DoD's $24M Rockwell Collins contract for wireless communications equipment shows limited competition and fair value
Contract Overview
Contract Amount: $24,054,787 ($24.1M)
Contractor: Rockwell Collins, Inc.
Awarding Agency: Department of Defense
Start Date: 2017-02-22
End Date: 2020-11-30
Contract Duration: 1,377 days
Daily Burn Rate: $17.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ACAT III PRODUCTION CVRI1
Place of Performance
Location: CEDAR RAPIDS, LINN County, IOWA, 52498
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $24.1 million to ROCKWELL COLLINS, INC. for work described as: ACAT III PRODUCTION CVRI1 Key points: 1. The contract was awarded on a sole-source basis, raising concerns about price discovery and potential overpayment. 2. While the contractor has a strong track record, the lack of competition limits benchmarking opportunities. 3. The contract duration of nearly four years suggests a long-term need for these specialized wireless communications. 4. The firm fixed-price structure shifts some risk to the contractor, but the sole-source nature complicates value assessment. 5. This spending falls within the broader category of defense communications equipment, a critical but often high-cost sector.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its sole-source nature and the lack of publicly available comparable data for highly specialized defense communication systems. The firm fixed-price contract type suggests an attempt to control costs, but without competitive bids, it's difficult to definitively assess if the $24 million represents optimal value for money. The contract's duration and scope imply a significant investment in a specific technological capability.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Rockwell Collins, Inc., was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when there is insufficient time for full and open competition. The absence of multiple bidders means there was no direct price competition, which can lead to higher costs for the government compared to a competed contract.
Taxpayer Impact: Taxpayers may have paid a premium for this equipment due to the lack of competitive bidding. Without competing offers, the government had less leverage to negotiate the lowest possible price.
Public Impact
The Department of Defense is the primary beneficiary, receiving critical wireless communication equipment. This equipment likely supports military operations, command and control, and intelligence gathering. The geographic impact is primarily within the Department of Defense's operational theaters, though manufacturing may occur in specific locations. The contract supports specialized roles within the defense industry, potentially impacting a niche workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential savings.
- Lack of transparency in the justification for sole-source award.
- Potential for cost overruns if not closely managed due to lack of competitive pressure.
Positive Signals
- Firm fixed-price contract shifts some financial risk to the contractor.
- Rockwell Collins is a known entity in defense contracting, suggesting some level of reliability.
- Contract addresses a specific, likely critical, defense communication need.
Sector Analysis
This contract falls within the broader Information Technology and Defense sectors, specifically focusing on specialized wireless communications equipment manufacturing. The market for such niche defense electronics is often characterized by a limited number of highly capable suppliers, leading to a higher concentration of market share among a few key players. Spending in this area is driven by evolving military requirements and technological advancements.
Small Business Impact
The data indicates this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the information provided. The prime contractor, Rockwell Collins, Inc., is a large aerospace and defense company. This suggests the contract primarily benefits large, established defense manufacturers rather than fostering small business participation.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides some cost control, but the sole-source award necessitates careful monitoring of scope and deliverables to ensure accountability. Transparency regarding the justification for the sole-source award and performance metrics would be key oversight elements.
Related Government Programs
- Defense Communications Systems
- Military Radio and Wireless Equipment
- Tactical Communication Systems
- Aerospace and Defense Electronics Manufacturing
Risk Flags
- Sole-source award may indicate limited market competition.
- Lack of transparency in justification for sole-source award.
- Potential for higher costs compared to a competed contract.
Tags
defense, department-of-defense, rockwell-collins, sole-source, wireless-communications-equipment, firm-fixed-price, definitive-contract, iowa, radio-and-television-broadcasting-and-wireless-communications-equipment-manufacturing, acats-iii-production-cvri1
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.1 million to ROCKWELL COLLINS, INC.. ACAT III PRODUCTION CVRI1
Who is the contractor on this award?
The obligated recipient is ROCKWELL COLLINS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $24.1 million.
What is the period of performance?
Start: 2017-02-22. End: 2020-11-30.
What is the specific justification provided for awarding this contract on a sole-source basis to Rockwell Collins, Inc.?
The provided data indicates the contract was awarded as 'NOT COMPETED' and is a 'SOLE SOURCE'. While the specific justification document is not included, common reasons for sole-source awards in defense contracting include the existence of unique capabilities or proprietary technology held by a single vendor, urgent and compelling needs where full and open competition is not feasible, or when only one responsible source is capable of providing the required product or service. For specialized wireless communications equipment, it's plausible that Rockwell Collins possessed specific technological expertise or existing systems that met the Department of Defense's precise requirements, making a competitive process impractical or overly time-consuming.
How does the $24 million contract value compare to similar defense wireless communication equipment procurements?
Directly comparing the $24 million value of this contract to similar procurements is difficult without more specific details on the exact type of wireless communication equipment, its capabilities, and the quantities involved. Defense procurements for specialized electronics can vary significantly in cost based on technological sophistication, performance requirements, and production volumes. However, $24 million represents a substantial investment, suggesting a significant quantity or highly advanced system. Benchmarking would ideally involve comparing unit costs or total contract values for systems with comparable specifications, which is often challenging for sole-source, specialized defense items where market data is limited.
What are the primary risks associated with a sole-source contract of this magnitude?
The primary risks associated with a sole-source contract of this magnitude include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the procurement process. Taxpayers may not receive the best possible value for their money. Additionally, there's a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and increasing long-term costs. Effective oversight and rigorous negotiation are crucial to mitigate these risks.
What is Rockwell Collins' track record with the Department of Defense for similar contracts?
Rockwell Collins, Inc. (now part of Collins Aerospace, a Raytheon Technologies company) has a long and established history of providing a wide range of avionics, communication, and defense systems to the Department of Defense and other government agencies. They are a significant player in the aerospace and defense industry, known for their expertise in areas such as communication systems, navigation, electronic warfare, and mission systems. While specific performance data for this particular $24 million contract isn't detailed here, their general track record suggests they are a capable and experienced supplier for complex defense electronics.
What is the expected impact of this contract on the specific market segment for defense wireless communications equipment?
This contract, awarded to a major incumbent like Rockwell Collins, reinforces their position within the defense wireless communications equipment market. As a sole-source award, it signifies a specific technological requirement that this contractor uniquely meets, potentially limiting opportunities for competitors in this particular instance. However, the overall market for defense communications is dynamic, driven by evolving threats and technological advancements, which generally encourages innovation and competition among a few key large players in the long run. This contract likely represents a stable revenue stream for Rockwell Collins in a critical capability area.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA861616R6072
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 52498
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: $28,075,484
Exercised Options: $24,830,421
Current Obligation: $24,054,787
Actual Outlays: $291,204
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $191,495
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-02-22
Current End Date: 2020-11-30
Potential End Date: 2020-11-30 00:00:00
Last Modified: 2025-07-17
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