DoD's $62.7M Aircraft Contract with Cessna: Firm Fixed Price, No Competition

Contract Overview

Contract Amount: $62,687,552 ($62.7M)

Contractor: Cessna Aircraft Company

Awarding Agency: Department of Defense

Start Date: 2014-06-30

End Date: 2016-05-12

Contract Duration: 682 days

Daily Burn Rate: $91.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF BT/LL CLS

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67215

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $62.7 million to CESSNA AIRCRAFT COMPANY for work described as: IGF::CT::IGF BT/LL CLS Key points: 1. Significant contract value of $62.7 million awarded to Cessna Aircraft Company. 2. Lack of competition raises questions about price discovery and potential value. 3. Firm Fixed Price contract type offers cost certainty but limits flexibility. 4. Contract falls within the Aircraft Manufacturing sector, a key area for defense.

Value Assessment

Rating: questionable

The contract's value of $62.7 million is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar aircraft manufacturing contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers as there was no market pressure to achieve the best possible price.

Taxpayer Impact: The lack of competition on a $62.7 million contract likely resulted in a higher cost to taxpayers than a competed procurement would have.

Public Impact

Taxpayers may have overpaid due to the absence of competitive bidding. The Department of Defense relies on this contract for critical aircraft manufacturing. The sole-source nature of the award could set a precedent for future non-competitive contracts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpayment
Sole-source award

Positive Signals

Firm Fixed Price contract type provides cost certainty

Sector Analysis

This contract is within the Aircraft Manufacturing sector, which is crucial for national defense. Spending benchmarks in this sector can vary widely based on aircraft type and complexity.

Small Business Impact

The contract was awarded to Cessna Aircraft Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency. Oversight effectiveness is difficult to gauge without further information on the justification for the sole-source award and any price negotiations.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award
Lack of documented competition
Potential for inflated pricing
Limited transparency on price justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.7 million to CESSNA AIRCRAFT COMPANY. IGF::CT::IGF BT/LL CLS

Who is the contractor on this award?

The obligated recipient is CESSNA AIRCRAFT COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $62.7 million.

What is the period of performance?

Start: 2014-06-30. End: 2016-05-12.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without specific documentation, it's impossible to determine the precise reason. However, such justifications are critical for ensuring that non-competitive awards are made only when truly necessary and in the best interest of the government.

How was the 'fair and reasonable' price determined for this sole-source contract?

For sole-source contracts, price reasonableness is often determined through techniques like price analysis, cost analysis, or comparison to historical prices for similar items. The contracting officer must document the basis for their determination. Without access to the contract file, it's unknown if adequate price analysis was performed to ensure taxpayers received fair value.

What is the potential impact of this sole-source award on future competition for similar aircraft needs?

Sole-source awards can discourage future competition if potential bidders perceive that the government is willing to bypass competitive processes. It may also signal that a particular contractor possesses unique capabilities that are difficult to replicate, thereby limiting future market entry and potentially increasing long-term costs for the government.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

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: ONE CESSNA BLVD, WICHITA, KS, 67215

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: $86,044,754

Exercised Options: $85,542,476

Current Obligation: $62,687,552

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline