DoD awards $24.7M FLEXSEAL contract to Aerojet Rocketdyne for missile propulsion units

Contract Overview

Contract Amount: $24,707,295 ($24.7M)

Contractor: Aerojet Rocketdyne Inc

Awarding Agency: Department of Defense

Start Date: 2013-02-06

End Date: 2021-06-01

Contract Duration: 3,037 days

Daily Burn Rate: $8.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FLEXSEAL FOLLOW-ON CONTRACT

Place of Performance

Location: RANCHO CORDOVA, SACRAMENTO County, CALIFORNIA, 95742

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $24.7 million to AEROJET ROCKETDYNE INC for work described as: FLEXSEAL FOLLOW-ON CONTRACT Key points: 1. Contract value represents a significant investment in critical missile propulsion technology. 2. Sole-source award raises questions about potential price overruns and lack of competitive pressure. 3. Long contract duration (3037 days) suggests a sustained need for these specialized components. 4. The award falls within the Guided Missile and Space Vehicle Propulsion Unit manufacturing sector. 5. Fixed-price contract type aims to control costs, but the absence of competition limits upside. 6. Contractor's established role in this niche suggests deep technical expertise.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specialized nature and sole-source award. Without competitive bids, it's difficult to ascertain if the $24.7 million represents a fair market price. The fixed-price nature provides some cost certainty, but the lack of competition means taxpayers may not be benefiting from the most economical pricing achievable through a competitive process. Further analysis would require access to historical pricing data for similar propulsion units or cost breakdowns from the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Aerojet Rocketdyne Inc., was considered. This approach is typically used when a unique capability or proprietary technology is required, and competition is not feasible or would not yield a benefit. The lack of competition means that price discovery through market forces was absent, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible prices, potentially resulting in higher expenditures for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense and its missile programs, ensuring the availability of critical propulsion systems. The contract supports the manufacturing and delivery of guided missile and space vehicle propulsion units and their parts. The geographic impact is concentrated in California, where Aerojet Rocketdyne Inc. is based. This contract sustains specialized manufacturing jobs within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in sole-source justification could mask inefficiencies.
Long contract duration may not account for technological advancements or market shifts.
Dependence on a single supplier for critical components poses a supply chain risk.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Aerojet Rocketdyne's established expertise likely ensures high-quality, reliable components.
Contract supports national security by ensuring availability of essential missile technology.

Sector Analysis

The Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing sector is a highly specialized segment of the aerospace and defense industry. This contract falls within a niche market characterized by high technical barriers to entry and significant R&D investment. Comparable spending in this sector is often project-specific and driven by defense procurement cycles. The market is dominated by a few key players with the necessary expertise and certifications, making sole-source awards more common for unique or critical components.

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 mandated within this award. The primary contractor, Aerojet Rocketdyne Inc., is a large aerospace company, and the nature of this specialized manufacturing may limit opportunities for broad small business subcontracting unless specific components are outsourced to smaller, specialized firms.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. As a definitive contract, it is subject to standard government oversight procedures, including performance monitoring and payment verification. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is limited due to the sole-source nature, but contract award details are publicly available through federal procurement databases.

Related Government Programs

Missile Defense Systems
Space Launch Vehicles
Aerospace Manufacturing
Defense Procurement
Propulsion Systems

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.7 million to AEROJET ROCKETDYNE INC. FLEXSEAL FOLLOW-ON CONTRACT

Who is the contractor on this award?

The obligated recipient is AEROJET ROCKETDYNE 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 $24.7 million.

What is the period of performance?

Start: 2013-02-06. End: 2021-06-01.

What is Aerojet Rocketdyne Inc.'s track record with the Department of Defense for similar propulsion systems?

Aerojet Rocketdyne Inc. has a long-standing and extensive track record with the Department of Defense, particularly in the development and production of rocket engines and missile propulsion systems. They have been a key supplier for numerous strategic and tactical missile programs across all branches of the U.S. military. Their experience spans decades, encompassing both solid and liquid rocket propulsion technologies. This history suggests a deep understanding of military requirements, stringent quality control processes, and a proven ability to deliver complex propulsion units. The FLEXSEAL follow-on contract likely builds upon this established relationship and demonstrated capability, indicating a high degree of confidence from the DoD in their performance.

How does the $24.7 million contract value compare to similar propulsion unit contracts awarded by the DoD?

Direct comparison of the $24.7 million FLEXSEAL contract value to similar propulsion unit contracts is challenging due to the specialized nature of the components and the sole-source award. However, large-scale propulsion systems for major missile programs can range from tens to hundreds of millions of dollars. Smaller, specialized units or components, like those likely covered by FLEXSEAL, could fall within this reported value. Without knowing the exact specifications, quantity, and technological complexity of the FLEXSEAL units, a precise benchmark is difficult. The absence of competition means this figure cannot be directly validated against market rates, making it essential to rely on internal DoD cost analyses or historical data for similar sole-source procurements.

What are the primary risks associated with a sole-source award for critical missile propulsion units?

The primary risks associated with a sole-source award for critical missile propulsion units include potential cost overruns due to a lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a heightened risk of supply chain disruption if the sole provider faces operational issues. Taxpayers may end up paying a premium for these components. Furthermore, the government's negotiating leverage is diminished. For critical national security assets like missile propulsion, ensuring a stable and cost-effective supply is paramount, and sole-source awards inherently introduce greater uncertainty in achieving these goals compared to a competitive procurement process.

How effective is the fixed-price contract type in managing costs for this type of specialized defense procurement?

The fixed-price contract type (FIRM FIXED PRICE) is generally considered effective in managing costs for specialized defense procurements because it shifts the risk of cost overruns from the government to the contractor. Once the price is agreed upon, the contractor is obligated to complete the work for that amount, regardless of their actual costs. This provides budget certainty for the government. However, the effectiveness is significantly influenced by the accuracy of the initial price negotiation. In a sole-source scenario, where competition is absent, the initial price might be higher than it would be in a competitive environment. Therefore, while the contract type itself aims for cost control, the overall value realized depends heavily on the pre-award negotiation and the contractor's cost management.

What is the historical spending pattern for FLEXSEAL or similar propulsion units by the Department of Defense?

Historical spending data for the specific 'FLEXSEAL' program or its direct predecessors is not readily available in the provided data snippet. However, the 'follow-on' nature of the contract suggests a continuation of previous efforts. The Department of Defense consistently invests billions annually in missile programs, which inherently include significant spending on propulsion systems. The duration of this contract (3037 days, approximately 8.3 years) and its value ($24.7 million) indicate a sustained, albeit not massive, annual expenditure for these specific units. Broader spending on guided missile propulsion units and parts manufacturing falls under the broader defense industrial base, which sees continuous, substantial investment driven by modernization and readiness requirements.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aerojet Rocketdyne Holdings, Inc. (UEI: 001316330)

Address: HWY 50 & AEROJET RD, RANCHO CORDOVA, CA, 95742

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,707,295

Exercised Options: $24,707,295

Current Obligation: $24,707,295

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $5,931,906

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline