Textron Aviation Defense LLC awarded $125.5M for T-6A aircraft procurement, a sole-source contract

Contract Overview

Contract Amount: $125,503,921 ($125.5M)

Contractor: Textron Aviation Defense LLC

Awarding Agency: Department of Defense

Start Date: 2009-08-14

End Date: 2015-08-31

Contract Duration: 2,208 days

Daily Burn Rate: $56.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IRAQ T-6A, FMS PROCUREMENT

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67207

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $125.5 million to TEXTRON AVIATION DEFENSE LLC for work described as: IRAQ T-6A, FMS PROCUREMENT Key points: 1. The contract value of $125.5 million represents a significant investment in aircraft manufacturing. 2. Sole-source procurement raises questions about potential price inflation and limited market testing. 3. The duration of 2208 days suggests a long-term commitment to this specific aircraft type. 4. The firm fixed-price contract type shifts cost risk to the contractor. 5. The absence of small business set-asides indicates a focus on large prime contractors. 6. The contract falls under the Aircraft Manufacturing NAICS code, indicating a specialized industrial sector.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source procurements for the T-6A aircraft. The firm fixed-price nature provides some cost certainty, but the lack of competition means the government did not benefit from competitive bidding to ensure the lowest possible price. Further analysis would require access to historical pricing data for similar aircraft or previous sole-source awards for this specific model.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition limits the government's ability to explore alternative solutions or leverage market forces to drive down costs. It suggests a reliance on a specific manufacturer for this particular aircraft.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a competitive bidding process, there is a reduced likelihood of achieving the most cost-effective outcome for this procurement.

Public Impact

The primary beneficiaries are the Department of Defense, which receives the T-6A aircraft for its training or operational needs. The services delivered include the manufacturing and delivery of T-6A aircraft. The geographic impact is primarily centered around Textron Aviation's manufacturing facilities in Kansas. Workforce implications include employment opportunities within Textron Aviation and its supply chain, particularly in aircraft manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the sole-source justification process.
Potential for contractor lock-in due to specialized nature of the aircraft.
Long contract duration could lead to scope creep or unforeseen cost increases if not managed tightly.
No indication of small business subcontracting goals, potentially limiting opportunities for smaller firms.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Textron Aviation is an established defense contractor with experience in aircraft manufacturing.
The T-6A is a known quantity, likely fulfilling a specific and established requirement.
Long contract duration may indicate a stable, predictable supply chain for the aircraft.

Sector Analysis

The aircraft manufacturing sector is a critical component of the defense industrial base, characterized by high barriers to entry, significant R&D investment, and long production cycles. This contract for T-6A aircraft fits within the broader defense aerospace market. Comparable spending benchmarks would involve looking at other sole-source or competitive procurements of training or light attack aircraft by the DoD or allied nations, though direct comparisons are difficult without specific aircraft performance and quantity data.

Small Business Impact

This contract does not appear to have included small business set-aside provisions, as indicated by 'sb': false. The prime contractor, Textron Aviation Defense LLC, is a large business. There is no explicit information provided regarding subcontracting plans or goals for small businesses. This suggests that opportunities for small businesses may be limited to those that can subcontract directly with Textron Aviation, rather than through a mandated set-aside program.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management and administration functions, likely through the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver the aircraft at the agreed-upon price. Transparency is limited by the sole-source nature of the award; however, contract award details are typically made public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

T-6A Texan II Joint Primary Aircraft Training System (JPATS)
Fixed-Wing Aircraft Manufacturing
Defense Procurement Contracts
Foreign Military Sales (FMS) Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $125.5 million to TEXTRON AVIATION DEFENSE LLC. IRAQ T-6A, FMS PROCUREMENT

Who is the contractor on this award?

The obligated recipient is TEXTRON AVIATION DEFENSE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $125.5 million.

What is the period of performance?

Start: 2009-08-14. End: 2015-08-31.

What is the historical spending trend for T-6A aircraft procurement by the Department of Defense?

Analyzing historical spending trends for T-6A aircraft procurement requires accessing detailed contract databases and financial reports over multiple fiscal years. Without specific data points for this analysis, it's difficult to provide precise figures. However, the T-6A has been a primary trainer for the U.S. Air Force and Navy for many years, suggesting consistent, albeit potentially fluctuating, procurement cycles. Factors influencing spending include fleet modernization needs, training command requirements, and budget allocations. The current award of $125.5 million for an unspecified quantity of aircraft indicates a significant, but not necessarily unprecedented, investment. A comprehensive trend analysis would involve examining the total dollar value of T-6A contracts awarded annually, the number of aircraft procured in each award, and any associated sustainment or upgrade costs over the past decade or more to identify patterns and understand the long-term financial commitment to this platform.

How does the per-unit cost of the T-6A aircraft in this contract compare to previous awards or industry benchmarks?

Determining the per-unit cost requires knowing the number of aircraft procured under this $125.5 million contract. Since the quantity is not specified, a direct per-unit cost calculation is impossible. However, the T-6A has historically been procured at varying price points depending on the specific configuration, quantity, and contract terms. Previous awards for the T-6A have seen per-unit costs ranging significantly. For instance, some reports suggest unit costs in the range of $8-15 million, but this can vary widely based on factors like lot size, included options, and specific government requirements. As this is a sole-source award, direct comparison to competitive bids is not feasible. To benchmark effectively, one would need to compare this potential per-unit cost against other sole-source awards for similar training aircraft or against the contractor's own historical pricing for the T-6A, adjusted for inflation and any changes in specifications.

What are the specific risks associated with a sole-source procurement of this magnitude?

Sole-source procurements, especially those of significant value like $125.5 million, carry inherent risks. The primary risk is the potential for inflated pricing, as the government lacks the leverage of competitive bidding to ensure the best possible price. This can lead to reduced value for taxpayer money. Another risk is the lack of innovation; without competition, there's less incentive for the contractor to offer cost-saving efficiencies or technological advancements beyond the basic contract requirements. Contractor performance risk is also present; while Textron Aviation is experienced, a sole-source relationship can sometimes lead to complacency. Furthermore, the government may become overly reliant on a single supplier, creating potential supply chain vulnerabilities or difficulties in transitioning to alternative platforms in the future. Robust oversight and negotiation are crucial to mitigate these risks.

What is Textron Aviation Defense LLC's track record with similar sole-source aircraft procurements?

Textron Aviation Defense LLC, and its predecessor entities, have a long history of supplying aircraft to the U.S. military, including the T-6A. While specific details on their sole-source procurement track record for this exact platform at this scale require deep dives into contract databases, it's known that sole-source awards are not uncommon for specialized military aircraft, particularly for established platforms where a single manufacturer holds the design and production rights. Textron's experience suggests a capability to fulfill such contracts. However, the 'value for money' aspect of sole-source awards is always a point of scrutiny. Analyzing past sole-source contracts awarded to Textron would involve examining pricing structures, performance history, and any documented cost savings or overruns to assess their negotiation effectiveness and pricing reasonableness in non-competitive environments.

How does the firm fixed-price contract type mitigate or exacerbate risks in this sole-source scenario?

The firm fixed-price (FFP) contract type is generally advantageous for the government as it places the primary risk of cost overruns on the contractor. This means Textron Aviation Defense LLC is obligated to deliver the T-6A aircraft for the agreed-upon $125.5 million, regardless of their actual production costs. This mitigates the financial risk for the government concerning cost escalation during production. However, in a sole-source context, the FFP price itself might be higher than it would be in a competitive environment. The risk is that the 'firm price' was negotiated without the benefit of competitive pressure, potentially leading to a less favorable baseline price. Therefore, while FFP protects against cost overruns, it doesn't guarantee the initial price was the best achievable. The government's negotiation strategy and cost realism analysis become paramount in sole-source FFP awards.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 201 S GREENWICH, WICHITA, KS, 67207

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: $125,503,921

Exercised Options: $125,503,921

Current Obligation: $125,503,921

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline