Alliant Techsystems awarded $32M for AN/AAR-47 missile warning systems, a sole-source contract

Contract Overview

Contract Amount: $32,004,119 ($32.0M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2015-02-13

End Date: 2018-02-15

Contract Duration: 1,098 days

Daily Burn Rate: $29.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/AAR-47 FY15 PRODUCTION CONTRACT.

Place of Performance

Location: NORTHRIDGE, LOS ANGELES County, CALIFORNIA, 91324

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $32.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: AN/AAR-47 FY15 PRODUCTION CONTRACT. Key points: 1. The contract value of $32 million for the AN/AAR-47 missile warning system represents a significant investment in defense capabilities. 2. As a sole-source award, the absence of competition may limit price negotiation leverage. 3. The firm-fixed-price contract structure shifts cost risk to the contractor, Alliant Techsystems. 4. The duration of the contract (nearly three years) suggests a need for sustained production or support. 5. The specific NAICS code (334511) indicates a focus on the manufacturing of guidance and navigation instruments. 6. The contract's performance is managed by the Defense Contract Management Agency, suggesting robust oversight.

Value Assessment

Rating: fair

Benchmarking the value of this $32 million contract for AN/AAR-47 missile warning systems is challenging without direct comparable sole-source awards. However, the firm-fixed-price nature suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the contractor manages costs effectively. The absence of competition, however, raises questions about whether the pricing reflects the best possible value achievable in a competitive environment. Further analysis would require understanding the specific technological advancements and unique capabilities of the AN/AAR-47 system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Alliant Techsystems Operations LLC, was solicited. This typically occurs when a system is unique, proprietary, or requires specialized expertise that only one entity possesses. The lack of competition means there were no other bidders to compare against, potentially impacting price discovery and the government's ability to secure the lowest possible price.

Taxpayer Impact: Taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The government's negotiating position is inherently weaker without alternative offers.

Public Impact

The primary beneficiaries are the U.S. military branches that utilize the AN/AAR-47 missile warning system for enhanced aircraft survivability. The contract delivers critical components and potentially full systems for the AN/AAR-47, a key defense asset. The contract is associated with a California (SN: CALIFORNIA) based contractor, potentially impacting the regional economy and workforce. The production and delivery of these systems support jobs within the aerospace and defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing advantages.
Lack of transparency in pricing due to no competitive bids.
Potential for cost creep if not rigorously managed, despite FFP.
Dependence on a single supplier for critical defense technology.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Contract awarded to an established defense contractor with likely relevant experience.
Specific system (AN/AAR-47) addresses a critical defense need for missile warning.
Managed by DCMA, indicating established oversight processes.

Sector Analysis

The contract falls within the aerospace and defense manufacturing sector, specifically focusing on the production of electronic systems for aircraft. This sector is characterized by high technological barriers to entry, significant R&D investment, and often involves specialized, proprietary technologies. The market size for such defense electronics is substantial, driven by government procurement needs for advanced military platforms. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar advanced electronic warfare or sensor systems.

Small Business Impact

This contract does not appear to have a small business set-aside component (SB: false). As a sole-source award to a large prime contractor, there is a potential for subcontracting opportunities for small businesses within Alliant Techsystems' supply chain. However, the extent to which small businesses will benefit depends on the prime contractor's subcontracting plan and the availability of qualified small business suppliers for the specific components required for the AN/AAR-47 system.

Oversight & Accountability

Oversight for this contract is provided by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm-fixed-price contract type provides a degree of accountability by placing cost risk on the contractor. Transparency regarding the specific details of the sole-source justification and pricing negotiations would be crucial for a full assessment of accountability, but is often limited in sole-source procurements.

Related Government Programs

Missile Warning Systems
Aircraft Survivability Equipment
Defense Electronics Manufacturing
Sole-Source Defense Contracts
Department of Defense Procurement

Risk Flags

Sole-source award may limit price competition.
Lack of transparency in justification for sole-source procurement.
Potential for contractor lock-in due to specialized technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. AN/AAR-47 FY15 PRODUCTION CONTRACT.

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS 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 $32.0 million.

What is the period of performance?

Start: 2015-02-13. End: 2018-02-15.

What is the specific technological advantage or unique capability of the AN/AAR-47 system that necessitates a sole-source award?

The AN/AAR-47 is an advanced missile warning system designed to detect and alert aircrews to incoming infrared-guided missiles. Its specific technological advantages often lie in its sophisticated sensor technology, rapid processing capabilities, and integration with other electronic warfare systems. These systems are typically developed under specific research and development programs, resulting in proprietary technology and intellectual property held by the original developer, in this case, likely Alliant Techsystems or its predecessors. The unique nature of this technology, its integration complexity, and the need for specialized manufacturing processes often lead to sole-source justifications, as replicating or competing the production of such a specialized system would require significant time, investment, and potentially compromise national security if not handled by the original expert.

How does the $32 million contract value compare to historical spending on the AN/AAR-47 system or similar missile warning systems?

Comparing the $32 million contract value requires historical data specific to the AN/AAR-47 program and similar missile warning systems. Without access to detailed historical spending reports for this specific contract line item, a direct comparison is difficult. However, the value suggests a significant procurement quantity or a complex upgrade/sustainment effort. Typically, missile warning systems can range from tens of thousands to hundreds of thousands of dollars per unit, depending on complexity and platform integration. A $32 million award could represent the production of several hundred units or a sustainment contract covering a substantial period. Analysis of past awards for the AN/AAR-47 or comparable systems like the AN/ALQ-144 or AAR-47 variants would be necessary to determine if this award represents an increase, decrease, or stable level of spending.

What are the key performance indicators (KPIs) or metrics used to assess the performance of Alliant Techsystems Operations LLC under this contract?

Key performance indicators (KPIs) for a contract like this typically revolve around delivery schedules, quality standards, and system reliability. For the AN/AAR-47 production contract, specific KPIs would likely include: 1. On-time delivery: Meeting the specified delivery dates for each unit or lot of systems. 2. Quality Acceptance Rate: The percentage of delivered units that pass all required inspections and tests without defects. 3. Technical Performance: Ensuring the delivered systems meet all specified technical requirements and performance parameters, such as detection range, accuracy, and false alarm rates. 4. Reliability: Measuring the Mean Time Between Failures (MTBF) for the delivered systems during testing or initial operational use. The Defense Contract Management Agency (DCMA) would typically monitor these KPIs through various reporting mechanisms and inspections.

What is the potential impact of this sole-source award on future competition for upgrades or replacements of the AN/AAR-47 system?

A sole-source award for the production of the AN/AAR-47 system can have a mixed impact on future competition. On one hand, it solidifies Alliant Techsystems' position as the incumbent provider, potentially making it difficult for competitors to enter the market for upgrades or sustainment due to established expertise and existing infrastructure. On the other hand, the government may use the performance and pricing data from this sole-source contract as a basis for future competitive solicitations, especially if the system is nearing the end of its lifecycle or if new technologies emerge. If the government actively seeks to foster competition for future iterations, they might structure requirements to allow for new entrants or encourage partnerships. However, without proactive measures, the incumbent advantage can significantly deter future competition.

Are there any known issues or concerns regarding the performance or reliability of the AN/AAR-47 system that this contract aims to address?

Information regarding specific performance or reliability issues with the AN/AAR-47 system that this particular contract aims to address is not publicly detailed in the provided data. However, defense contracts, especially for critical systems like missile warning, often include provisions for addressing obsolescence, improving reliability, enhancing capabilities, or ensuring continued operational readiness. If this contract is for 'production,' it implies ongoing manufacturing based on an established design. If there were significant known issues, the contract might be framed more as a 'rework,' 'upgrade,' or 'sustainment' effort with specific corrective actions. The firm-fixed-price nature suggests the contractor is responsible for delivering conforming product, implying that any pre-existing design flaws should have been resolved or are being managed within the contract's scope.

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: COMM/DETECT/COHERENT RADIATION

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

Parent Company: Northrop Grumman Innovation Systems LLC

Address: 13133 34TH ST N, CLEARWATER, FL, 33762

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: $32,106,373

Exercised Options: $32,106,373

Current Obligation: $32,004,119

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline