DoD Awards $109M Letter Contract to Textron Aviation Defense for Aircraft Manufacturing

Contract Overview

Contract Amount: $109,208,040 ($109.2M)

Contractor: Textron Aviation Defense LLC

Awarding Agency: Department of Defense

Start Date: 2021-06-30

End Date: 2028-12-31

Contract Duration: 2,741 days

Daily Burn Rate: $39.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LETTER CONTRACT

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67206

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $109.2 million to TEXTRON AVIATION DEFENSE LLC for work described as: LETTER CONTRACT Key points: 1. Significant contract value of over $109 million. 2. Sole-source award indicates limited competition. 3. Potential risks associated with sole-source procurement. 4. Aircraft manufacturing sector with long-term implications.

Value Assessment

Rating: questionable

The contract type is a letter contract, which is often used when the full scope of work is not yet defined. Pricing assessment is difficult without more details on the definitization process and comparison to similar aircraft manufacturing contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning competition was not sought. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for this substantial contract raises concerns about potential overspending and the efficient use of taxpayer funds.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long duration of the contract (ending 2028) means potential cost overruns could impact budgets for years. Dependence on a single contractor for critical aircraft manufacturing could pose supply chain risks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Letter contract type
Long contract duration

Positive Signals

Definitive contract awarded
Firm Fixed Price contract type

Sector Analysis

This contract falls within the aircraft manufacturing sector, a critical component of the defense industry. Spending benchmarks in this sector can vary widely based on aircraft type and technological complexity.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract. Analysis of small business participation is not possible with the provided information.

Oversight & Accountability

The use of a letter contract and sole-source award warrants close oversight to ensure fair pricing and adherence to contract terms. Accountability for cost and performance will be crucial throughout the contract's life.

Related Government Programs

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

Risk Flags

Lack of competition
Potential for cost overruns
Uncertainty in initial contract scope
Long-term financial commitment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $109.2 million to TEXTRON AVIATION DEFENSE LLC. LETTER CONTRACT

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 $109.2 million.

What is the period of performance?

Start: 2021-06-30. End: 2028-12-31.

What is the justification for the sole-source award, and what steps are being taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities or urgent needs. The Department of Defense should provide detailed documentation supporting this decision. To ensure fair pricing, a robust negotiation process and independent cost analysis are essential, especially given the letter contract's initial undefined scope.

What are the specific risks associated with a sole-source letter contract in aircraft manufacturing, and how are they being mitigated?

Risks include potential cost overruns due to lack of competition, contractor complacency, and difficulties in defining the final scope and price. Mitigation strategies involve rigorous negotiation, phased definitization with clear milestones, and continuous performance monitoring to ensure the contractor meets all requirements efficiently.

How does the firm-fixed-price nature of this contract, despite being a letter contract, impact its effectiveness and taxpayer value?

A firm-fixed-price (FFP) contract aims to provide cost certainty. However, as a letter contract, the initial price may be provisional. The effectiveness and taxpayer value depend heavily on the successful and timely definitization of the contract to a final FFP, ensuring the contractor bears the risk of cost overruns.

Industry Classification

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

Product/Service Code: BOOKS, MAPS, OTHER PUBLICATIONS

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

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: $109,208,040

Exercised Options: $109,208,040

Current Obligation: $109,208,040

Subaward Activity

Number of Subawards: 78

Total Subaward Amount: $25,282,546

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline