DoD awards $35.4M to Rockwell Collins for navigation systems, with limited competition
Contract Overview
Contract Amount: $35,427,543 ($35.4M)
Contractor: Rockwell Collins, Inc.
Awarding Agency: Department of Defense
Start Date: 2020-07-28
End Date: 2024-03-31
Contract Duration: 1,342 days
Daily Burn Rate: $26.4K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: V8.5F2
Place of Performance
Location: CEDAR RAPIDS, LINN County, IOWA, 52498
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $35.4 million to ROCKWELL COLLINS, INC. for work described as: V8.5F2 Key points: 1. Contract awarded on a sole-source basis, raising concerns about price discovery and potential overpayment. 2. The contract's cost-plus-fixed-fee structure may incentivize cost overruns. 3. Limited competition suggests a lack of market pressure to achieve optimal value for taxpayer funds. 4. The duration of the contract (over 3 years) indicates a long-term need for these specialized systems. 5. The specific product service code (PSC) for navigation systems suggests a critical component for defense operations. 6. The awardee, Rockwell Collins, is a significant player in the aerospace and defense industry.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable contract data. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex R&D or services where costs are uncertain, can lead to higher overall costs compared to fixed-price contracts. Without competitive bids, it's difficult to ascertain if the fixed fee adequately compensates the contractor for the effort or if it represents a premium. Further analysis would require access to detailed cost breakdowns and historical pricing for similar systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one responsible source can provide the required supplies or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs for taxpayers.
Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible prices, as there is no competitive pressure on the contractor to offer the lowest bid. This can result in taxpayers paying more than they would in a competitive scenario.
Public Impact
The primary beneficiaries are the Department of Defense, which receives critical navigation systems for its operations. The services delivered include the manufacturing and supply of specialized navigation, guidance, and control equipment. The geographic impact is likely concentrated within defense installations and operational theaters where these systems are deployed. Workforce implications include employment at Rockwell Collins and its supply chain partners involved in the production and support of these systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
- Cost-plus-fixed-fee contract structure may incentivize higher spending without strict cost controls.
- Lack of transparency in sole-source justifications can obscure true value for money.
- Long contract duration could lock in potentially suboptimal pricing if market conditions change.
Positive Signals
- Awardee is a well-established defense contractor with a track record in navigation systems.
- Contract addresses a critical need for specialized defense equipment.
- Fixed fee component provides some level of cost certainty for the contractor's profit.
- Delivery order structure allows for phased procurement and potential flexibility.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Navigation systems are a critical sub-sector, essential for aircraft, vessels, and ground vehicles. Spending in this area is driven by defense modernization efforts and operational requirements. Comparable spending benchmarks are difficult to establish without more specific details on the system's capabilities and scale, but the overall market for aerospace and defense electronics is substantial, measured in billions of dollars annually.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, Rockwell Collins, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without such provisions, the direct impact on the small business ecosystem from this specific award is likely minimal, though Rockwell Collins may engage small businesses in its supply chain.
Oversight & Accountability
Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contract compliance and performance. The specific oversight mechanisms would depend on the terms of the cost-plus-fixed-fee agreement, including reviews of cost proposals, progress reports, and quality assurance. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Navigation Systems Procurement
- Aerospace Electronics Manufacturing
- Military Aircraft Support Equipment
- Guidance and Control Systems
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee pricing
- Lack of competitive bidding
- Potential for cost overruns
Tags
defense, department-of-defense, rockwell-collins, navigation-systems, sole-source, cost-plus-fixed-fee, iowa, delivery-order, defense-contract-management-agency, aerospace-and-defense, manufacturing
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.4 million to ROCKWELL COLLINS, INC.. V8.5F2
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 $35.4 million.
What is the period of performance?
Start: 2020-07-28. End: 2024-03-31.
What is Rockwell Collins' track record with the Department of Defense for similar navigation systems?
Rockwell Collins, now part of Collins Aerospace (a Raytheon Technologies company), has a long and extensive history of providing avionics, communication, navigation, and simulation systems to the Department of Defense and other government agencies. They are a major supplier of integrated flight decks, navigation radios, GPS receivers, and other critical components for a wide range of military aircraft platforms. Their track record includes numerous contracts for development, production, and sustainment of these systems, often involving complex, high-value procurements. While specific performance metrics for past contracts are not detailed here, their continued success in securing significant defense contracts suggests a generally positive performance history and strong customer relationships within the DoD.
How does the $35.4M award compare to typical spending on navigation systems by the DoD?
The $35.4 million award to Rockwell Collins represents a significant, but not exceptionally large, investment for a single contract within the Department of Defense's vast procurement landscape. The DoD spends billions annually on a wide array of systems, including navigation technologies. This specific award is for a defined period (July 2020 to March 2024) and likely covers a specific set of navigation systems or components for particular platforms. To contextualize it further, one would need to compare it against the total annual budget allocated for navigation and guidance systems, or against the average value of similar sole-source or competed contracts for comparable equipment. Without broader spending data, it's difficult to definitively state if this is high or low relative to the overall DoD spend, but it indicates a substantial commitment to acquiring these specific capabilities.
What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for navigation systems?
The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for navigation systems are twofold. Firstly, the sole-source nature eliminates competitive pressure, increasing the risk of the government paying a higher price than necessary because there's no benchmark from competing bids. This reduces price discovery and negotiation leverage. Secondly, the CPFF structure, while providing flexibility for uncertain costs, carries the risk of cost escalation. The contractor is reimbursed for allowable costs plus a fixed fee representing profit. This can disincentivize aggressive cost control, as the contractor may be less motivated to minimize expenses if they are assured of cost reimbursement and a fixed profit margin. This combination can lead to overall higher expenditures for the government compared to a competitively bid, fixed-price contract.
What is the expected effectiveness or impact of these navigation systems on DoD operations?
The effectiveness and impact of these navigation systems on DoD operations are expected to be significant, given their critical role. Modern navigation systems are essential for precise mission execution, enabling aircraft, ships, and ground vehicles to operate accurately in diverse and often GPS-denied environments. They are crucial for situational awareness, target acquisition, route planning, and safe return to base. For the DoD, advanced navigation capabilities directly contribute to mission success, force protection, and operational tempo. Improved accuracy and reliability reduce the risk of mission failure, enhance survivability of personnel and assets, and allow for more complex and coordinated operations. The specific impact depends on the platforms and missions these systems support, but they are fundamental to maintaining a technological edge.
How has federal spending on navigation systems manufacturing evolved over the past five years?
Federal spending on navigation systems manufacturing has likely seen fluctuations over the past five years, influenced by defense budget priorities, modernization programs, and geopolitical events. While specific aggregate data for 'navigation systems manufacturing' (NAICS 334511) is not provided, broader trends in defense procurement suggest sustained investment in advanced technologies. The DoD continually invests in upgrading existing platforms and developing new capabilities, where navigation and guidance systems are a core component. Factors such as increased focus on contested environments, electronic warfare, and multi-domain operations may drive demand for more sophisticated and resilient navigation solutions. However, budget constraints and shifting strategic priorities can also lead to reprioritization of spending within the defense sector.
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) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: H9224119R0003
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 52498
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: $38,278,797
Exercised Options: $35,474,543
Current Obligation: $35,427,543
Actual Outlays: $321,816
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9224120D0002
IDV Type: IDC
Timeline
Start Date: 2020-07-28
Current End Date: 2024-03-31
Potential End Date: 2024-03-31 00:00:00
Last Modified: 2025-07-07
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