DoD's $101.7M contract for aircraft manufacturing services awarded to Rockwell Collins, Inc. with no competition

Contract Overview

Contract Amount: $101,698,842 ($101.7M)

Contractor: Rockwell Collins, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-03-15

End Date: 2027-06-30

Contract Duration: 2,298 days

Daily Burn Rate: $44.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NRE AND TRAVEL FOR MCM

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $101.7 million to ROCKWELL COLLINS, INC. for work described as: NRE AND TRAVEL FOR MCM Key points: 1. The contract's value of over $100 million warrants close scrutiny for cost-effectiveness. 2. The absence of competition raises concerns about potential overpricing and limited innovation. 3. The contract duration of nearly 7 years suggests a long-term need for these services. 4. The Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns. 5. The primary contractor, Rockwell Collins, Inc., is a significant player in the aerospace industry. 6. The contract is categorized under Aircraft Manufacturing, a critical defense sector.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific technical requirements. However, the substantial dollar amount necessitates a thorough review of the cost elements, particularly given the CPFF structure which can lead to higher-than-expected costs if not managed diligently. Without competitive bids, it's difficult to ascertain if the government secured the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no formal competition. This approach is typically justified when only one responsible source can provide the required supplies or services. The lack of bidders means that price discovery through market forces was absent, potentially leading to less favorable pricing for the government.

Taxpayer Impact: Taxpayers may be exposed to higher costs due to the absence of competitive pressure to drive down prices. The government's negotiating position is weakened without alternative offers.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially end-users of the aircraft systems. The contract delivers essential aircraft manufacturing services, likely supporting readiness and operational capabilities. The geographic impact is centered around the contractor's facilities in Iowa. The contract supports specialized jobs within the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
CPFF contract type can lead to cost escalation.
Long contract duration increases exposure to potential cost increases over time.

Positive Signals

Award to an established aerospace manufacturer suggests technical capability.
Contract supports critical defense aircraft manufacturing needs.
Specific North American Industry Classification System (NAICS) code indicates a defined scope of work.

Sector Analysis

The Aircraft Manufacturing sector (NAICS 336411) is a highly specialized and capital-intensive industry critical to national defense. This contract falls squarely within this domain, involving the production or modification of aircraft components or systems. The market is characterized by a few large, established players due to high barriers to entry, including technological expertise, regulatory compliance, and significant R&D investment. Government contracts often represent a substantial portion of revenue for companies in this sector.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. The absence of a set-aside suggests that the primary award was made to a large business, and the direct impact on the small business ecosystem is likely minimal unless significant subcontracting opportunities arise.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the performance metrics outlined in the contract and the CPFF structure, which requires detailed cost reporting. Transparency may be limited due to the sole-source nature and the proprietary information often associated with defense manufacturing. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Aircraft Procurement
Naval Aviation Support Contracts
Aerospace Manufacturing Services
Cost-Plus Fixed Fee Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns
Lack of competitive pricing pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $101.7 million to ROCKWELL COLLINS, INC.. NRE AND TRAVEL FOR MCM

Who is the contractor on this award?

The obligated recipient is ROCKWELL COLLINS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $101.7 million.

What is the period of performance?

Start: 2021-03-15. End: 2027-06-30.

What is the historical spending pattern for Rockwell Collins, Inc. with the Department of Defense, specifically for aircraft manufacturing services?

Analyzing historical spending for Rockwell Collins, Inc. with the Department of Defense reveals a consistent and significant relationship, particularly in the realm of aerospace and defense systems. Prior to its acquisition by Collins Aerospace (a Raytheon Technologies company), Rockwell Collins was a major supplier of avionics, communication, and navigation systems. Federal procurement data indicates substantial contract awards over many years, often through competitive processes but also including sole-source awards for specialized or follow-on work. For aircraft manufacturing services specifically, the spending would be tied to the integration, modification, or production of aircraft systems. Without access to a detailed historical database filtered precisely for 'aircraft manufacturing' and 'Rockwell Collins, Inc.' as the prime contractor, a precise dollar figure is elusive. However, the company's established presence and the nature of its products suggest a multi-billion dollar cumulative relationship with the DoD over decades, supporting various aircraft platforms.

How does the pricing structure (Cost Plus Fixed Fee) typically impact the final cost compared to fixed-price contracts for similar aircraft manufacturing services?

The Cost Plus Fixed Fee (CPFF) pricing structure, as used in this $101.7 million contract, differs significantly from fixed-price contracts. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often employed when the scope of work is not precisely defined, or when there is significant uncertainty in the costs involved, such as in research and development or complex manufacturing processes. While it allows for flexibility and ensures the contractor is compensated for unforeseen challenges, it places a greater burden on the government to meticulously audit costs. Compared to fixed-price contracts, where the contractor assumes more risk and the price is set upfront, CPFF contracts generally carry a higher risk of cost escalation for the government. If costs exceed initial estimates, the government pays more, though the contractor's fee remains fixed. This can lead to final costs that are substantially higher than initially projected, whereas a fixed-price contract would lock in the total cost, forcing the contractor to absorb any cost overruns.

What are the potential risks associated with a sole-source award for a contract of this magnitude in the defense sector?

Sole-source awards, particularly for large-value contracts like this $101.7 million aircraft manufacturing agreement, present several potential risks for the government and taxpayers. The most significant risk is the lack of price competition. Without competing bids, the government loses the opportunity to leverage market forces to secure the best possible price and terms. This can lead to inflated costs, as the contractor may not feel the same pressure to be efficient or innovative. Another risk is reduced transparency; the justification for a sole-source award needs to be robust, and without competitive proposals, it can be harder to independently verify the necessity and reasonableness of the chosen contractor and the proposed price. Furthermore, sole-source awards can stifle innovation by limiting the entry of new or alternative solutions from other potential providers. Finally, there's a risk of contractor complacency; without the threat of losing future business to competitors, the incumbent contractor might be less motivated to deliver exceptional value or proactively identify cost-saving opportunities.

What is the typical performance context for Rockwell Collins, Inc. in fulfilling complex aircraft manufacturing contracts for the Department of Defense?

Rockwell Collins, Inc. (now part of Collins Aerospace) has a long-standing and generally strong track record in fulfilling complex contracts for the Department of Defense, particularly in areas related to avionics, communication, navigation, and integrated systems for aircraft. Their performance context typically involves delivering highly sophisticated, technologically advanced products that meet stringent military specifications and operational requirements. Historically, they have been involved in major aircraft programs, providing critical components and systems that enhance aircraft functionality, safety, and mission effectiveness. While specific performance metrics for this particular contract are not detailed here, the company's reputation is built on its ability to manage complex engineering, manufacturing, and integration challenges. Performance issues, when they arise in such contracts, often relate to schedule delays, cost overruns (especially in CPFF contracts), or technical integration challenges, but Rockwell Collins has generally been viewed as a reliable partner in the defense industrial base.

How does the geographic location of the contractor (Iowa) potentially influence contract performance or costs for this defense contract?

The geographic location of the contractor, Rockwell Collins, Inc. in Iowa, can influence contract performance and costs in several ways for this $101.7 million defense contract. Firstly, it impacts logistics and supply chain management. Depending on the location of the government's facilities or other key suppliers, transportation costs for materials and finished goods can be a factor. Secondly, labor costs in Iowa may differ from those in other regions, potentially affecting the overall cost of the contract, especially under a CPFF structure where labor is a direct cost. Thirdly, the presence of a significant aerospace manufacturing base in Iowa could indicate a skilled workforce and established infrastructure, which would be positive for performance. However, if specialized skills or materials are not readily available locally, the contractor might incur additional costs for travel, training, or sourcing from further afield. The specific impact is highly dependent on the nature of the aircraft manufacturing services and the broader supply chain network involved.

Industry Classification

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

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 52498

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: $101,729,469

Exercised Options: $101,698,842

Current Obligation: $101,698,842

Subaward Activity

Number of Subawards: 35

Total Subaward Amount: $9,612,501

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001919G0031

IDV Type: BOA

Timeline