DoD's $20M U2 Optics Support Contract Awarded to Goodrich Corporation Raises Value Concerns

Contract Overview

Contract Amount: $20,106,546 ($20.1M)

Contractor: Goodrich Corporation

Awarding Agency: Department of Defense

Start Date: 2020-11-01

End Date: 2023-03-31

Contract Duration: 880 days

Daily Burn Rate: $22.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: U2 OPTICS SUPPORT AND SUSTAINMENT SERVICES

Place of Performance

Location: WESTFORD, MIDDLESEX County, MASSACHUSETTS, 01886

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $20.1 million to GOODRICH CORPORATION for work described as: U2 OPTICS SUPPORT AND SUSTAINMENT SERVICES Key points: 1. The contract's value-for-money is questionable given the lack of competition and cost-plus-fixed-fee structure. 2. Sole-source awards limit price discovery and potentially inflate costs for taxpayers. 3. The duration of the contract (880 days) suggests a long-term need for these specialized services. 4. Performance context is limited due to the lack of publicly available performance metrics. 5. The contract falls within the Defense sector, specifically supporting intelligence, surveillance, and reconnaissance (ISR) capabilities. 6. The absence of small business set-asides or subcontracting plans warrants further investigation into broader economic impact.

Value Assessment

Rating: questionable

The $20.1 million contract for U2 Optics Support and Sustainment Services was awarded to Goodrich Corporation on a sole-source basis. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The cost-plus-fixed-fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can incentivize cost overruns if not managed tightly. The total obligated amount is $20,106,545.89, with a base period of performance from November 1, 2020, to March 31, 2023. Further analysis of incurred costs and the fixed fee relative to the services provided is needed to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. The Department of Defense likely determined that only Goodrich Corporation possessed the necessary specialized knowledge, facilities, or proprietary technology to fulfill the requirements for U2 optics support and sustainment. The lack of competition means that potential cost savings that could arise from a competitive bidding process were not realized. This approach can be justified in cases of unique capabilities but raises concerns about price reasonableness.

Taxpayer Impact: Sole-source awards limit the government's ability to negotiate the best possible price, potentially leading to higher costs for taxpayers. Without competition, there is less pressure on the contractor to offer competitive pricing.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the U2 aircraft, ensuring the continued functionality of critical ISR platforms. The services delivered include sustainment and support for specialized optics systems essential for intelligence gathering. The geographic impact is likely concentrated around U2 operational bases and maintenance facilities, primarily within the United States. Workforce implications may include specialized technicians and engineers employed by Goodrich Corporation or its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-plus-fixed-fee structure could incentivize cost overruns if not closely monitored.
Limited transparency into performance metrics makes value assessment difficult.
Absence of small business participation raises questions about broader economic inclusion.

Positive Signals

Contract awarded to a known entity (Goodrich Corporation) with potential expertise in the required area.
Contract supports critical national security assets (U2 aircraft).
Defined period of performance provides a clear scope for the services.

Sector Analysis

The defense optics and sensor market is a highly specialized segment within the broader aerospace and defense industry. Companies operating in this space require significant R&D investment and possess unique technological capabilities. Contracts for sustainment and support of advanced ISR platforms like the U2 are crucial for maintaining operational readiness. Benchmarking this contract's value is challenging without comparable sole-source awards, but the overall defense spending on ISR systems runs into billions annually, highlighting the strategic importance of such contracts.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) indicator is also false. This suggests that small businesses were not specifically targeted for participation in this contract, either as prime contractors or subcontractors. The implications for the small business ecosystem are that opportunities for growth and revenue generation within this specific contract vehicle were likely limited, potentially concentrating the economic benefits with the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to monitor incurred costs and the reasonableness of the fixed fee. Transparency is limited as performance metrics and detailed cost breakdowns are not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

U2 Aircraft Sustainment Programs
ISR Platform Support Contracts
Aerospace and Defense Optics Manufacturing
Defense Intelligence, Surveillance, and Reconnaissance (ISR) Systems

Risk Flags

Sole-source award limits competition
Cost-plus-fixed-fee contract type carries cost overrun risk
Lack of publicly available performance metrics hinders value assessment
No small business subcontracting plan identified

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.1 million to GOODRICH CORPORATION. U2 OPTICS SUPPORT AND SUSTAINMENT 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 $20.1 million.

What is the period of performance?

Start: 2020-11-01. End: 2023-03-31.

What is Goodrich Corporation's track record with similar sole-source defense contracts?

Goodrich Corporation, now part of Raytheon Technologies, has a long history of supplying complex systems and components to the Department of Defense. While specific details on all sole-source awards are not always public, the company is known for its expertise in areas such as sensors, avionics, and ISR technologies. Analyzing past sole-source awards to Goodrich for similar specialized equipment or sustainment services could provide context on pricing trends and performance history. However, without access to detailed contract data, a comprehensive assessment of their track record on sole-source awards remains challenging. It is important to note that sole-source awards are often granted due to unique capabilities or proprietary technology, which can limit direct comparisons.

How does the $20.1 million contract value compare to other U2 program sustainment efforts?

Direct comparison of this $20.1 million contract value to other U2 program sustainment efforts is difficult without access to a comprehensive database of all U2-related contracts, especially those awarded on a sole-source basis. The U2 program is a long-standing intelligence, surveillance, and reconnaissance (ISR) platform, and its sustainment likely involves numerous contracts for various components, maintenance, upgrades, and support services. The value of this specific contract is tied to 'optics support and sustainment services,' which suggests a specialized niche. Broader U2 sustainment contracts could range from millions to hundreds of millions of dollars depending on their scope, duration, and the technologies involved. The sole-source nature of this award also complicates direct value benchmarking against competitively procured services.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for specialized optics?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for specialized optics include potential cost overruns and a lack of price competition. Since the contractor is reimbursed for allowable costs plus a fixed fee, there is less incentive to control expenses compared to fixed-price contracts. If the government's oversight is insufficient, costs can escalate beyond initial estimates. The sole-source nature means the government did not explore potentially lower prices from competing vendors. For specialized optics, the complexity and proprietary nature of the technology can further exacerbate these risks, making it harder for the government to independently verify cost reasonableness or technical performance without significant in-house expertise.

What is the strategic importance of U2 optics support to the Department of Defense?

The U2 Dragon Lady aircraft has been a cornerstone of U.S. intelligence, surveillance, and reconnaissance (ISR) capabilities for decades, particularly in high-altitude intelligence gathering. Its optics systems are critical for capturing detailed imagery and sensor data essential for national security decision-making, threat assessment, and battlefield awareness. Maintaining the functionality and performance of these advanced optics is paramount to ensuring the U2 platform remains effective. Therefore, dedicated support and sustainment services for these specialized systems are strategically vital to preserving the nation's ISR assets and maintaining a technological edge over adversaries.

Are there any indications of historical spending patterns for U2 optics support with Goodrich Corporation?

Analyzing historical spending patterns for U2 optics support with Goodrich Corporation requires access to historical contract databases. Without such data, it's difficult to ascertain specific trends. However, given that Goodrich (now part of Raytheon) is a long-standing defense contractor, it is plausible they have been involved in supporting U2 systems for a significant period. If this $20.1 million contract represents a continuation or expansion of previous support, it might indicate a consistent need for their services. Conversely, if it's a new award, it could signify a shift in support strategy or technology. A review of past contract awards, including their value, duration, and competition type, would be necessary to identify any discernible spending patterns.

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: Rockwell Collins Australia PTY Limited

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: $20,213,035

Exercised Options: $20,106,546

Current Obligation: $20,106,546

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $1,088,219

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