Department of Defense awards $100M+ contract for aircraft manufacturing, with significant duration

Contract Overview

Contract Amount: $100,354,619 ($100.4M)

Contractor: Textron Aviation Defense LLC

Awarding Agency: Department of Defense

Start Date: 2017-03-31

End Date: 2024-06-25

Contract Duration: 2,643 days

Daily Burn Rate: $38.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF FMS REQUIREMENT- IRAQ PEACE DRAGON 6-MONTH UCA

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67206

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $100.4 million to TEXTRON AVIATION DEFENSE LLC for work described as: IGF::OT::IGF FMS REQUIREMENT- IRAQ PEACE DRAGON 6-MONTH UCA Key points: 1. Contract value exceeds $100 million, indicating a substantial investment. 2. Long contract duration of over 2,600 days suggests a long-term requirement. 3. Aircraft manufacturing is a critical sector for defense operations. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 5. Sole-source award raises questions about potential lack of competition and price optimization. 6. The awardee, Textron Aviation Defense LLC, is a significant player in the aerospace industry.

Value Assessment

Rating: fair

The contract value of over $100 million for aircraft manufacturing is substantial. Without specific benchmarks for similar aircraft types or configurations, a precise value-for-money assessment is difficult. However, the Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, can sometimes lead to higher costs compared to fixed-price contracts if cost controls are not robust. The long duration suggests a sustained need, which could imply a stable, albeit potentially expensive, supply chain.

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 is available or when a compelling justification exists for avoiding full and open competition. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. This approach can be justified for specialized needs or existing platforms, but it limits the government's ability to explore alternative solutions or secure the best possible pricing.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive price for the goods or services procured, as there was no bidding process to drive down costs.

Public Impact

The primary beneficiaries are the Department of Defense, which receives critical aircraft manufacturing services. The contract supports the production or modification of aircraft essential for defense operations. The geographic impact is centered around the contractor's facilities in Kansas. This contract likely supports a specialized workforce within the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize cost overruns if not closely monitored.
Sole-source award limits price discovery and potential cost savings through competition.
Long contract duration may indicate a lack of readily available alternative solutions or a need for specialized expertise.

Positive Signals

Awardee is a known entity in aviation defense, suggesting established capabilities.
Long duration implies a stable and predictable supply of critical assets for the DoD.
The contract supports a specific, likely critical, defense requirement.

Sector Analysis

The aircraft manufacturing sector is a cornerstone of the defense industry, involving complex engineering, production, and maintenance of aerial platforms. This contract falls within a segment of the defense industrial base that requires significant capital investment and specialized expertise. Spending in this area is often driven by modernization efforts, operational readiness, and the need for advanced technological capabilities. Comparable spending benchmarks would typically be found within other large-scale aircraft procurement or sustainment contracts within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting no specific small business subcontracting goals were explicitly mandated within the provided data. This means that opportunities for small businesses to participate in this contract, either as prime contractors or subcontractors, may be limited unless they are part of Textron Aviation Defense LLC's broader supply chain strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Given the Cost Plus Fixed Fee structure, rigorous financial oversight and auditing would be expected to ensure costs are reasonable and allocable. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract. Transparency is facilitated through contract databases, but detailed performance metrics and cost breakdowns may not be publicly available.

Related Government Programs

Aircraft Procurement, Air Force
Aircraft Combat Systems
Aviation Support Equipment
Defense Logistics Agency

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $100.4 million to TEXTRON AVIATION DEFENSE LLC. IGF::OT::IGF FMS REQUIREMENT- IRAQ PEACE DRAGON 6-MONTH UCA

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 $100.4 million.

What is the period of performance?

Start: 2017-03-31. End: 2024-06-25.

What is the historical spending pattern for Textron Aviation Defense LLC with the Department of Defense?

Analyzing the historical spending with Textron Aviation Defense LLC by the Department of Defense requires access to comprehensive contract databases. However, given their role as a significant defense contractor in aviation, it is reasonable to assume a pattern of substantial awards for aircraft manufacturing, modification, and support services. The current contract's value of over $100 million and its long duration suggest a continued relationship for critical aviation needs. Further investigation into past contracts, including their types, values, and durations, would provide a clearer picture of the historical spending trends and the contractor's performance over time. This would help in understanding if this award represents a continuation of existing work or a new, significant undertaking.

How does the Cost Plus Fixed Fee (CPFF) structure impact the value for money in this contract?

The Cost Plus Fixed Fee (CPFF) contract structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. While this structure is beneficial for complex projects where costs are difficult to estimate upfront, it can present challenges for value-for-money assessments. The government bears the risk of cost overruns, and the contractor has less incentive to control costs compared to fixed-price contracts. For this $100M+ contract, effective oversight and robust cost accounting standards are crucial to ensure that the fixed fee remains appropriate and that the total costs incurred are reasonable and necessary for the services delivered. Without detailed cost breakdowns and performance metrics, it's challenging to definitively benchmark the value for money achieved under this CPFF arrangement.

What are the specific aircraft or services being procured under this contract?

The provided data indicates the contract is for 'Aircraft Manufacturing' under the National Industrial Classification (NAICS) code 336411. However, it does not specify the exact type of aircraft, the quantity, or the specific manufacturing services required. The contract title 'IGF::OT::IGF FMS REQUIREMENT- IRAQ PEACE DRAGON 6-MONTH UCA' suggests a Foreign Military Sales (FMS) requirement, potentially related to Unmanned Combat Aircraft (UCA) or a similar platform, with a 6-month UCA (Unaccompanied Cargo Aircraft) component. The 'PEACE DRAGON' designation might refer to a specific program or operation. Clarification on the exact nature of the aircraft and services is essential for a complete understanding of the contract's purpose and impact.

What is the risk associated with a sole-source award for a contract of this magnitude?

A sole-source award for a contract exceeding $100 million carries inherent risks, primarily related to price and innovation. Without competition, the government loses the opportunity to leverage market forces to achieve the best possible price. This can lead to higher costs for taxpayers. Additionally, a sole-source approach may limit the exploration of alternative technologies or solutions that could be more efficient or cost-effective. The justification for a sole-source award must be exceptionally strong, typically involving unique capabilities, proprietary technology, or urgent national security needs where only one contractor can fulfill the requirement. Robust justification and negotiation are critical to mitigate these risks.

What are the implications of the long contract duration (2643 days) for program stability and contractor performance?

A contract duration of 2643 days (approximately 7.2 years) indicates a long-term, strategic requirement for the Department of Defense. This extended period can offer significant benefits in terms of program stability, allowing for consistent production, development, and sustainment of critical assets. For the contractor, it provides a predictable revenue stream and the opportunity to invest in specialized facilities and workforce. However, such long durations also increase the risk of technological obsolescence, changes in requirements, and potential contractor performance degradation over time. Continuous monitoring, performance reviews, and contract modifications may be necessary to ensure the contract remains aligned with evolving needs and maintains optimal value throughout its lifecycle.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $194,447,875

Exercised Options: $123,870,233

Current Obligation: $100,354,619

Subaward Activity

Number of Subawards: 59

Total Subaward Amount: $4,548,765,712

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline