DoD's $18.9M contract for navigation systems awarded to Rockwell Collins, Inc. with no competition

Contract Overview

Contract Amount: $18,902,499 ($18.9M)

Contractor: Rockwell Collins, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-01-31

End Date: 2019-08-30

Contract Duration: 2,768 days

Daily Burn Rate: $6.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: CAAS/CMS LCCS

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $18.9 million to ROCKWELL COLLINS, INC. for work described as: CAAS/CMS LCCS Key points: 1. The contract's value of $18.9 million over approximately 7.6 years suggests a significant investment in critical defense systems. 2. The sole-source award indicates a lack of competitive bidding, potentially leading to higher costs for taxpayers. 3. The fixed-price incentive contract type aims to control costs while incentivizing contractor performance. 4. The contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code, highlighting its specialized nature. 5. The duration of the contract (2768 days) points to a long-term need for these navigation systems. 6. The absence of small business set-asides or subcontracting requirements means direct benefits to small businesses are unlikely.

Value Assessment

Rating: questionable

Benchmarking the value of this $18.9 million contract is challenging without specific performance metrics or comparable contract data. However, the lack of competition raises concerns about whether the government secured the best possible price. The fixed-price incentive structure suggests an attempt to manage costs, but the absence of competitive pressure means a thorough price reasonableness assessment is crucial. Without more information on the specific systems and their market value, it's difficult to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or when urgent circumstances preclude a competitive process. The lack of bidders means the government did not benefit from a range of proposals and pricing, which can hinder price discovery and potentially lead to less favorable terms.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available in the market. The absence of competition limits the government's leverage to negotiate lower costs.

Public Impact

The primary beneficiaries are the Department of Defense, which receives essential navigation systems for its operations. The contract delivers critical hardware and potentially software for search, detection, navigation, guidance, and related systems. The geographic impact is likely concentrated within military installations and operational theaters where these systems are deployed. Workforce implications may include specialized engineering, manufacturing, and technical support roles at Rockwell Collins and its potential suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated pricing.
Sole-source awards can limit technological innovation by not exploring alternative solutions.
Long contract duration could lead to cost overruns if not managed effectively.
Potential for vendor lock-in due to specialized nature of the systems.

Positive Signals

Fixed-price incentive contract type aims to align contractor and government interests for cost control.
Rockwell Collins is a known entity in aerospace and defense, suggesting a degree of reliability.
The contract addresses a critical need for navigation systems, essential for military operations.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of navigation and guidance systems. The market for such specialized equipment is often characterized by high barriers to entry due to technological complexity and stringent regulatory requirements. Spending in this area is critical for national security, and contracts are typically awarded to established prime contractors with proven capabilities. Comparable spending benchmarks would involve analyzing other DoD contracts for similar avionics and navigation equipment.

Small Business Impact

This contract does not appear to have any specific small business set-aside provisions, nor is there information indicating subcontracting goals for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal, unless Rockwell Collins voluntarily engages small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the fixed-price incentive contract terms, linking payment to performance and cost targets. Transparency may be limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal DoD review and potentially Inspector General oversight if issues arise.

Related Government Programs

DoD Avionics Procurement
Navigation System Development
Aeronautical Instrument Manufacturing
Defense Supply Chain Management
Fixed-Price Incentive Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns in long-duration contract.
Limited transparency due to non-competitive nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to ROCKWELL COLLINS, INC.. CAAS/CMS LCCS

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 $18.9 million.

What is the period of performance?

Start: 2012-01-31. End: 2019-08-30.

What is Rockwell Collins' track record with the Department of Defense for similar navigation systems?

Rockwell Collins, now part of Collins Aerospace, has a long-standing history of providing avionics, communication, and navigation systems to the Department of Defense. They are a well-established prime contractor known for delivering complex systems for various military platforms, including aircraft and ground vehicles. Their track record generally includes successful delivery of numerous contracts, though like any large defense contractor, they have also faced scrutiny over specific contract performance and pricing. For this particular contract, the sole-source nature suggests a specific reliance on their proprietary technology or existing integration capabilities within DoD platforms, implying a pre-existing relationship and demonstrated ability to meet specific requirements.

How does the $18.9 million cost compare to similar navigation system contracts?

Directly comparing the $18.9 million cost is difficult without knowing the exact specifications, quantity, and technological sophistication of the navigation systems procured under this contract. However, the duration of nearly 7.6 years suggests a substantial, long-term requirement. For context, other DoD contracts for advanced avionics suites or integrated navigation systems can range from tens to hundreds of millions of dollars, depending on the platform (e.g., fighter jets vs. transport aircraft) and the scope of integration. The fixed-price incentive (FPI) structure implies that costs were estimated, and the final price could vary based on performance, with incentives for exceeding targets and penalties for falling short. Without competitive bids, it's harder to ascertain if this $18.9 million represents a market-driven price.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not be achieving the most cost-effective solution. Another risk is vendor lock-in, where the reliance on Rockwell Collins' specific technology or integration could make future transitions to different systems or contractors more difficult and costly. Performance risk also exists, although the FPI contract type aims to mitigate this by incentivizing the contractor. Finally, there's a risk that alternative, potentially more innovative or cost-efficient solutions from other vendors were not explored.

How effective is the fixed-price incentive (FPI) contract type in managing costs for this specific procurement?

The Fixed-Price Incentive (FPI) contract type is designed to provide a middle ground between fixed-price and cost-reimbursement contracts, aiming to control costs while allowing for some flexibility. In this case, it likely involved establishing an initial target cost, a target profit, and a price ceiling. The contractor is incentivized to keep costs below the target, sharing in the savings with the government (e.g., an 80/20 split). Conversely, if costs exceed the target, the contractor absorbs a portion of the overrun up to the ceiling. The effectiveness hinges on realistic target setting and robust government oversight to ensure the contractor is genuinely motivated to achieve efficiencies rather than simply passing costs through, especially given the sole-source nature.

What are the historical spending patterns for navigation systems within the Department of Defense?

The Department of Defense consistently allocates significant funding towards navigation and guidance systems, reflecting their critical role in military operations across all branches. Historical spending patterns show a continuous demand for upgrades and new procurements driven by technological advancements, platform modernization, and evolving mission requirements. This spending often involves large, multi-year contracts awarded to major defense contractors like Rockwell Collins. While specific figures fluctuate annually based on budget allocations and program priorities, the overall trend indicates a substantial and sustained investment in maintaining and enhancing the nation's navigational capabilities for both manned and unmanned systems.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: H9224112R0005

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

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

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

Financial Breakdown

Contract Ceiling: $23,729,855

Exercised Options: $18,902,499

Current Obligation: $18,902,499

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline