managed proactively.
Lack of specific small business participation requirements could limit opportunities for smaller firms in the supply chain.

Positive Signals

Awarded under full and open competition, which generally promotes a wider search for qualified contractors.
The contractor, Textron Aviation Defense LLC, is an established entity in the aerospace industry.
The contract addresses a core defense need for aircraft manufacturing, indicating strategic alignment with agency goals.

Sector Analysis

The aircraft manufacturing sector is a critical component of the defense industrial base, characterized by high technological sophistication, stringent quality standards, and significant capital investment. This contract falls within the broader aerospace and defense industry, which is a major recipient of federal funds, particularly from the Department of Defense. Comparable spending benchmarks would depend heavily on the specific type of aircraft and services procured, but contracts of this value over extended periods are common for major defense platforms or sustainment programs.

Small Business Impact

This contract does not appear to have included specific small business set-aside provisions, nor is there explicit mention of subcontracting goals. Given the nature of aircraft manufacturing, it's possible that larger prime contractors like Textron Aviation Defense LLC engage small businesses indirectly through their supply chain. However, the absence of direct set-asides or mandated subcontracting targets suggests that the direct economic impact on the small business ecosystem for this specific contract may be limited.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be embedded in the contract's terms and conditions, including performance standards and payment schedules. Transparency is facilitated through contract databases like FPDS, though detailed cost breakdowns and performance reports are often considered sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Procurement, Defense
Aerospace Manufacturing Contracts
Department of Defense Major Contracts
Long-Term Defense Services Contracts

Risk Flags

Potential for cost overruns due to T&M pricing
Limited competition despite open solicitation
Long contract duration may increase risk
Lack of explicit small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $338.9 million to TEXTRON AVIATION DEFENSE LLC. See the official description on USAspending.

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 $338.9 million.

What is the period of performance?

Start: 1999-10-08. End: 2010-08-15.

What specific types of aircraft or services were covered under this contract?

The provided data indicates the contract falls under the Product Service Code (PSC) '364110' for Aircraft Manufacturing. However, the specific models of aircraft or the precise nature of the manufacturing services (e.g., new production, modification, overhaul, repair) are not detailed in the summary data. This level of specificity is crucial for understanding the contract's scope and for accurate benchmarking against similar procurements. Without this information, it's challenging to assess if the $338.86 million value is commensurate with the delivered goods or services.

How did the final cost compare to the initial estimated cost, given the Time and Materials (T&M) pricing structure?

The Time and Materials (T&M) pricing structure allows for costs to fluctuate based on the actual labor hours and material costs incurred. The data provided shows the awarded amount ($338,863,443.40) and the period of performance (1999-10-08 to 2010-08-15), spanning 3964 days. However, it does not include information on initial estimates or how the final expenditure compared to those estimates. T&M contracts inherently carry a risk of cost growth if not managed tightly through CLIN-level ceilings, labor hour limitations, and robust oversight to prevent inefficiencies or unnecessary work.

What were the key performance indicators (KPIs) and how did Textron Aviation Defense LLC perform against them?

Key performance indicators (KPIs) for a contract of this nature in aircraft manufacturing would typically include on-time delivery, adherence to quality standards (e.g., defect rates), cost control within T&M ceilings, and compliance with technical specifications. The provided data does not include specific performance metrics or evaluation results for Textron Aviation Defense LLC. Assessing contractor performance would require access to contract performance reports, quality assurance reviews, and potentially past performance information from the agency.

What is the historical spending trend for aircraft manufacturing within the Department of Defense, and how does this contract compare?

The Department of Defense is consistently one of the largest federal spenders on aircraft and related manufacturing. Annual spending in this category can range from tens to hundreds of billions of dollars, depending on modernization programs and operational tempo. This specific contract, valued at approximately $338.86 million over 11 years, represents a relatively modest portion of the DoD's overall aircraft procurement budget during that period. It likely supported a specific program or a fleet sustainment effort rather than a large-scale acquisition of new major platforms.

Were there any significant contract modifications or change orders issued during the contract's lifecycle?

The provided summary data does not detail contract modifications or change orders. For a contract spanning nearly 11 years, it is common to have modifications for various reasons, such as adjustments to scope, schedule changes, incorporation of new technologies, or resolution of unforeseen issues. Analyzing these modifications would be essential to fully understand the contract's evolution, the total final cost, and the reasons behind any deviations from the original terms. Such information is typically available in detailed contract files.

What is the market size and competitive landscape for the specific type of aircraft manufacturing services procured?

The market for aircraft manufacturing is substantial, particularly within the defense sector, involving a limited number of large, specialized prime contractors and a vast network of subcontractors. The specific niche for this contract (PSC 364110) likely involves established platforms or specialized military aircraft. The competitive landscape, as indicated by only two bidders in this 'full and open' competition, suggests a concentrated market where only a few firms possess the necessary technical capabilities, security clearances, and production capacity to meet the government's requirements.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 201 S GREENWICH, WICHITA, KS, 67207

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline