DoD's $39.4M R&D contract with Aerojet Rocketdyne Inc. for advanced propulsion systems

Contract Overview

Contract Amount: $39,377,053 ($39.4M)

Contractor: Aerojet Rocketdyne Inc

Awarding Agency: Department of Defense

Start Date: 2019-07-25

End Date: 2024-12-20

Contract Duration: 1,975 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: RESEARCH AND DEVELOPMENT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $39.4 million to AEROJET ROCKETDYNE INC for work described as: RESEARCH AND DEVELOPMENT Key points: 1. Contract awarded for research and development in physical sciences, focusing on advanced propulsion. 2. Aerojet Rocketdyne Inc. is the sole contractor for this specific R&D effort. 3. The contract duration spans over five years, indicating a long-term research objective. 4. Awarded by the Missile Defense Agency, suggesting a focus on strategic defense capabilities. 5. The contract type is Cost Plus Fixed Fee, which can present cost control challenges. 6. This contract falls under the broad category of physical, engineering, and life sciences R&D.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee (CPFF) contract is challenging without detailed cost breakdowns. CPFF contracts inherently carry risk for the government as the contractor is reimbursed for all allowable costs plus a fixed fee, potentially leading to cost overruns if not managed closely. Comparing it to similar R&D contracts for advanced propulsion systems would require access to proprietary cost data and performance metrics. However, the fixed fee component provides some level of cost predictability for the contractor's profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The number of bidders is not specified, but the fact that it was competed openly suggests a competitive process was initiated. This approach is generally favored to ensure the government receives the best value through market forces.

Taxpayer Impact: Full and open competition aims to drive down prices and encourage innovation by allowing any qualified vendor to participate, ultimately benefiting taxpayers through potentially more cost-effective solutions.

Public Impact

The primary beneficiaries are the Department of Defense and the Missile Defense Agency, receiving advanced propulsion technology. The services delivered include research and development critical for enhancing missile defense capabilities. The contract is associated with Alabama (AL), suggesting potential localized economic impact and workforce development in that state. The contract supports specialized R&D roles, likely involving highly skilled engineers and scientists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize cost overruns if not rigorously monitored.
The long duration of the contract requires sustained oversight to ensure progress and adapt to evolving research needs.
Reliance on a single contractor for this specific R&D effort could limit future competitive options if alternatives are not explored.

Positive Signals

Awarded through full and open competition, suggesting a robust initial selection process.
The contract supports critical national defense research and development objectives.
The fixed fee component provides a degree of cost certainty regarding contractor profit.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on research and development for propulsion systems. The market for advanced aerospace R&D is highly specialized, with a limited number of prime contractors possessing the necessary expertise and facilities. Spending in this area is driven by national security requirements and technological advancement goals. Comparable spending benchmarks would typically be found within classified defense budgets or specific program solicitations.

Small Business Impact

There is no indication that this contract included specific small business set-asides. Given the specialized nature of advanced propulsion research and development, it is likely that the prime contractor, Aerojet Rocketdyne Inc., possesses unique capabilities. However, opportunities for small businesses may exist further down the supply chain as subcontractors, depending on the specific technological components and services required.

Oversight & Accountability

Oversight for this contract would primarily reside with the Missile Defense Agency contracting officers and program managers. They are responsible for monitoring cost, schedule, and performance, particularly given the Cost Plus Fixed Fee structure. Accountability measures would include regular progress reports, milestone reviews, and audits. Transparency is generally limited for defense R&D contracts due to national security considerations, but contract award details are publicly available.

Related Government Programs

Missile Defense Systems
Advanced Propulsion Research
Aerospace Engineering Services
Department of Defense Research Contracts
Cost-Plus Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Long contract duration necessitates sustained monitoring of progress and adaptation to evolving research needs.
Sole contractor status for this specific effort could limit future competitive options if not managed proactively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.4 million to AEROJET ROCKETDYNE INC. RESEARCH AND DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is AEROJET ROCKETDYNE INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $39.4 million.

What is the period of performance?

Start: 2019-07-25. End: 2024-12-20.

What is the specific technological advancement sought by the Missile Defense Agency through this R&D contract?

The provided data indicates the contract is for 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)' with the North American Industry Classification System (NAICS) code 541715. While the specific technological advancement is not detailed in the summary data, the awarding agency, Missile Defense Agency (MDA), strongly suggests the R&D is focused on improving or developing new propulsion systems for interceptors, boost phase defense systems, or related missile defense technologies. This could involve areas like increased thrust, improved maneuverability, reduced size, enhanced reliability, or novel fuel/propellant technologies critical for countering advanced threats.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other contract types for similar R&D efforts?

Cost Plus Fixed Fee (CPFF) contracts are common for research and development where the scope of work is not precisely defined at the outset, and innovation is a key objective. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, where the price is set regardless of actual costs, and Cost Plus Incentive Fee (CPIF) contracts, which include incentives for meeting cost or performance targets. For R&D, CPFF offers flexibility but can lead to cost overruns if not managed diligently, as the contractor has less incentive to control costs compared to fixed-price arrangements. Other agencies might opt for CPIF or even Firm-Fixed-Price (FFP) if the R&D objectives are very well-defined and achievable within a predictable cost structure.

What is Aerojet Rocketdyne Inc.'s track record with the Department of Defense, particularly in missile propulsion R&D?

Aerojet Rocketdyne Inc. (now part of Aerojet Rocketdyne Holdings, Inc., which was acquired by L3Harris Technologies) has a long and established history as a key supplier of propulsion systems for U.S. military and space applications. They have been a significant contractor for the Department of Defense (DoD) and NASA for decades, developing and manufacturing rocket engines, missile propulsion systems, and related technologies. Their portfolio includes propulsion for numerous strategic and tactical missile systems, as well as launch vehicles. Their track record with the DoD in missile propulsion R&D is extensive, often involving complex, high-stakes projects critical to national security. Past performance reviews and contract histories would provide more granular detail on their success rates, cost performance, and technical achievements in this domain.

What are the potential risks associated with a sole-source award for advanced propulsion R&D, even if initially competed?

While this contract was awarded under 'full and open competition,' the data indicates Aerojet Rocketdyne Inc. is the sole contractor for this specific effort. The primary risk with a sole-source award, even if the initial competition was broad, is the potential for reduced competitive pressure on future phases or follow-on contracts. If Aerojet Rocketdyne Inc. develops unique intellectual property or becomes the indispensable provider of a specific technology, the government may have limited options for future procurements, potentially leading to higher prices or less innovation. This risk is mitigated if the initial competition was robust and the government actively seeks to foster competition in subsequent stages or through alternative technological paths.

How does the $39.4 million contract value compare to overall Missile Defense Agency R&D spending?

The $39.4 million contract value represents a specific investment in advanced propulsion R&D by the Missile Defense Agency (MDA). To contextualize this amount, one would need to compare it against the MDA's total annual budget and its R&D allocation. The MDA's budget typically runs into billions of dollars annually, funding a wide array of programs including missile defense systems development, testing, and sustainment. A $39.4 million contract, while substantial for a single R&D effort, would likely represent a relatively small fraction of the MDA's overall R&D portfolio. For instance, if the MDA's annual R&D budget is several billion dollars, this contract might constitute less than 1-2% of that R&D spending, focusing on a critical but specific technological area.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: HQ014718S0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 950 EXPLORER BLVD NW, HUNTSVILLE, AL, 35806

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: $39,377,053

Exercised Options: $39,377,053

Current Obligation: $39,377,053

Actual Outlays: $2,050,109

Subaward Activity

Number of Subawards: 49

Total Subaward Amount: $4,716,621

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline