Alliant Techsystems Operations LLC awarded $19.1M for AIM-9P rocket motors, with limited competition

Contract Overview

Contract Amount: $19,074,698 ($19.1M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2012-12-03

End Date: 2017-04-30

Contract Duration: 1,609 days

Daily Burn Rate: $11.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AIM-9P ROCKET MOTORS (FIRST ARTICLES AND NRE)

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $19.1 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: AIM-9P ROCKET MOTORS (FIRST ARTICLES AND NRE) Key points: 1. The contract's value of $19.1 million for rocket motors suggests a significant investment in defense capabilities. 2. Limited competition for this contract may indicate specialized requirements or a lack of alternative suppliers. 3. The Cost Plus Fixed Fee (CPFF) contract type introduces potential for cost overruns if not closely managed. 4. The duration of over 4 years (1609 days) points to a long-term need for these components. 5. The contract's focus on first articles and Non-Recurring Engineering (NRE) suggests development or initial production phases. 6. The absence of small business set-asides indicates the primary contractor is likely a large entity.

Value Assessment

Rating: fair

Benchmarking the value of $19.1 million for AIM-9P rocket motors is challenging without specific details on the quantity and technical specifications. However, the CPFF contract type inherently carries higher risk for the government compared to fixed-price contracts, as it allows the contractor to recover all allowable costs plus a fixed fee. This can lead to higher final costs if not managed diligently. The contract's focus on first articles and NRE suggests initial investment costs, which can be variable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed openly, suggesting that either there were few qualified sources or specific circumstances limited the bidding process. The 'NOT AVAILABLE FOR COMPETITION' designation implies a sole-source or limited competition scenario. This lack of broad competition can potentially lead to higher prices than if multiple vendors had vied for the contract, as the government has fewer options to drive down costs through negotiation.

Taxpayer Impact: Taxpayers may face higher costs due to the limited competitive landscape, as the government may not have achieved the most favorable pricing possible. This also raises questions about whether alternative, potentially more cost-effective, solutions were overlooked.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches of the U.S. military requiring AIM-9P rocket motors for their operations. The services delivered include the production of first articles and Non-Recurring Engineering (NRE) for AIM-9P rocket motors, crucial for missile systems. The geographic impact is primarily within the United States, supporting domestic defense manufacturing and supply chains. Workforce implications include employment for engineers, technicians, and manufacturing personnel at Alliant Techsystems Operations LLC and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not rigorously managed.
Limited competition may result in suboptimal pricing for the government.
The focus on NRE and first articles indicates early-stage costs which can be unpredictable.
Lack of transparency in the competition process raises concerns about fairness and best value.
The contract duration of over 4 years requires sustained oversight to ensure performance.

Positive Signals

Award to a known entity, Alliant Techsystems Operations LLC, suggests a degree of established capability.
The contract addresses a specific defense need for critical missile components.
The fixed fee component of the CPFF contract provides some predictability in contractor profit.
The contract is for a definitive contract, implying a clear scope of work.
The contract is for ammunition manufacturing, a core defense industrial base capability.

Sector Analysis

This contract falls within the defense sector, specifically focusing on the manufacturing of missile components. The market for specialized defense components like rocket motors is often characterized by high barriers to entry due to technical expertise, security clearances, and established relationships with government agencies. Spending in this area is driven by national security requirements and the need to maintain and modernize military hardware. Comparable spending benchmarks would typically be found within other contracts for similar missile systems or components, often awarded through specialized defense procurement channels.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) field is also false, suggesting that there are no explicit requirements for the prime contractor to subcontract with small businesses for this specific award. This means that opportunities for small businesses to participate in this contract are likely limited to those that may be identified and engaged by Alliant Techsystems Operations LLC as part of their broader supply chain, rather than through mandated set-asides.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, specifically within the Air Force. The Cost Plus Fixed Fee structure necessitates close monitoring of incurred costs to ensure they are allowable and reasonable. Accountability measures would involve performance reviews, milestone tracking, and adherence to the contract's technical specifications. Transparency might be limited due to the nature of defense procurement and the 'not available for competition' status, though contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

AIM-9 Sidewinder Missile Program
Defense Ammunition Procurement
Aerospace Manufacturing Contracts
Cost-Plus-Fixed-Fee Contracts
Department of Defense Research and Development

Risk Flags

Limited Competition
Cost-Plus Contract Type
Long Contract Duration
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.1 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. AIM-9P ROCKET MOTORS (FIRST ARTICLES AND NRE)

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS LLC.

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 $19.1 million.

What is the period of performance?

Start: 2012-12-03. End: 2017-04-30.

What is the specific quantity of AIM-9P rocket motors being procured under this contract, and how does this quantity influence the per-unit cost?

The provided data does not specify the exact quantity of AIM-9P rocket motors. The total award amount is $19,074,698. Without the quantity, calculating a precise per-unit cost is impossible. However, the contract covers 'first articles and NRE,' which implies initial production runs and development costs rather than mass production. These initial phases often have higher per-unit costs due to setup, testing, and engineering efforts. To assess value, one would need to compare this to historical NRE and first article costs for similar missile components or obtain the quantity to benchmark against potential mass production unit costs.

How does the $19.1 million contract value compare to historical spending on AIM-9P rocket motors or similar components?

Direct historical spending comparisons for this specific contract are not available in the provided data. However, the $19.1 million award for first articles and NRE suggests a significant investment in the initial stages of procuring or developing these rocket motors. To provide a comprehensive comparison, one would need to analyze historical contract awards for AIM-9P motors, or comparable missile propulsion systems, from the Department of Defense. This analysis should consider the time period, quantity, contract type (e.g., fixed-price vs. cost-plus), and inflation to establish a meaningful benchmark. The current award's value should be assessed in the context of whether it represents a reasonable cost for the specified development and initial production phase.

What are the specific risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this procurement?

The primary risk of a Cost Plus Fixed Fee (CPFF) contract for the government is the potential for cost overruns. While the contractor's fee is fixed, their allowable costs are reimbursed. If the contractor's costs exceed initial estimates, the total contract value increases, potentially beyond what might have been achieved with a fixed-price contract. This necessitates robust government oversight to scrutinize incurred costs, ensure they are reasonable and allocable to the contract, and prevent scope creep. For this AIM-9P rocket motor procurement, risks include unforeseen technical challenges during NRE or first article production that drive up material or labor costs, which the government would ultimately bear.

Given the 'NOT AVAILABLE FOR COMPETITION' status, what does this imply about the availability of alternative suppliers for AIM-9P rocket motors?

The 'NOT AVAILABLE FOR COMPETITION' designation strongly implies that there are very few, if any, alternative suppliers capable of producing the AIM-9P rocket motors to the required specifications and security standards. This could be due to proprietary technology, specialized manufacturing capabilities, existing tooling, or specific certifications held by Alliant Techsystems Operations LLC. It suggests a potential market concentration or a unique capability held by the awarded contractor. This situation limits the government's leverage in price negotiations and highlights a potential supply chain vulnerability.

What is the track record of Alliant Techsystems Operations LLC in delivering defense components, particularly missile-related systems?

Alliant Techsystems Operations LLC (now part of Northrop Grumman) has a long and established track record in the defense industry, particularly in areas such as munitions, propulsion systems, and aerospace components. They are a significant defense contractor with extensive experience in producing complex systems for various military branches. While specific details on their performance for AIM-9P rocket motors under this particular contract are not provided, their general history suggests they possess the technical expertise and manufacturing capacity required for such procurements. A deeper dive into their past performance ratings, delivery history on similar contracts, and any past disputes or issues would be necessary for a complete assessment.

What are the potential performance implications of awarding this contract for over 4 years (1609 days)?

A contract duration of over 4 years for first articles and NRE for AIM-9P rocket motors suggests a long-term commitment and potentially complex development or initial production process. This extended timeline allows for thorough testing, refinement, and integration of the components. However, it also requires sustained government oversight to ensure the contractor remains on track, manages costs effectively, and meets evolving requirements. Potential performance implications include the risk of technological obsolescence if requirements change significantly over the contract period, or conversely, the benefit of having a stable, long-term supplier for critical components, ensuring availability for future military needs.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 210 STATE ROUTE 956, KEYSER, WV, 26726

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

Financial Breakdown

Contract Ceiling: $19,074,698

Exercised Options: $19,074,698

Current Obligation: $19,074,698

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $3,461,501

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline