Spirit Aerosystems awarded $18.4M for large-scale structural demonstration, focusing on advanced composite materials

Contract Overview

Contract Amount: $18,395,518 ($18.4M)

Contractor: Spirit Aerosystems Inc

Awarding Agency: Department of Defense

Start Date: 2024-09-05

End Date: 2029-09-30

Contract Duration: 1,851 days

Daily Burn Rate: $9.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: BONDED UNITIZED COMPOSITES LARGE-SCALE STRUCTURAL DEMONSTRATION

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67210

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $18.4 million to SPIRIT AEROSYSTEMS INC for work described as: BONDED UNITIZED COMPOSITES LARGE-SCALE STRUCTURAL DEMONSTRATION Key points: 1. Contract value of $18.4 million for a 5-year research and development effort. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. The contract type is Cost Plus Fixed Fee, which can shift some cost risk to the government. 4. This award falls under R&D in Physical, Engineering, and Life Sciences, indicating a focus on innovation. 5. The project aims to demonstrate large-scale structural composite capabilities, a key area for aerospace advancement. 6. Spirit Aerosystems, the sole awardee, has a significant presence in aerospace manufacturing.

Value Assessment

Rating: good

The contract value of $18.4 million for a 5-year R&D effort appears reasonable for a large-scale structural demonstration project. Benchmarking against similar R&D contracts for advanced materials development would provide further context. The Cost Plus Fixed Fee (CPFF) structure is common for R&D where final costs are uncertain, but it requires careful government oversight to manage expenditures effectively. The fixed fee component provides incentive for the contractor to control costs within the estimated range.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit proposals. While the number of bidders is not specified, this approach generally fosters a competitive environment, which can lead to better pricing and innovative solutions. The government's decision to use full and open competition suggests confidence in the market's ability to provide suitable options for this advanced R&D requirement.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for cost savings and ensures that the government receives the best value through a wide range of proposals.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially the broader aerospace industry through advancements in composite materials. The project will deliver a large-scale structural demonstration, advancing the state-of-the-art in composite manufacturing and application. The geographic impact is centered in Kansas, where Spirit Aerosystems has significant operations. Workforce implications may include specialized engineering and manufacturing roles related to advanced composites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can lead to cost overruns if not managed diligently, as the government bears the majority of the cost risk.
The duration of the contract (over 4 years) necessitates sustained government oversight to ensure milestones are met and objectives are achieved.
Reliance on a single contractor for this specific demonstration may limit alternative approaches or solutions if unforeseen issues arise.

Positive Signals

Awarding to Spirit Aerosystems leverages an established aerospace manufacturer with significant experience in complex structures.
The focus on advanced composite materials aligns with strategic goals for lighter, stronger, and more efficient aerospace platforms.
Full and open competition, even if resulting in a single awardee, suggests a robust initial vetting process for qualified bidders.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on Research and Development for advanced materials. The market for aerospace composites is substantial and growing, driven by demand for fuel efficiency and performance enhancements in aircraft. This contract represents a targeted investment in next-generation structural technologies, aiming to mature capabilities that could be applied to future platforms. Comparable spending benchmarks would likely be found in other government R&D initiatives for materials science and advanced manufacturing.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the awardee is Spirit Aerosystems, a large aerospace manufacturer. There is no explicit mention of subcontracting requirements for small businesses within the provided data. The focus on large-scale structural demonstration suggests a project requiring significant resources and expertise typically found in larger firms, potentially limiting direct opportunities for small businesses unless they are part of the prime contractor's supply chain.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the contracting officer and program management office within the Department of the Air Force. Accountability measures will be tied to the achievement of project milestones and deliverables outlined in the contract. Transparency is facilitated through contract award databases, though detailed project progress reports may be internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Materials Research Programs
Aerospace Manufacturing Technology Development
Air Force Research Laboratory Contracts
Composite Materials Science Initiatives

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost escalations.
Long contract duration necessitates sustained program management and performance monitoring.
Reliance on a single large contractor may limit broader market engagement for specific components or innovations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.4 million to SPIRIT AEROSYSTEMS INC. BONDED UNITIZED COMPOSITES LARGE-SCALE STRUCTURAL DEMONSTRATION

Who is the contractor on this award?

The obligated recipient is SPIRIT AEROSYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $18.4 million.

What is the period of performance?

Start: 2024-09-05. End: 2029-09-30.

What is Spirit Aerosystems' track record with Cost Plus Fixed Fee (CPFF) contracts, particularly in R&D for the Department of Defense?

Spirit Aerosystems has a history of working with the Department of Defense on various contract types, including CPFF. Analyzing their past performance on similar R&D projects would reveal their ability to manage costs and deliver results within the government's expectations under this fee structure. Specific data on their historical CPFF awards, completion rates, and any cost variances would be crucial for a comprehensive assessment. Generally, CPFF contracts require robust government oversight to ensure contractor efficiency and prevent cost overruns, a dynamic that would apply to this current award.

How does the $18.4 million contract value compare to similar large-scale structural demonstration projects in the aerospace sector?

The $18.4 million value for a 5-year R&D effort focused on large-scale structural composite demonstration is within a plausible range for advanced aerospace technology development. However, direct comparisons are challenging without knowing the specific scope, complexity, and technological maturity targeted. Similar projects might involve developing and testing novel manufacturing techniques, validating new material properties under extreme conditions, or integrating advanced composites into full-scale structural components. Benchmarking against publicly available data for R&D contracts in areas like advanced airframes, propulsion systems, or next-generation materials would provide a more concrete understanding of whether this award represents a competitive price point for the intended outcome.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific R&D project?

The primary risk with a CPFF contract for this R&D project is the potential for cost overruns, as the government assumes the majority of the cost risk. While the contractor receives a fixed fee, they are incentivized to complete the work within the estimated cost to maximize their profit margin. However, unforeseen technical challenges inherent in R&D can lead to increased costs. Effective government oversight, including detailed cost tracking, milestone reviews, and scope management, is critical to mitigate this risk. Another risk is that the contractor might prioritize cost-saving measures that could compromise the quality or completeness of the demonstration if not carefully monitored.

What is the expected impact of this contract on the advancement of composite materials in aerospace applications?

This contract is expected to significantly advance the application of composite materials in aerospace by demonstrating their viability at a large scale. Success in this project could lead to the adoption of these advanced composites in future aircraft designs, potentially resulting in lighter, stronger, and more fuel-efficient platforms. The demonstration will likely validate new manufacturing processes, material performance characteristics, and integration techniques, thereby reducing the perceived risk for future programs considering similar technologies. This could accelerate the transition of laboratory-scale innovations into practical, flight-ready applications, enhancing overall aerospace capabilities.

How does this contract align with the Department of the Air Force's strategic objectives regarding advanced manufacturing and materials?

This contract directly aligns with the Department of the Air Force's strategic objectives to modernize its fleet and maintain technological superiority. Investing in advanced composite materials is crucial for developing next-generation aircraft that offer improved performance, reduced weight, and enhanced survivability. By funding large-scale demonstrations, the Air Force aims to mature these technologies, reduce acquisition risks, and pave the way for their integration into future weapon systems. This initiative supports broader DoD goals related to advanced manufacturing, innovation, and ensuring a competitive edge in aerospace technology.

What are the potential long-term economic implications for the Kansas region, given Spirit Aerosystems' base there?

The long-term economic implications for Kansas could be positive, stemming from Spirit Aerosystems' role as a major employer and innovator in the aerospace sector. This contract supports high-skilled jobs in research, engineering, and advanced manufacturing within the state. Successful demonstration of large-scale composite structures could lead to further investment and expansion of Spirit's capabilities in Kansas, potentially attracting related businesses and strengthening the state's aerospace ecosystem. Furthermore, advancements made under this contract could enhance the competitiveness of Kansas-based aerospace firms in future defense and commercial programs.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Spirit Aerosystems Holdings, Inc.

Address: 3801 S OLIVER ST, WICHITA, KS, 67210

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: $25,134,423

Exercised Options: $18,395,518

Current Obligation: $18,395,518

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline