Textron Aviation Defense awarded $33M for T-6B/D ADS-B aircraft development, facing no competition

Contract Overview

Contract Amount: $33,050,665 ($33.1M)

Contractor: Textron Aviation Defense LLC

Awarding Agency: Department of Defense

Start Date: 2015-10-01

End Date: 2023-02-28

Contract Duration: 2,707 days

Daily Burn Rate: $12.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: T-6B/D ADS-B (OUT) AIRCRAFT/ATD NRE DESIGN&DEVELOPMENT AND INITIAL KITS

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67206

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $33.1 million to TEXTRON AVIATION DEFENSE LLC for work described as: T-6B/D ADS-B (OUT) AIRCRAFT/ATD NRE DESIGN&DEVELOPMENT AND INITIAL KITS Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns. 2. Sole-source award limits price discovery and potentially increases costs for taxpayers. 3. Long contract duration (2707 days) suggests a complex and lengthy development process. 4. The contract is for Non-Recurring Engineering (NRE) and initial kits, indicating upfront development costs. 5. Lack of competition raises concerns about whether the government secured the best possible value. 6. The contract's value is significant within the aircraft manufacturing sector for specialized defense systems.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without comparable sole-source NRE contracts for similar defense avionics systems. The cost-plus-fixed-fee structure inherently carries risk for the government, as it allows the contractor to recoup all allowable costs plus a fixed fee, potentially leading to higher final costs than a fixed-price contract. Benchmarking against market rates for similar development efforts is challenging due to the specialized nature of the T-6B/D ADS-B system and the lack of competitive bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This typically occurs when a unique capability is required, or when only one entity possesses the necessary expertise or technology. The absence of competition means the government did not benefit from a range of proposals and pricing, potentially leading to a less favorable price than if multiple companies had competed.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most cost-effective solution, as the lack of competition removes the incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the T-6B/D training aircraft program, which will receive upgraded ADS-B capabilities. The services delivered include design and development of new avionics systems and the production of initial kits for integration. The geographic impact is primarily within Textron Aviation's facilities in Kansas, where the design and development work will occur. Workforce implications include employment for engineers, technicians, and manufacturing personnel involved in the aircraft modification and avionics development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs.
Cost-plus-fixed-fee contract type can incentivize cost overruns.
Long contract duration may indicate schedule risks or scope creep.
Lack of transparency in pricing due to sole-source nature.

Positive Signals

Development of critical ADS-B capabilities for military training aircraft.
Potential for improved safety and air traffic management with ADS-B technology.
Contract supports a specific, potentially unique, defense requirement.

Sector Analysis

The defense aviation sector is characterized by high R&D costs, long development cycles, and significant government investment. Contracts for specialized avionics and aircraft modifications, like the T-6B/D ADS-B system, are often complex and require unique expertise. The market is typically dominated by a few large prime contractors and specialized subcontractors. Spending in this niche area is driven by evolving military requirements and technological advancements, with contracts often being sole-sourced due to proprietary technology or specific platform integration needs.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Textron Aviation Defense voluntarily engages small businesses for specific components or services. Further analysis of subcontracting plans would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are embedded within the cost-plus-fixed-fee structure, requiring detailed reporting of costs and progress. Transparency is limited due to the sole-source nature, but contract modifications and performance reviews would be subject to internal DoD oversight and potentially Inspector General reviews if specific concerns arise.

Related Government Programs

T-6 Texan II Aircraft Program
Avionics Modernization Programs
Defense Air Traffic Control Systems
Aircraft Manufacturing Contracts
Non-Recurring Engineering (NRE) Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.1 million to TEXTRON AVIATION DEFENSE LLC. T-6B/D ADS-B (OUT) AIRCRAFT/ATD NRE DESIGN&DEVELOPMENT AND INITIAL KITS

Who is the contractor on this award?

The obligated recipient is TEXTRON AVIATION DEFENSE 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 $33.1 million.

What is the period of performance?

Start: 2015-10-01. End: 2023-02-28.

What is the historical spending pattern for Textron Aviation Defense on similar sole-source contracts for aircraft development?

Analyzing historical spending for Textron Aviation Defense on comparable sole-source contracts for aircraft development is crucial for assessing value. Without specific data on past NRE contracts for avionics upgrades or similar specialized systems awarded on a sole-source basis, it's difficult to establish a precise benchmark. However, sole-source contracts, by their nature, often represent higher unit costs compared to competitively bid programs due to the absence of market pressure. If Textron has a history of cost overruns or significant price increases on similar sole-source development efforts, it would raise concerns about the current contract's financial prudence. A review of past contract performance metrics, such as adherence to schedule and budget, would provide further insight into the contractor's track record in executing complex development projects under non-competitive conditions.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for this type of development work in terms of risk and potential cost savings?

The Cost-Plus-Fixed-Fee (CPFF) contract structure places a significant portion of the financial risk on the government. While it allows the contractor to recover all allowable costs and a predetermined fixed fee, it can incentivize cost overruns as the contractor is guaranteed their fee regardless of the final cost. For development work like the T-6B/D ADS-B NRE, a fixed-price incentive (FPI) or firm-fixed-price (FFP) contract, if feasible given the uncertainties of NRE, could offer better cost control and savings for the government. FFP contracts provide the most cost certainty, while FPI contracts share cost savings or overruns between the government and contractor. The CPFF structure is often used when the scope of work is not well-defined or when significant technical uncertainties exist, but it necessitates robust government oversight to manage costs effectively. Without strong oversight, CPFF contracts can become significantly more expensive than competitively determined fixed-price agreements.

What are the specific technical risks associated with the T-6B/D ADS-B (OUT) AIRCRAFT/ATD NRE DESIGN&DEVELOPMENT, and how are they being mitigated?

The technical risks associated with Non-Recurring Engineering (NRE) for the T-6B/D ADS-B (OUT) system likely revolve around the integration of new Automatic Dependent Surveillance-Broadcast (ADS-B) Out technology into the existing T-6B/D aircraft platform. Specific risks could include compatibility issues with the current avionics suite, performance degradation of the new system, challenges in meeting stringent FAA/DoD certification requirements for airborne equipment, and the complexity of retrofitting or designing new hardware and software. Mitigation strategies, inherent in the NRE process and managed under the CPFF contract, would involve detailed design reviews, prototyping, rigorous testing phases (ground and flight testing), and close collaboration between Textron Aviation Defense engineers and the relevant military program office. The success of these mitigation efforts hinges on the contractor's technical expertise and the government's effective oversight of the development and testing processes.

Given the sole-source nature, what mechanisms are in place to ensure the contractor is not inflating costs or padding the fixed fee?

To mitigate the risks associated with a sole-source award and a CPFF contract structure, the government relies on several oversight mechanisms. The Defense Contract Management Agency (DCMA) plays a critical role in auditing the contractor's incurred costs to ensure they are allowable, allocable, and reasonable according to the contract terms and Federal Acquisition Regulation (FAR). Detailed progress reports, technical milestone tracking, and regular program reviews are mandated to monitor performance and identify potential issues early. The fixed fee itself is negotiated upfront, and while it's guaranteed upon successful completion, the government can scrutinize the contractor's performance against the defined scope and objectives. Furthermore, the contract likely includes clauses allowing the government to terminate the contract for default or convenience if performance is unsatisfactory, providing a final layer of leverage.

What is the expected impact of this ADS-B upgrade on the operational capabilities and safety of the T-6B/D training fleet?

The integration of ADS-B Out technology into the T-6B/D training aircraft is expected to significantly enhance operational capabilities and safety. ADS-B Out enables aircraft to automatically transmit their position, altitude, and velocity to ground stations and other ADS-B equipped aircraft. This improves situational awareness for pilots and air traffic controllers, reducing the risk of mid-air collisions, especially in busy airspace or during training exercises. For the T-6B/D, which serves as a primary trainer, this upgrade aligns with broader national and international mandates for ADS-B equipage, ensuring that these training platforms can operate safely and efficiently within the evolving air traffic management system. It prepares future pilots for operations in environments where ADS-B is standard, contributing to a more seamless transition to advanced operational aircraft.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001915R0075

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc

Address: 201 S GREENWICH, WICHITA, KS, 67207

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,087,812

Exercised Options: $33,051,052

Current Obligation: $33,050,665

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $4,649,947

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline