DoD awards $13.7M contract for missile propulsion units, raising questions about competition and value

Contract Overview

Contract Amount: $13,703,129 ($13.7M)

Contractor: ATK Tactical Systems Company, LLC

Awarding Agency: Department of Defense

Start Date: 2004-05-06

End Date: 2010-01-25

Contract Duration: 2,090 days

Daily Burn Rate: $6.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: KEYSER, MINERAL County, WEST VIRGINIA, 26726, UNITED STATES OF AMERICA

State: West Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $13.7 million to ATK TACTICAL SYSTEMS COMPANY, LLC for work described as: Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Long contract duration of 2090 days suggests a need for sustained supply, but also risks obsolescence. 3. Fixed-price contract type offers some cost certainty but may not fully incentivize efficiency. 4. Lack of competition raises concerns about whether the government secured the best possible value. 5. The specific nature of missile propulsion units suggests a highly specialized market with few potential bidders. 6. Performance context is limited without details on delivery schedules and quality metrics.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable data for specialized missile propulsion units. The fixed-price structure provides some cost control, but without competitive bids, it's difficult to ascertain if the $13.7 million represents a fair market price. Further analysis would require access to internal cost estimates or data from similar sole-source procurements within the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means the government did not benefit from the price reductions and innovation that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no market pressure to drive down costs. It also limits opportunities for other businesses to compete for government contracts.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the supply of critical components for missile systems. Services delivered include the manufacturing and supply of guided missile and space vehicle propulsion unit parts. Geographic impact is centered in West Virginia, where ATK Tactical Systems Company, LLC is located. Workforce implications include employment at the contractor's facility in West Virginia, supporting specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Long contract duration increases risk of technology obsolescence or changing requirements.
Lack of transparency in the justification for sole-source award.
Limited public data to assess contractor performance or value for money.
Potential for contractor to leverage unique position for less favorable terms over time.

Positive Signals

Fixed-price contract provides some cost certainty for the government.
Contract addresses a critical defense need for specialized propulsion components.
Contractor is likely experienced in this niche manufacturing area.
Award supports domestic manufacturing capabilities in a sensitive sector.

Sector Analysis

The aerospace and defense sector, particularly the segment focused on missile propulsion systems, is characterized by high barriers to entry due to specialized technology, stringent quality control, and security requirements. This contract falls within the manufacturing of guided missile and space vehicle propulsion units and parts. The market is often dominated by a few key players due to the complexity and capital investment required. Spending in this area is critical for national defense, and contracts are typically long-term and high-value.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the specialized nature of missile propulsion unit manufacturing, it is unlikely that small businesses would be primary contractors for such a complex requirement. Subcontracting opportunities for small businesses may exist, but these would depend on the prime contractor's procurement strategy and the specific components or services needed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations, likely managed by the Defense Contract Management Agency (DCMA). Accountability measures would be embedded in the contract terms, including delivery schedules, quality standards, and payment milestones. Transparency is limited due to the sole-source nature and the sensitive defense application, with detailed justifications for the award likely not publicly accessible.

Related Government Programs

Missile Manufacturing
Aerospace Propulsion Systems
Defense Industrial Base
Guided Missile Components
Space Vehicle Propulsion

Risk Flags

Sole-source award
Lack of competitive bidding
Long contract duration
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.7 million to ATK TACTICAL SYSTEMS COMPANY, LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ATK TACTICAL SYSTEMS COMPANY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $13.7 million.

What is the period of performance?

Start: 2004-05-06. End: 2010-01-25.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' (sole-source). The specific justification for this sole-source award is not detailed in the provided data. Typically, sole-source procurements are justified when only one responsible source is available or capable of meeting the agency's needs. This could be due to unique technological capabilities, proprietary information, urgent and compelling circumstances, or specific security requirements. Without further documentation from the Department of Defense, the precise reasons remain unknown, but it suggests a highly specialized or critical component where competition was deemed impractical or impossible.

How does the $13.7 million contract value compare to similar procurements for missile propulsion units?

Direct comparison of the $13.7 million contract value to similar procurements is difficult without access to a broader dataset of specialized defense contracts. Missile propulsion units are highly complex and critical components, and their cost can vary significantly based on the specific missile system, technological sophistication, quantity, and contract terms. As this was a sole-source award, it inherently bypasses the price discovery mechanism of competitive bidding. Therefore, it is challenging to definitively state whether $13.7 million represents a 'good' or 'bad' value without internal cost analyses, benchmark data from other sole-source awards for comparable systems, or detailed technical specifications.

What are the potential risks associated with a sole-source contract of this duration (2090 days)?

A sole-source contract of 2090 days (approximately 5.7 years) carries several risks. Firstly, the lack of competition means the government may pay a premium compared to a competitively bid contract. Secondly, over such a long period, there's an increased risk of technological obsolescence, where the propulsion units or their components become outdated due to advancements in technology. Thirdly, requirements might change during the contract's life, and a sole-source agreement may be less flexible in adapting to these changes compared to a contract with more built-in review points or competitive phases. Finally, the contractor might leverage their sole-source position to negotiate less favorable terms in future modifications or extensions.

What is the track record of ATK Tactical Systems Company, LLC in fulfilling defense contracts, particularly for propulsion systems?

The provided data identifies ATK Tactical Systems Company, LLC as the contractor. While the data confirms their role in this specific $13.7 million contract, it does not offer details on their broader track record, past performance on similar defense contracts, or specific expertise in missile propulsion systems. A comprehensive assessment of their track record would require reviewing historical contract awards, performance evaluations (e.g., CPARS reports), and any past issues or successes related to defense procurements. Without this additional information, it's difficult to gauge their reliability and capability beyond this single contract award.

How does this contract fit into the broader spending patterns for missile systems within the Department of Defense?

This $13.7 million contract represents a specific component procurement within the larger defense budget allocated to missile systems. The Department of Defense invests billions annually in research, development, testing, and procurement of various missile platforms. Contracts for propulsion units, while critical, are typically a subset of the overall program costs. To understand its place in broader spending patterns, one would need to analyze historical and projected budgets for missile programs, identify the specific missile system this contract supports, and compare the value to other major subcontracts or prime contracts within that program. This single contract's value suggests it's for a specific type or quantity of propulsion units rather than an entire missile system.

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

Address: 210 STATE ROUTE 956, ROCKET CENTER, WV, 26726

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline