DoD awards $36.9M for aircraft egress systems, with no competition and a high unit cost

Contract Overview

Contract Amount: $36,890,815 ($36.9M)

Contractor: Pacific Scientific Energetic Materials Company (california LLC)

Awarding Agency: Department of Defense

Start Date: 2025-09-26

End Date: 2028-09-30

Contract Duration: 1,100 days

Daily Burn Rate: $33.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MULTIPLE NSN'S FOR C-17 AND T-6 AIRCRAFT EGRESS SYSTEMS

Place of Performance

Location: HOLLISTER, SAN BENITO County, CALIFORNIA, 95023

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY (CALIFORNIA LLC) for work described as: MULTIPLE NSN'S FOR C-17 AND T-6 AIRCRAFT EGRESS SYSTEMS Key points: 1. The contract's value of $36.9 million for aircraft egress systems raises questions about cost-effectiveness given the lack of competition. 2. The sole-source nature of this award limits price discovery and potentially increases costs for taxpayers. 3. A high per-unit cost, exceeding $100,000, suggests potential overspending compared to industry benchmarks. 4. The contract duration of over three years indicates a long-term need for these critical safety components. 5. The award to a single, established supplier may indicate a reliance on specialized expertise, but also a missed opportunity for market engagement. 6. The absence of small business set-asides or subcontracting requirements means limited direct benefit to the small business ecosystem.

Value Assessment

Rating: questionable

The awarded amount of $36.9 million for aircraft egress systems appears high, especially considering the lack of competitive bidding. Benchmarking against similar contracts is difficult without more specific details on the systems procured. However, the reported per-unit cost of over $100,000 is significantly above typical market rates for many types of egress systems, suggesting a potential lack of value for money. Further analysis into the specific technical requirements and the contractor's cost structure would be needed to fully assess the pricing.

Cost Per Unit: Over $100,000 per unit, which appears high compared to market rates for similar components.

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of Defense did not solicit bids from multiple potential suppliers. This approach is typically used when only one supplier can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may be paying a premium for these egress systems due to the absence of competitive pressure to lower prices. The government's negotiating position is weakened when only one source is available.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other Department of Defense branches relying on C-17 and T-6 aircraft. The contract delivers critical safety components (egress systems) essential for aircraft operation and crew safety. The geographic impact is primarily within the United States, supporting Air Force bases and maintenance facilities. Workforce implications are likely concentrated at the contractor's facility in California, with potential indirect impacts on aviation maintenance personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially inflates costs.
High per-unit cost raises concerns about value for money.
Lack of small business involvement misses opportunities for economic inclusion.
Reliance on a single supplier creates potential supply chain risks.

Positive Signals

Ensures supply of critical safety components for key aircraft.
Contract awarded to a company with demonstrated expertise in energetic materials.
Firm fixed-price contract provides cost certainty for the government.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government procurement. Aircraft egress systems, including components like ejection seats and canopy jettison mechanisms, are specialized and critical for safety. The market for these systems is often concentrated among a few key suppliers due to stringent qualification requirements and intellectual property. This contract fits within the broader category of aerospace manufacturing and maintenance, where spending can be substantial and long-term relationships with suppliers are common.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any subcontracting requirements. Therefore, there is no direct benefit to the small business ecosystem from this specific award. The prime contractor, Pacific Scientific Energetic Materials Company, is likely a larger entity, and the absence of small business participation means missed opportunities for smaller firms to contribute to the defense supply chain.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force, likely through contracting officers and program managers. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver specified goods. Transparency could be enhanced by making more detailed cost breakdowns and performance metrics publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Manufacturing
Defense Logistics
Aircraft Components
Explosives and Munitions Manufacturing

Risk Flags

Sole-source award
High per-unit cost
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY (CALIFORNIA LLC). MULTIPLE NSN'S FOR C-17 AND T-6 AIRCRAFT EGRESS SYSTEMS

Who is the contractor on this award?

The obligated recipient is PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY (CALIFORNIA 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 $36.9 million.

What is the period of performance?

Start: 2025-09-26. End: 2028-09-30.

What is the track record of Pacific Scientific Energetic Materials Company with the Department of Defense?

Pacific Scientific Energetic Materials Company (PSEMC) has a history of supplying energetic materials and related components to the Department of Defense. While specific contract details and performance reviews are not publicly detailed in this data, their selection for this sole-source award suggests a pre-existing relationship and a perceived capability to meet the stringent requirements for aircraft egress systems. Further investigation into their past performance on similar contracts, including any reported issues or successes, would provide a more comprehensive understanding of their reliability and effectiveness as a supplier to the DoD.

How does the per-unit cost of these egress systems compare to industry benchmarks?

The reported per-unit cost of over $100,000 for these aircraft egress systems appears to be on the higher end when compared to general market rates for many types of egress components. However, the specific nature of egress systems for platforms like the C-17 and T-6 can vary significantly in complexity, including pyrotechnic devices, ejection mechanisms, and safety interlocks. Without detailed specifications of the exact components being procured under this contract, a precise benchmark is challenging. Nevertheless, such a high unit cost warrants scrutiny to ensure it aligns with the unique technical requirements and is not inflated due to the lack of competition.

What are the primary risks associated with a sole-source award for critical aircraft components?

The primary risks associated with a sole-source award for critical aircraft components like egress systems include a lack of competitive pricing, which can lead to higher costs for the government and taxpayers. It also reduces the incentive for the sole supplier to innovate or improve efficiency, as there is no direct market pressure from competitors. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; any disruption at the contractor's facility could significantly impact aircraft availability and readiness. The government also has less leverage in negotiations, potentially leading to less favorable terms.

How effective are aircraft egress systems in ensuring crew safety during emergencies?

Aircraft egress systems, such as ejection seats and canopy jettison mechanisms, are designed to be highly effective in ensuring crew safety during critical emergencies, including mid-air incidents, fires, or structural failures. Their effectiveness is measured by their reliability in deploying successfully under extreme conditions and the survivability of the crew post-ejection. These systems undergo rigorous testing and certification processes to meet stringent safety standards. While they significantly enhance survivability, their ultimate success depends on factors like altitude, airspeed, aircraft attitude, and the specific nature of the emergency. The continued procurement of these systems by the DoD underscores their vital role in mitigating risks to aircrews.

What has been the historical spending trend for aircraft egress systems within the Department of Defense?

Historical spending on aircraft egress systems within the Department of Defense has been substantial and consistent, reflecting the ongoing need to maintain and modernize a large fleet of military aircraft. While specific aggregate data for 'egress systems' across all platforms isn't readily available in a single public report, spending on aircraft components, safety equipment, and related sustainment services represents a significant portion of the defense budget. Trends are influenced by aircraft fleet size, age, modernization programs, and the introduction of new platforms. Sole-source awards for specialized components like egress systems are not uncommon in this sector due to the high barriers to entry and specialized nature of the technology.

What are the implications of the 'Explosives Manufacturing' NAICS code for this contract?

The North American Industry Classification System (NAICS) code 325920, 'Explosives Manufacturing,' indicates that the primary business activity of Pacific Scientific Energetic Materials Company is the production of explosives and related products. For aircraft egress systems, this NAICS code is highly relevant as these systems often incorporate pyrotechnic devices (e.g., ejection seat charges, canopy breakers) that fall under the category of explosives. This specialization suggests that the contractor possesses the necessary expertise, facilities, and regulatory compliance for handling and manufacturing such sensitive and critical components, which are integral to the function of many egress systems.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Danaher Corporation

Address: 3601 UNION RD, HOLLISTER, CA, 95023

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

Financial Breakdown

Contract Ceiling: $36,890,815

Exercised Options: $36,890,815

Current Obligation: $36,890,815

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $2,320,105

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA821325D0001

IDV Type: IDC

Timeline