Navy awards $57.16M for aircraft parts installation, with limited competition and cost-plus-fixed-fee terms

Contract Overview

Contract Amount: $57,164,481 ($57.2M)

Contractor: Rockwell Collins, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-06-30

End Date: 2026-12-31

Contract Duration: 2,010 days

Daily Burn Rate: $28.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: HPTS-M VAL A/C INSTALLATION

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $57.2 million to ROCKWELL COLLINS, INC. for work described as: HPTS-M VAL A/C INSTALLATION Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher costs without strict oversight. 2. Limited competition raises concerns about potential overpayment and reduced value for taxpayer dollars. 3. The duration of the contract (over 5 years) suggests a long-term need for these services. 4. The North American Industry Classification System (NAICS) code 336411 points to aircraft manufacturing, indicating specialized technical requirements. 5. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, suggesting a pre-established relationship. 6. The absence of small business set-aside indicates a focus on large prime contractors.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee (CPFF) pricing structure, while common for complex or uncertain work, can lead to higher costs if not managed diligently. Benchmarking CPFF contracts is challenging due to inherent variability. However, the lack of robust competition for this significant award suggests potential for less favorable pricing than might be achieved in a more competitive environment. The total value of $57.16 million over its multi-year period warrants close scrutiny of cost efficiencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded as a delivery order under an existing contract vehicle, and the data indicates it was 'NOT COMPETED' at the delivery order level. This suggests that the competition may have occurred at the IDIQ contract level, but this specific order was placed without further solicitation. The limited competition for this specific delivery order raises questions about whether the best possible pricing and terms were secured for this particular award, potentially limiting price discovery.

Taxpayer Impact: When a contract is not competed at the delivery order level, taxpayers may not benefit from the most competitive pricing available in the market, potentially leading to higher overall costs for the government.

Public Impact

The primary beneficiaries are the Department of the Navy, ensuring the availability of critical aircraft parts and installation services. The services delivered are essential for maintaining the operational readiness of naval aircraft fleets. The geographic impact is likely concentrated around naval air stations or maintenance facilities where these aircraft are based or serviced. The contract supports specialized technical labor within the aerospace and defense industry, potentially including engineers, technicians, and manufacturing personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not closely monitored.
Limited competition for this delivery order may result in suboptimal pricing.
The long contract duration increases exposure to potential cost increases over time.
Lack of small business participation could limit opportunities for smaller firms in the supply chain.

Positive Signals

The contract supports a critical defense need for aircraft parts installation.
Rockwell Collins, Inc. is an established defense contractor with a track record in aerospace systems.
The award is a delivery order under a potentially pre-competed IDIQ, suggesting some level of prior vetting.
The contract specifies a fixed fee component, providing some cost certainty for the contractor's profit.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components and installation. The market for such specialized services is dominated by a few large, established defense contractors. Spending in this area is driven by military readiness requirements and the lifecycle management of complex aircraft systems. Comparable spending benchmarks would typically involve other contracts for aircraft modification, repair, and component installation for military branches.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the prime contract was likely awarded to a large business, and there is no explicit requirement for small business subcontracting mentioned in the provided data. Consequently, the direct impact on the small business ecosystem may be limited unless the prime contractor voluntarily includes small businesses in its subcontracting plan.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a cost-plus-fixed-fee contract, rigorous financial oversight and auditing are crucial to ensure costs are reasonable and allocable. Transparency may be limited due to the 'not competed' nature of this delivery order. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Component Manufacturing
Aerospace Systems Installation
Defense Logistics Support
Naval Aviation Readiness Programs
Indefinite Delivery/Indefinite Quantity Contracts

Risk Flags

Limited Competition
Cost-Plus-Fixed-Fee Pricing
Lack of Small Business Set-Aside
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.2 million to ROCKWELL COLLINS, INC.. HPTS-M VAL A/C INSTALLATION

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 $57.2 million.

What is the period of performance?

Start: 2021-06-30. End: 2026-12-31.

What is the track record of Rockwell Collins, Inc. with the Department of the Navy for similar aircraft installation contracts?

Rockwell Collins, Inc. (now part of RTX Corporation) has a long-standing history as a major defense contractor, particularly in avionics, communications, and aircraft systems. Their track record with the Department of the Navy includes numerous contracts for aircraft modifications, upgrades, and component installations across various naval platforms. While specific details for 'HPTS-M VAL A/C INSTALLATION' are not provided, their extensive experience suggests a capacity to perform complex technical work. However, a deeper dive into past performance reviews, past due dates, and any contract disputes related to similar naval contracts would be necessary for a comprehensive assessment of their suitability and value proposition for this specific award.

How does the pricing structure (Cost Plus Fixed Fee) compare to other aircraft installation contracts of similar scope and duration?

Cost Plus Fixed Fee (CPFF) contracts are common for projects where the scope of work is not fully defined at the outset or involves significant research and development. For aircraft installation contracts, CPFF can be justified if the specific modifications or integration challenges are complex and unpredictable. However, CPFF contracts inherently carry a higher risk of cost growth compared to fixed-price contracts, as the government bears the cost of performance plus a pre-determined fee. Benchmarking CPFF contracts is difficult due to the variability in cost drivers. Generally, a well-managed CPFF contract should demonstrate that costs are reasonable and allocable, and the fixed fee represents a fair profit margin. Without access to the specific cost data and the negotiated fee, a direct comparison to market rates is challenging, but the lack of competition for this delivery order suggests potential for less favorable pricing than a competitively bid fixed-price contract might yield.

What are the primary risks associated with a 'not competed' delivery order under an IDIQ contract for aircraft parts installation?

The primary risk associated with a 'not competed' delivery order is the potential for suboptimal pricing and reduced value for taxpayer money. When a delivery order is not competed, the government foregoes the opportunity to solicit bids from multiple vendors, which typically drives down prices through competition. This can lead to paying more than necessary for the goods or services. Additionally, it may limit the introduction of innovative solutions or new suppliers. For aircraft parts installation, this could mean higher costs for components, labor, or integration services. While the IDIQ contract itself may have been competed, the decision not to compete individual delivery orders requires strong justification to ensure the government is still achieving best value.

What is the expected impact of this contract on the operational readiness of the Navy's aircraft fleet?

This contract is crucial for maintaining and enhancing the operational readiness of the Navy's aircraft fleet. The 'HPTS-M VAL A/C INSTALLATION' likely refers to the installation of specific systems or components (HPTS-M) that are vital for the functionality, safety, or performance of naval aircraft. By ensuring these parts are installed correctly and on time, the contract directly contributes to the availability of aircraft for training, deployment, and operational missions. Delays or issues with this installation could negatively impact fleet readiness, potentially grounding aircraft or reducing their mission capabilities. Therefore, the successful execution of this contract is directly tied to the Navy's ability to project air power.

How does the duration of the contract (ending in 2026) align with the typical lifecycle of the aircraft systems being supported?

The contract duration extends from June 30, 2021, to December 31, 2026, spanning over five years. This duration suggests that the aircraft systems or components being installed are intended for long-term use or that the installation process itself is extensive and phased. Modern military aircraft often have lifecycles measured in decades, and major system installations or upgrades are typically planned to align with these lifecycles to maximize the return on investment. A multi-year contract allows for sustained support, integration, and potential follow-on work. It also provides stability for the contractor and ensures continuity of service for the Navy, which is essential for complex platforms that require ongoing maintenance and upgrades throughout their operational life.

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: $68,857,218

Exercised Options: $57,164,481

Current Obligation: $57,164,481

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $6,374,162

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