DoD's $198M Rockwell Collins Contract for Aeronautical Systems: A Cost-Plus Fixed Fee Award
Contract Overview
Contract Amount: $19,811,222 ($19.8M)
Contractor: Rockwell Collins, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-06-08
End Date: 2007-12-31
Contract Duration: 936 days
Daily Burn Rate: $21.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Place of Performance
Location: CEDAR RAPIDS, LINN County, IOWA, 52498
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $19.8 million to ROCKWELL COLLINS, INC. for work described as: Key points: 1. The Department of Defense awarded a significant $198 million contract to Rockwell Collins, Inc. for aeronautical systems. 2. This contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. The award was not competed, raising questions about potential price discovery and value for taxpayer money.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee structure, without a competitive bidding process, makes it difficult to assess if the $198 million price represents fair market value. Benchmarking against similar contracts for navigation and guidance systems would be necessary for a more definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source or limited competition scenario. This lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.
Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for these aeronautical systems, as there was no pressure on the contractor to offer the most cost-effective solution.
Public Impact
Impacts Air Force operations by providing essential navigation and guidance systems. Potential for increased costs to taxpayers due to non-competitive award. Highlights reliance on specific contractors for specialized defense systems. Raises questions about the effectiveness of procurement strategies for critical defense technology.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
Positive Signals
- Award to established contractor
- Supports critical defense capabilities
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on advanced navigation and guidance systems. Spending in this sector is often characterized by high R&D costs and long procurement cycles, with a significant portion allocated to sole-source or limited-competition contracts due to specialized requirements.
Small Business Impact
The contract was awarded to Rockwell Collins, Inc., a large corporation, and there is no indication of small business participation. This suggests a missed opportunity to support small businesses within the defense supply chain.
Oversight & Accountability
The non-competitive nature of this award warrants close oversight to ensure cost controls are effective and that the final price reflects reasonable costs and a fair profit. Accountability for cost management under the Cost Plus Fixed Fee structure is crucial.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited transparency on pricing justification
Tags
search-detection-navigation-guidance-aer, department-of-defense, ia, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.8 million to ROCKWELL COLLINS, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is ROCKWELL COLLINS, INC..
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 $19.8 million.
What is the period of performance?
Start: 2005-06-08. End: 2007-12-31.
What was the justification for not competing this significant contract, and what steps were taken to ensure fair pricing?
The justification for not competing this contract is not provided in the data. However, for sole-source or limited-competition awards, agencies typically rely on justifications such as unique capabilities, urgent needs, or lack of market availability. To ensure fair pricing, agencies should conduct thorough market research, negotiate aggressively, and potentially seek independent cost estimates.
What are the inherent risks associated with a Cost Plus Fixed Fee contract in a non-competitive environment for advanced defense systems?
The primary risk is cost escalation, as the contractor is reimbursed for all allowable costs plus a fixed fee. Without competition, there's less incentive for the contractor to control costs efficiently. This can lead to the government paying more than necessary, especially if oversight and auditing are insufficient to scrutinize the 'costs' incurred.
How effectively does this type of award support the Department of Defense's long-term strategic goals for technological advancement and cost efficiency?
While awarding contracts to established firms like Rockwell Collins can ensure the delivery of critical capabilities, the non-competitive, cost-plus nature may not align with long-term cost efficiency goals. It could stifle innovation from smaller, more agile companies and potentially lead to higher overall spending on defense systems compared to a competitive, fixed-price environment.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 02
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2005-06-08
Current End Date: 2007-12-31
Potential End Date: 2007-12-31 00:00:00
Last Modified: 2014-10-27
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