Navy awards $275M for aircraft components, with Thales as sole contractor

Contract Overview

Contract Amount: $11,208,122 ($11.2M)

Contractor: Thales

Awarding Agency: Department of Defense

Start Date: 2006-05-03

End Date: 2008-07-26

Contract Duration: 815 days

Daily Burn Rate: $13.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY)

Sector: Defense

Official Description: 200608!396878!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0100 !A!N! !N! ! !20060503!20070831!275250553!275250553!275250553!N!THALES !45 RUE DE VILLIERS !NEUILLY SUR SE !FR!92200!00000! !FR! ! !FRANCE !+000003594148!N!N!000003594148!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !101 !USMC H-1 UPGRADE !334511!A!A!3!A!S! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!Z!N!Z!B!FR!Y!L!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! !1700!N00019!0001! !

Plain-Language Summary

Department of Defense obligated $11.2 million to THALES for work described as: 200608!396878!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0100 !A!N! !N! ! !20060503!20070831!275250553!275250553!275250553!N!THALES !45 RUE DE VILLIERS !NEUILLY SUR SE !FR!92200!00000! !FR! ! … Key points: 1. Contract awarded for critical aircraft accessories and components, supporting USMC H-1 upgrades. 2. Sole-source award to Thales suggests limited market availability or specialized capabilities. 3. Contract duration of 815 days indicates a medium-term need for these components. 4. The award falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 5. This spending is part of broader naval aviation modernization efforts.

Value Assessment

Rating: fair

The total award amount is $275,250,553. Benchmarking this specific contract is challenging due to its sole-source nature and specialized components. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for money. However, the contract duration and the nature of the components suggest a significant investment in maintaining and upgrading naval aircraft.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Thales, was solicited. This typically occurs when a specific technology or capability is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition limits price discovery and may result in higher costs compared to a fully competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. The government relies on Thales's pricing to be fair and reasonable without market validation.

Public Impact

The primary beneficiaries are the U.S. Marine Corps, receiving upgraded H-1 helicopters. Services delivered include the provision of essential aircraft accessories and components. The geographic impact is primarily within naval aviation facilities and operational theaters. Workforce implications include potential sustainment and maintenance roles related to these components.

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 the bidding process due to sole-source nature.
Dependence on a single supplier for critical aircraft components poses a supply chain risk.

Positive Signals

Award supports critical upgrades to USMC H-1 helicopters, enhancing operational readiness.
Thales is a known entity in aerospace manufacturing, suggesting a level of established capability.
Contract duration provides stability for component supply over a defined period.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components. The market for specialized aircraft parts can be concentrated, with a few key players holding significant market share. The total federal spending on this NAICS code (334511) is substantial, reflecting the ongoing investment in defense systems and platforms. This award represents a portion of that broader investment in maintaining and modernizing military aviation capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting plans for small businesses within the provided data. This award is likely to be fulfilled by the prime contractor, Thales, and its direct suppliers, with no specific focus on engaging the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Defense Contract Management Agency (DCMA) would likely be involved in monitoring performance and compliance. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially Inspector General oversight if issues arise.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
USMC H-1 Upgrade Program
Aerospace Component Manufacturing
Defense Procurement

Risk Flags

Sole-source award
Potential for cost overruns due to lack of competition
Supply chain dependency on a single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.2 million to THALES. 200608!396878!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0100 !A!N! !N! ! !20060503!20070831!275250553!275250553!275250553!N!THALES !45 RUE DE VILLIERS !NEUILLY SUR SE !FR!92200!00000! !FR! ! !FRANCE !+000003594148!N!N!000003594148!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !101 !USMC H-1 UPGRADE !334511!A!A!3!A!S! ! ! !999

Who is the contractor on this award?

The obligated recipient is THALES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $11.2 million.

What is the period of performance?

Start: 2006-05-03. End: 2008-07-26.

What is Thales's track record with the Department of Defense, particularly for similar aircraft components?

Thales is a multinational company with a significant presence in the aerospace and defense industry. While specific details on their track record for this exact component are not in the provided data, their history with the Department of Defense likely includes numerous contracts for avionics, electronic warfare systems, and other critical aircraft components. Their extensive experience suggests a capability to deliver complex systems. However, a deeper dive into past performance reviews, delivery history, and any past disputes or contract issues would be necessary for a comprehensive assessment of their reliability for this specific award.

How does the $275 million award compare to historical spending on similar aircraft components by the Navy?

Comparing this $275 million award requires identifying comparable contracts for similar aircraft components, which is challenging given the sole-source nature and specific application (USMC H-1 upgrades). Historical spending data for the H-1 program or similar rotorcraft modernization efforts would be relevant. Without access to a broader database of historical component procurements, it's difficult to establish a precise benchmark. However, $275 million represents a substantial investment, indicating the critical nature and potential complexity of the components being procured. It suggests a significant portion of the H-1 upgrade budget is allocated to these specific parts.

What are the primary risks associated with a sole-source award for critical aircraft components?

The primary risks associated with a sole-source award for critical aircraft components include a lack of price competition, potentially leading to inflated costs for the government and taxpayers. There's also a reduced incentive for the contractor to innovate or improve efficiency beyond contractual requirements. Furthermore, dependence on a single supplier creates a significant supply chain risk; any disruption in Thales's production or delivery could severely impact the USMC H-1 upgrade program. Finally, the absence of competitive benchmarking makes it harder to ensure the technology remains cutting-edge and cost-effective over the long term.

How effective is the USMC H-1 upgrade program in enhancing the operational capabilities of the Marine Corps?

The effectiveness of the USMC H-1 upgrade program is crucial for assessing the value of this component award. The H-1 program, which includes the upgrade of the AH-1Z Viper attack helicopter and the UH-1Y Venom utility helicopter, aims to modernize the Marine Corps' rotary-wing fleet. These upgrades are intended to improve survivability, lethality, and operational range, enabling the aircraft to meet evolving threats and mission requirements. Successful upgrades enhance the Marine Corps' ability to conduct close air support, troop transport, and reconnaissance missions. The long-term effectiveness hinges on the successful integration of new components and systems, reliable performance in operational environments, and the overall strategic benefit derived from the modernized fleet.

What is the historical spending trend for aircraft accessories and components by the Department of the Navy?

Historical spending by the Department of the Navy on aircraft accessories and components has been substantial and generally follows trends in defense budgets and modernization programs. Over the years, the Navy has consistently invested billions in maintaining and upgrading its vast fleet of aircraft, which includes fixed-wing and rotary-wing platforms. Spending fluctuates based on specific platform life cycles, new technology insertion, and geopolitical demands. Contracts for components can range from routine sustainment parts to highly specialized systems for new or upgraded aircraft. This $275 million award for the H-1 program fits within the broader pattern of significant, ongoing investment in naval aviation readiness and technological advancement.

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: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY) (2)

Evaluated Preference: NONE

Contractor Details

Address: 45 RUE DE VILLIERS, NEUILLY SUR SE

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Timeline