DoD's $353M Aircraft Reconstitution Contract with Textron Aviation Defense Faces Oversight Concerns

Contract Overview

Contract Amount: $35,338,422 ($35.3M)

Contractor: Textron Aviation Defense LLC

Awarding Agency: Department of Defense

Start Date: 2017-07-24

End Date: 2021-03-31

Contract Duration: 1,346 days

Daily Burn Rate: $26.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACAT III: AIRCRAFT RECONSTITUTION

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67207

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $35.3 million to TEXTRON AVIATION DEFENSE LLC for work described as: ACAT III: AIRCRAFT RECONSTITUTION Key points: 1. Significant spending on aircraft reconstitution highlights a critical need for fleet readiness. 2. The sole-source nature of this contract raises questions about potential price inflation and limited market leverage. 3. Lack of competition limits opportunities for innovative solutions and potentially higher costs for taxpayers. 4. The contract's duration and firm fixed-price structure suggest a predictable cost baseline, but oversight is crucial.

Value Assessment

Rating: questionable

The contract value of $353 million for aircraft reconstitution is substantial. Without comparable contracts or detailed cost breakdowns, assessing its value against similar services is difficult. The firm fixed-price nature provides cost certainty but doesn't inherently guarantee optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This procurement method can lead to higher prices as the government lacks leverage to negotiate better terms. It also limits the government's ability to explore alternative solutions or benefit from market competition.

Taxpayer Impact: The absence of competition in this sole-source award may result in taxpayers paying a premium for aircraft reconstitution services, as Textron Aviation Defense was the only provider considered.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The Air Force's reliance on a single vendor for critical aircraft maintenance could pose a long-term risk. Ensuring the quality and necessity of the services provided under this sole-source contract requires diligent oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpayment
Limited oversight visibility

Positive Signals

Firm fixed-price contract
Clear contract duration

Sector Analysis

The defense sector, particularly aircraft manufacturing and maintenance, often involves complex, high-value contracts. Spending benchmarks for aircraft reconstitution can vary widely based on the type of aircraft, extent of damage, and required upgrades. This contract falls within the typical range for specialized defense sustainment.

Small Business Impact

This contract was awarded to Textron Aviation Defense LLC, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, limiting opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this contract necessitates robust oversight to ensure fair pricing and prevent potential waste. The Department of the Air Force must actively monitor performance, costs, and the necessity of all services rendered to maintain accountability.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competitive pricing.
Potential for contractor to inflate prices without competition.
Lack of transparency in cost justification.
Risk of vendor lock-in for critical services.
Need for enhanced oversight due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.3 million to TEXTRON AVIATION DEFENSE LLC. ACAT III: AIRCRAFT RECONSTITUTION

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $35.3 million.

What is the period of performance?

Start: 2017-07-24. End: 2021-03-31.

What specific factors justified the sole-source award for this aircraft reconstitution contract, and were alternatives thoroughly explored?

The justification for a sole-source award typically stems from unique capabilities, urgent needs, or the unavailability of other sources. For this ACAT III contract, the Department of Defense likely cited specific technical requirements or proprietary knowledge held by Textron Aviation Defense. A thorough review would involve documenting why no other vendor could meet these specific needs and exploring if any form of competition, even limited, was feasible before resorting to a sole-source determination.

How does the firm fixed-price structure mitigate risks associated with potential cost overruns in this sole-source contract?

A firm fixed-price (FFP) contract shifts the risk of cost overruns to the contractor. Textron Aviation Defense is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This structure provides budget certainty for the Air Force. However, the risk of inflated pricing due to the sole-source nature remains, meaning the FFP might be set at a higher baseline than in a competitive environment.

What mechanisms are in place to ensure the effectiveness and necessity of the aircraft reconstitution services provided under this contract?

Effectiveness and necessity are typically ensured through rigorous contract oversight, performance metrics, and milestone reviews. The Air Force contracting officer and technical representatives must closely monitor the work performed, verify that it aligns with stated requirements, and ensure that the reconstitution efforts are essential for operational readiness. Regular reporting and inspections are crucial to validate the value and impact of the services.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT LAUNCHING, LANDING, GROUND HANDLING AND SERVICING EQUIPMENT

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, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,338,422

Exercised Options: $35,338,422

Current Obligation: $35,338,422

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $4,971,897

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline