DoD's $103M R&D contract for electronics and communication equipment saw significant cost growth, exceeding initial estimates

Contract Overview

Contract Amount: $103,236,018 ($103.2M)

Contractor: Rockwell Collins, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-05-05

End Date: 2013-08-29

Contract Duration: 3,038 days

Daily Burn Rate: $34.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200508!002097!5700!FA8650!DET 1 AFRL/PK !FA865005C7214 !A!N! !Y! ! !20050505!20060503!060605883!962960589!962960589!N!ROCKWELL COLLINS, INC !400 COLLINS RD NE !CEDAR RAPIDS !IA!52498!12000!113!19!CEDAR RAPIDS !LINN !IOWA !+000000300000!N!N!000003500000!AC62!RDTE/ELECTRONICS&COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541710!E! !3! ! ! ! ! !20200930!B! ! !A! !A!N!U!2!008!E! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $103.2 million to ROCKWELL COLLINS, INC. for work described as: 200508!002097!5700!FA8650!DET 1 AFRL/PK !FA865005C7214 !A!N! !Y! ! !20050505!20060503!060605883!962960589!962960589!N!ROCKWELL COLLINS, INC !400 COLLINS RD NE !CEDAR RAPIDS !IA!52498!12000!113!19!CEDAR RAPIDS !LINN… Key points: 1. The contract experienced substantial cost increases over its lifecycle, indicating potential underestimation or scope creep. 2. Competition was robust, with full and open bidding, suggesting a competitive market for these specialized R&D services. 3. The contractor, Rockwell Collins, Inc., has a significant presence in the aerospace and defense electronics sector. 4. The contract's duration and cost growth warrant scrutiny of performance and financial management. 5. This spending falls within the broader category of applied research and development for defense electronics. 6. The contract's ultimate cost was significantly higher than the initial award amount, highlighting a risk indicator.

Value Assessment

Rating: questionable

The final cost of $103.2 million significantly exceeded the initial award value, suggesting potential cost overruns or scope expansion. While the contract type (Cost Plus Fixed Fee) allows for flexibility, the magnitude of the increase warrants further investigation into the drivers of this growth. Benchmarking against similar R&D contracts for electronics and communication equipment is difficult without more granular data on the specific research objectives and deliverables. However, the substantial deviation from the initial estimate raises concerns about value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to compete. The presence of 8 bids suggests a healthy level of interest and competition for this research and development effort. This competitive environment is generally favorable for price discovery and ensuring that the government receives competitive pricing for the services rendered.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging innovation among contractors.

Public Impact

The primary beneficiary is the Department of Defense, which receives advanced electronics and communication equipment research. The contract supports the development of cutting-edge technologies crucial for national security. The geographic impact is concentrated around the contractor's facilities in Iowa, with potential ripple effects in the local economy. The contract likely supported a specialized workforce of engineers, researchers, and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost growth from initial award to final expenditure.
Potential for underestimation of project complexity or scope creep.
Long contract duration (over 3 years) increases exposure to cost fluctuations.
Cost Plus Fixed Fee contract type can incentivize higher spending if not tightly managed.

Positive Signals

Awarded under full and open competition, indicating a competitive market.
Contractor is a well-established entity in the aerospace and defense sector.
Contract supported applied research and development, potentially leading to technological advancements.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on electronics and communication equipment. The North American Industry Classification System (NAICS) code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' encompasses a broad range of scientific and technical services. Spending in this area is critical for maintaining technological superiority, particularly in defense applications. Comparable spending benchmarks would typically be found within defense R&D budgets allocated to advanced electronics and communication systems.

Small Business Impact

There is no indication that this contract involved small business set-asides. The primary contractor, Rockwell Collins, Inc., is a large corporation. Subcontracting opportunities for small businesses may have existed, but they are not explicitly detailed in the provided data. The focus appears to be on large-scale R&D capabilities rather than fostering small business participation.

Oversight & Accountability

Oversight for this contract would have been managed by the Defense Contract Management Agency (DCMA). As a Cost Plus Fixed Fee contract, rigorous oversight of incurred costs and adherence to the fixed fee would be expected. Transparency is generally facilitated through contract reporting mechanisms, but specific details on oversight activities and Inspector General involvement are not provided in this data.

Related Government Programs

Department of Defense Research and Development Contracts
Electronics and Communication Equipment Procurement
Applied Research Contracts
Aerospace and Defense Technology Development

Risk Flags

Cost Growth
Long Contract Duration
Potential for Scope Creep
CPFF Contract Type Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.2 million to ROCKWELL COLLINS, INC.. 200508!002097!5700!FA8650!DET 1 AFRL/PK !FA865005C7214 !A!N! !Y! ! !20050505!20060503!060605883!962960589!962960589!N!ROCKWELL COLLINS, INC !400 COLLINS RD NE !CEDAR RAPIDS !IA!52498!12000!113!19!CEDAR RAPIDS !LINN !IOWA !+000000300000!N!N!000003500000!AC62!RDTE/ELECTRONICS&COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541710!E! !3! ! ! ! ! !20200

Who is the contractor on this award?

The obligated recipient is ROCKWELL COLLINS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $103.2 million.

What is the period of performance?

Start: 2005-05-05. End: 2013-08-29.

What specific technological advancements or capabilities were intended to be developed under this contract?

The contract data indicates the subject was 'RDTE/ELECTRONICS&COMMUNICATION EQ-APPLIED RESEA' and the NAICS code is 541710 (Research and Development in the Physical, Engineering, and Life Sciences). This suggests the contract aimed to advance the state-of-the-art in military electronics and communication systems through applied research. Specific deliverables would likely include prototypes, technical reports, feasibility studies, and potentially early-stage designs for next-generation communication hardware, sensors, or electronic warfare systems. The exact nature of these advancements is not detailed in the summary data but would typically align with the Air Force Research Laboratory's (AFRL) mission to develop and transition new technologies for air and space capabilities.

How did the final cost of $103.2 million compare to the initial estimated value or ceiling price?

The provided data shows an initial award value that is not explicitly stated as a ceiling but rather implied by the final cost. The contract was awarded on 2005-05-05 with an initial value that led to a final expenditure of $103,236,017.77 by its completion date of 2013-08-29. The duration of the contract (3038 days) and the significant final cost suggest that the initial estimates may have been conservative or that the scope evolved considerably. Without the specific initial ceiling or estimated cost at the time of award, a direct comparison is difficult, but the final amount represents the total obligated funds over the contract's life.

What were the primary risk factors associated with this Cost Plus Fixed Fee (CPFF) contract?

Cost Plus Fixed Fee contracts carry inherent risks, primarily related to cost control. For this contract, the main risk was that the contractor might not efficiently manage costs, knowing that the fee was fixed regardless of the final expenditure. This could lead to cost overruns if the research proved more complex or expensive than anticipated. Another risk is the potential for scope creep, where the objectives expand beyond the original intent, driving up costs without a corresponding increase in the fixed fee. Effective government oversight is crucial to mitigate these risks by closely monitoring expenditures and ensuring adherence to the defined research objectives.

What is Rockwell Collins, Inc.'s track record with similar government R&D contracts?

Rockwell Collins, Inc. (now part of Collins Aerospace, a Raytheon Technologies company) has a long history of performing complex research, development, and manufacturing for the U.S. military, particularly in avionics, communications, and electronic systems. Their track record generally includes successful delivery of advanced technologies for various platforms. However, like many large defense contractors, they have likely encountered contracts with cost fluctuations or performance challenges over their extensive history. Specific details on their performance for comparable R&D contracts would require a deeper dive into historical contract data and performance reviews.

How does the competition level (8 bidders) influence the value received by the government for R&D services?

A competition level with 8 bidders for a specialized R&D contract is generally considered robust. This indicates a healthy market with multiple capable firms vying for the work. A higher number of bidders typically leads to more competitive pricing, as companies strive to offer the best value proposition to win the contract. Furthermore, it allows the government to select from a wider pool of innovative solutions and technical approaches. For R&D, this means the government is more likely to secure cutting-edge research at a reasonable cost, fostering innovation and ensuring that taxpayer funds are directed towards the most promising technological developments.

What was the historical spending trend for this specific contract or similar contracts awarded to Rockwell Collins?

The provided data indicates a single contract awarded to Rockwell Collins, Inc. with a final cost of approximately $103.2 million over its duration from 2005 to 2013. This represents a significant expenditure for a single R&D effort. To assess historical spending trends, one would need to examine Rockwell Collins' broader contract portfolio within the Department of Defense, particularly for R&D in electronics and communication. This would involve analyzing the volume, value, and types of contracts awarded to the company over time to identify patterns in spending and contract performance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 8

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 52498

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $104,010,495

Exercised Options: $104,010,495

Current Obligation: $103,236,018

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline