DoD awards $42.8M for U-2 Optics Support, a sole-source contract with Goodrich Corporation

Contract Overview

Contract Amount: $42,804,368 ($42.8M)

Contractor: Goodrich Corporation

Awarding Agency: Department of Defense

Start Date: 2017-11-01

End Date: 2024-01-25

Contract Duration: 2,276 days

Daily Burn Rate: $18.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: U-2 OPTICS SUPPORT AND SERVICES.

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $42.8 million to GOODRICH CORPORATION for work described as: U-2 OPTICS SUPPORT AND SERVICES. Key points: 1. Contract awarded to Goodrich Corporation for U-2 optics support and services. 2. The contract has a duration of 2276 days, spanning from November 2017 to January 2024. 3. This is a sole-source award, indicating limited competition. 4. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 5. The contract value is $42,804,367.75. 6. The North American Industry Classification System (NAICS) code is 334511 for Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. 7. The place of performance is Massachusetts (MA).

Value Assessment

Rating: fair

Assessing the value for money on this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. The contract's duration and significant value suggest a critical need for U-2 optics support. Benchmarking against similar sole-source contracts for specialized aerospace components would be necessary for a comprehensive value assessment. The fixed fee component provides some cost control, but the "cost plus" aspect requires diligent oversight to ensure efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Goodrich Corporation, was solicited. This typically occurs when a specific capability or proprietary technology is required, or when there is insufficient time to conduct a full and open competition. The lack of competition limits price discovery and may result in higher costs for the government compared to a competitive procurement.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

The U-2 aircraft, a critical intelligence, surveillance, and reconnaissance (ISR) platform, benefits from continued operational readiness. The services provided ensure the functionality and maintenance of essential optics systems for the U-2. This contract supports the Department of Defense's intelligence gathering capabilities. The workforce implications are likely concentrated within Goodrich Corporation's specialized technical teams.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs.
Cost Plus Fixed Fee contract structure requires robust oversight to manage costs effectively.
Long contract duration (over 6 years) necessitates ongoing performance monitoring.

Positive Signals

Contract ensures continued support for a critical ISR platform (U-2).
Goodrich Corporation is likely a specialized provider with unique capabilities for U-2 optics.
The fixed fee component provides a defined profit margin, offering some predictability.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government investment. Contracts for specialized systems like U-2 optics support are often awarded to a limited number of prime contractors with established expertise. The market for such niche components is not typically characterized by broad competition due to high barriers to entry, including intellectual property, specialized manufacturing capabilities, and long-standing relationships with defense agencies. Spending in this sub-sector is driven by the need to maintain aging but critical platforms and to develop next-generation ISR capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, Goodrich Corporation, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem for this particular contract is unclear, though large prime contractors often utilize small businesses for various support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to scrutinize costs incurred and ensure the fixed fee is justified. Transparency regarding cost reporting and performance metrics would be crucial for effective accountability. Specific Inspector General (IG) jurisdiction would depend on the nature of any potential issues or investigations arising from the contract's execution.

Related Government Programs

U-2 Aircraft Sustainment
Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Aerospace Optics Manufacturing
Defense Contractor Support Services

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns without strict oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.8 million to GOODRICH CORPORATION. U-2 OPTICS SUPPORT AND SERVICES.

Who is the contractor on this award?

The obligated recipient is GOODRICH CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $42.8 million.

What is the period of performance?

Start: 2017-11-01. End: 2024-01-25.

What is Goodrich Corporation's track record with U-2 optics support and similar defense contracts?

Goodrich Corporation, now part of RTX (Raytheon Technologies), has a long history of providing complex systems and components for military aircraft, including the U-2 program. Their expertise in electro-optical systems, sensors, and related technologies makes them a logical incumbent for U-2 optics support. While specific details on past performance for this exact contract are not publicly detailed in the provided data, their established presence in the aerospace and defense sector, particularly with ISR platforms, suggests a significant level of experience. Reviewing past performance evaluations and contract awards for Goodrich (or its relevant divisions) on similar defense contracts would provide further insight into their reliability, quality of work, and ability to meet stringent military requirements.

How does the $42.8 million contract value compare to historical spending on U-2 optics support?

The provided data indicates a total award value of $42,804,367.75 for this specific contract, which ran from November 1, 2017, to January 25, 2024 (approximately 6.2 years). To compare this to historical spending, one would need to analyze prior contracts for U-2 optics support awarded to Goodrich or other entities. This would involve searching historical contract databases for similar services, noting their values, durations, and the specific components or systems supported. Without access to that historical data, it's difficult to definitively state if $42.8 million represents an increase, decrease, or stable level of spending. However, the sustained award over a long period suggests a consistent need and budget allocation for these services.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) contract for specialized aerospace components?

The primary risks associated with a sole-source CPFF contract for specialized aerospace components are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing and reduced incentive for the contractor to optimize costs. The government lacks the benefit of comparing multiple proposals to ensure the best value. Secondly, the CPFF structure, while providing a defined profit margin (the fixed fee), allows the contractor to recover all allowable costs. This can create a moral hazard where the contractor may be less diligent in controlling costs, as increased costs directly lead to higher overall contract value, even if the fee percentage remains constant. Robust government oversight, detailed cost auditing, and clear performance metrics are essential to mitigate these risks.

How effective is the U-2 platform, and what is the strategic importance of its optics systems?

The U-2 'Dragon Lady' remains a strategically vital platform for the U.S. Air Force and intelligence community due to its unique high-altitude reconnaissance capabilities. It provides persistent intelligence, surveillance, and reconnaissance (ISR) over challenging or denied areas where other assets may not be suitable or survivable. Its optics systems, including advanced electro-optical and infrared sensors, are critical for gathering high-resolution imagery and signals intelligence. The effectiveness of the U-2 lies in its ability to loiter for extended periods at altitudes above 70,000 feet, offering a persistent "eye in the sky." The continued investment in its support, including optics, underscores its ongoing strategic importance in providing actionable intelligence for national security decision-making, especially in scenarios requiring deep penetration and long-duration observation.

What are the potential implications of relying on a single contractor (Goodrich) for critical U-2 optics support?

Relying on a single contractor like Goodrich Corporation for critical U-2 optics support presents several implications. On the positive side, it ensures continuity of support from a potentially highly specialized and experienced provider, fostering a deep understanding of the system's intricacies. However, it also creates significant dependency. If Goodrich faces financial difficulties, production issues, or decides to exit the market, the U-2 program could face severe disruptions. Furthermore, the lack of competition means the government has limited leverage to negotiate prices or demand specific technological advancements beyond what the incumbent offers. This dependency underscores the importance of strong government oversight, maintaining close relationships with the contractor, and potentially exploring alternative solutions or developing organic government capabilities over the long term to ensure program resilience.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 7 TECHNOLOGY PARK DR, WESTFORD, MA, 01886

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: $42,804,368

Exercised Options: $42,804,368

Current Obligation: $42,804,368

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $1,600,726

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852816D0008

IDV Type: IDC

Timeline