DoD Awards $569M Contract to Alliant Techsystems for Guided Missile and Space Vehicle Manufacturing

Contract Overview

Contract Amount: $568,968,881 ($569.0M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2019-03-07

End Date: 2025-07-30

Contract Duration: 2,337 days

Daily Burn Rate: $243.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: SYSTEMS ENGINEERING AND DEVELOPMENT

Place of Performance

Location: NORTHRIDGE, LOS ANGELES County, CALIFORNIA, 91324

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $569.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: SYSTEMS ENGINEERING AND DEVELOPMENT Key points: 1. Significant contract value of $569 million awarded to Alliant Techsystems Operations LLC. 2. Focus on guided missile and space vehicle manufacturing indicates a critical defense capability. 3. The contract spans over five years, suggesting a long-term need and commitment. 4. Lack of competition raises questions about potential price overruns and value for taxpayer money.

Value Assessment

Rating: questionable

The contract type is Cost Plus Incentive Fee, which can lead to higher costs if not managed carefully. Without a competitive benchmark, assessing the pricing's fairness is difficult, but the lack of competition suggests potential for inflated costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.

Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for these defense systems, as there was no market pressure to drive down prices.

Public Impact

Ensures continued production of vital guided missile and space vehicle components for national defense. Supports jobs and technological advancement within the aerospace and defense manufacturing sector. Potential for increased costs due to lack of competitive bidding impacts overall defense budget allocation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost-plus contract type can incentivize higher spending.
Long contract duration increases exposure to cost escalation.

Positive Signals

Addresses critical defense needs for missile and space vehicles.
Supports a key defense contractor with significant experience.

Sector Analysis

This contract falls within the Defense sector, specifically in guided missile and space vehicle manufacturing. Spending in this area is typically high due to national security requirements, but competitive bidding is crucial for cost efficiency.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. Future opportunities should explore subcontracting possibilities to ensure small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure cost controls and performance metrics are met. Regular reviews of the incentive fee structure are essential.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $569.0 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. SYSTEMS ENGINEERING AND DEVELOPMENT

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $569.0 million.

What is the period of performance?

Start: 2019-03-07. End: 2025-07-30.

What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities or urgent needs. The Department of Defense should provide detailed documentation supporting this decision. To ensure fair pricing, robust negotiation strategies, independent cost estimates, and stringent oversight of the Cost Plus Incentive Fee structure are critical. Regular performance reviews and audits are necessary to monitor expenditures and contractor performance.

What are the potential risks associated with a Cost Plus Incentive Fee contract for this type of defense procurement?

Cost Plus Incentive Fee (CPIF) contracts, while offering flexibility, carry risks. The government agrees to cover all allowable costs plus a pre-determined fee, which is adjusted based on performance against targets. This can incentivize the contractor to exceed cost targets if oversight is insufficient, as the fee increases with performance. Without strong cost controls and clear performance metrics, there's a risk of cost overruns and reduced value for taxpayer money.

How does this contract contribute to the overall effectiveness of U.S. guided missile and space vehicle capabilities?

This contract is crucial for maintaining and advancing the U.S.'s capabilities in guided missile and space vehicle manufacturing. It ensures the continued supply of essential components and systems necessary for national defense and space exploration initiatives. The long-term nature of the contract suggests a strategic investment in these critical technologies, aiming to sustain technological superiority and operational readiness.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001918R0032

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 9401 CORBIN AVE, NORTHRIDGE, CA, 91324

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: $571,785,108

Exercised Options: $571,785,108

Current Obligation: $568,968,881

Actual Outlays: $46,852,172

Subaward Activity

Number of Subawards: 243

Total Subaward Amount: $66,940,794

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline