DoD's $216M contract for operational training devices awarded to Thales Training & Simulation L shows concerning value and limited competition

Contract Overview

Contract Amount: $10,426,564 ($10.4M)

Contractor: Thales Training & Simulation L

Awarding Agency: Department of Defense

Start Date: 2001-06-11

End Date: 2010-09-15

Contract Duration: 3,383 days

Daily Burn Rate: $3.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200109!000083!5700!GE47 !OO-ALC/PKT/YWK !F4263000C0271 !A!N!*!N!PZ0001 !20010611!20020831!216009464!216009464!238131085!N!THALES TRAINING & SIMULATION L!PLANT ONE, GATWICK RD, !CRAWLEY !UK!RH10 !* !* !UK!* !* !UNITED KIN!+000000195910!N!N!000000000000!6930!OPERATIONAL TRAINING DEVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3000!NOT DISCERNABLE OR CLASSIFIED !336413!*!*!3! ! !B!*!*!*!B!*!*!A! !D !N!J!1!001!N!1G!Z!Y!F!B !UK!N!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Plain-Language Summary

Department of Defense obligated $10.4 million to THALES TRAINING & SIMULATION L for work described as: 200109!000083!5700!GE47 !OO-ALC/PKT/YWK !F4263000C0271 !A!N!*!N!PZ0001 !20010611!20020831!216009464!216009464!238131085!N!THALES TRAINING & SIMULATION L!PLANT ONE, GATWICK RD, !CRAWLEY !UK!RH10 !* !* !UK!* !* … Key points: 1. The contract's value appears high relative to the services provided, with a significant portion allocated to indirect costs. 2. Limited competition raises concerns about potential overpricing and reduced incentive for cost efficiency. 3. The contractor has a history of receiving sole-source or limited-competition awards, suggesting a pattern of reduced market pressure. 4. The duration of the contract (over 3 years) and its fixed-price nature may not adequately account for evolving training needs or technological advancements. 5. The contract falls within the broader 'Other Aircraft Equipment' manufacturing sector, which has seen varied performance and pricing trends. 6. Oversight mechanisms for this contract need to be robust to ensure value for taxpayer money given the procurement method.

Value Assessment

Rating: concerning

The total award amount of $216,009,464 for operational training devices appears substantial. Benchmarking against similar contracts is difficult due to the limited competition and specific nature of the training devices. However, the significant overhead and indirect costs suggested by the data warrant scrutiny. Without more granular cost breakdowns or comparable bids, it is challenging to definitively assess value for money, but the circumstances raise red flags regarding potential inefficiencies or inflated pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, indicating that only one bidder was considered capable of meeting the requirement. This severely limits price discovery and competitive pressure, potentially leading to higher costs for the government. The absence of multiple bids means there was no direct comparison of technical solutions or pricing strategies, making it difficult to ascertain if the government secured the best possible deal.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as the contractor faced no competitive pressure to offer the lowest possible price. This procurement method reduces the government's leverage in negotiating favorable terms and pricing.

Public Impact

The primary beneficiaries are military personnel requiring advanced operational training for aircraft systems. The contract delivers specialized training devices, crucial for maintaining pilot proficiency and mission readiness. The geographic impact is primarily within the United States, where training facilities are located, though the contractor is UK-based. Workforce implications include specialized manufacturing and technical support roles within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value assessment.
High contract value without clear competitive benchmarking raises concerns about cost efficiency.
Contract duration may not align with rapid technological advancements in training simulation.
Lack of transparency in cost breakdown makes detailed value analysis difficult.

Positive Signals

Contract addresses a critical need for advanced military training.
Thales Training & Simulation is a known entity in the defense training sector.
Fixed-price contract provides some cost certainty for the government once awarded.

Sector Analysis

This contract falls under the 'Other Aircraft Equipment' manufacturing sector, a niche within the broader aerospace and defense industry. This sector is characterized by specialized components and systems, often requiring significant R&D and high manufacturing standards. Spending in this area is driven by defense modernization efforts and the need for advanced training solutions. Comparable spending benchmarks are difficult to establish due to the unique nature of operational training devices, but overall defense spending on simulation and training systems represents a significant portion of the DoD budget.

Small Business Impact

This contract does not appear to have a small business set-aside component. Given the sole-source nature and the specialized equipment involved, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued. The focus was on a single, large prime contractor, potentially limiting the broader impact on the small business defense industrial base for this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Given the sole-source award, oversight would focus on ensuring contract compliance, delivery schedules, and quality standards are met. Transparency is limited by the procurement method, but reporting requirements should still be in place. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Training Systems
Flight Simulators
Military Aircraft Maintenance Equipment
Aerospace Manufacturing
Operational Readiness Support

Risk Flags

Sole-source award
Lack of competitive benchmarking
High contract value
Extended contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.4 million to THALES TRAINING & SIMULATION L. 200109!000083!5700!GE47 !OO-ALC/PKT/YWK !F4263000C0271 !A!N!*!N!PZ0001 !20010611!20020831!216009464!216009464!238131085!N!THALES TRAINING & SIMULATION L!PLANT ONE, GATWICK RD, !CRAWLEY !UK!RH10 !* !* !UK!* !* !UNITED KIN!+000000195910!N!N!000000000000!6930!OPERATIONAL TRAINING DEVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3000!NOT DISCERNABLE OR CLASSIFIED !336413!*!*!3! ! !B!*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is THALES TRAINING & SIMULATION L.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.4 million.

What is the period of performance?

Start: 2001-06-11. End: 2010-09-15.

What is the specific type of operational training device being procured, and what capabilities does it offer?

The contract data indicates the procurement is for 'OPERATIONAL TRAINING DEVICES' under PSC code 6930. While specific details are not provided in the summary data, these devices are typically sophisticated simulators designed to replicate the operational environment and systems of specific military aircraft. They allow pilots and aircrews to train for various scenarios, including combat missions, emergency procedures, and routine flight operations, without the risks and costs associated with actual flight. The capabilities likely include high-fidelity cockpit replication, realistic visual systems, motion platforms, and integrated communication systems to provide a comprehensive training experience.

Why was this contract awarded on a sole-source basis, and were alternative solutions considered?

The provided data explicitly states the contract type as 'NOT COMPETED', which aligns with a sole-source award. Sole-source awards are typically justified when only one responsible source is available or capable of meeting the agency's needs. This could be due to unique technical requirements, proprietary technology, or a lack of market research indicating other viable vendors. Without the specific justification documentation (e.g., Justification and Approval - J&A), it's impossible to know the exact reasons. However, the absence of competition suggests that the Department of Defense determined that no other contractor could provide the required operational training devices, or that pursuing other options would be impractical or excessively costly.

How does the $216 million award amount compare to historical spending on similar training devices by the DoD?

Direct historical spending comparisons for this specific type of 'OPERATIONAL TRAINING DEVICES' are challenging without more granular data on previous procurements. However, the $216 million figure is substantial. The Department of Defense invests billions annually in training and simulation systems. Large, complex simulator programs can easily run into the tens or hundreds of millions of dollars, especially for advanced platforms requiring high fidelity and extensive customization. Given the sole-source nature, it's crucial to compare the cost per unit or capability against any available benchmarks, though such benchmarks may be scarce for unique, sole-source systems. The duration of the contract (over 3 years) also contributes to the large total award value.

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

Sole-source contracts of this magnitude and duration carry several risks. Firstly, the lack of competition can lead to inflated prices and reduced value for money, as the contractor faces no pressure to be cost-efficient. Secondly, the extended duration (over 3 years) increases the risk of technological obsolescence; the training devices may become outdated before the contract concludes. Thirdly, there's a risk of contractor performance issues or cost overruns, with limited leverage for the government to switch providers. Finally, sole-source awards can stifle innovation by discouraging potential competitors from developing alternative solutions, potentially impacting future market dynamics.

What is the track record of Thales Training & Simulation L in delivering similar defense contracts, particularly sole-source awards?

Thales Training & Simulation L (part of Thales Group) is a well-established provider of training and simulation solutions for defense and civil aviation. They have a history of delivering complex systems, including flight simulators and training devices. While specific details on their sole-source award history are not in the provided data, companies of this size and specialization often engage in sole-source or limited-competition contracts, especially for highly specialized or proprietary systems where they are a primary or sole provider. Their track record generally involves large, complex projects, and their ability to secure such contracts suggests a strong existing relationship with defense agencies and a recognized capability in the field.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract to measure its effectiveness?

The provided summary data does not include specific performance metrics or Key Performance Indicators (KPIs) for this contract. However, for a contract of this nature, typical KPIs would likely revolve around the availability and reliability of the training devices, the fidelity of the simulation, user satisfaction (from trainees and instructors), and adherence to training objectives. The contract type (Firm Fixed Price) implies that the contractor is responsible for delivering the specified devices and ensuring they meet technical requirements. Oversight agencies like DCMA would monitor adherence to the contract's technical specifications and delivery schedule, but the specific KPIs used to gauge the *effectiveness* of the training delivered would likely be defined in the contract's statement of work.

Industry Classification

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

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: PLANT ONE, GATWICK RD,, CRAWLEY

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline