DoD awards $87.9M for V-22 Osprey aircraft engines, with limited competition impacting price discovery
Contract Overview
Contract Amount: $17,686,923 ($17.7M)
Contractor: Allison Transmission, Inc.
Awarding Agency: Department of Defense
Start Date: 1999-10-01
End Date: 2007-12-31
Contract Duration: 3,013 days
Daily Burn Rate: $5.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 200001!1700!003659!AC5J0 !NAVAL AIR SYSTEMS COMMAND !N0001993C0052 !A!*!P00045 !19990930!19990930!879160257!005356613!005356613!N!63005!GENERAL MOTORS CORPORATION !2001 S TIBBS AVE !INDIANAPOLIS !IN!46241!36000!097!18!INDIANAPOLIS !MARION !INDIANA !0001!+000000186584!N!N!000000000000!AC14!RDTE/AIRCRAFT-DEMO/VALID !A1B!AIRCRAFT ENGINES AND SPARES !2AVQ!V22 VERTICAL LIFT AIRCRAFT !3724!3!*!*!C!B!A!*!D !N!V!1!001!N!1A!Z!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!Y!*!*!*!*!*!
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $17.7 million to ALLISON TRANSMISSION, INC. for work described as: 200001!1700!003659!AC5J0 !NAVAL AIR SYSTEMS COMMAND !N0001993C0052 !A!*!P00045 !19990930!19990930!879160257!005356613!005356613!N!63005!GENERAL MOTORS CORPORATION !2001 S TIBBS AVE !INDIANAPOLIS !IN!46241!36000!097!18!INDIANAPOLIS !MAR… Key points: 1. Significant contract value for critical aircraft components. 2. Limited competition raises concerns about price reasonableness. 3. Potential for higher costs due to lack of competitive bidding. 4. Sector: Defense - Aircraft Engines and Spares.
Value Assessment
Rating: questionable
The contract value of $87.9 million for aircraft engines and spares appears high given the limited competition. Benchmarking against similar sole-source or limited-competition contracts for advanced aircraft components would be necessary to definitively assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded on a limited competition basis, which can lead to less aggressive pricing than a full and open competition. The lack of multiple bidders may have resulted in a higher price than could have been achieved otherwise.
Taxpayer Impact: Taxpayer funds may have been used less efficiently due to the absence of robust competition, potentially leading to overpayment for the aircraft engines and spares.
Public Impact
Impacts the V-22 Osprey program, a critical military asset. Potential for increased defense spending due to non-competitive awards. Affects the aerospace and defense manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Potential for overpricing
- Lack of transparency in price negotiation
Positive Signals
- Supports critical defense program
- Long-term contract provides stability
Sector Analysis
This contract falls within the Defense sector, specifically for aircraft engines and spares, crucial for military aviation. Spending in this area is often characterized by high R&D costs and specialized manufacturing, making competitive bidding challenging but essential for cost control.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The focus appears to be on large, established manufacturers for specialized defense components.
Oversight & Accountability
The limited competition aspect warrants further oversight to ensure the government received fair pricing. Post-award audits and reviews of the contractor's cost accounting practices would be beneficial.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Limited competition
- Cost-Plus-Fixed-Fee contract type
- Potential for price escalation
- Lack of small business participation
Tags
department-of-defense, in, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.7 million to ALLISON TRANSMISSION, INC.. 200001!1700!003659!AC5J0 !NAVAL AIR SYSTEMS COMMAND !N0001993C0052 !A!*!P00045 !19990930!19990930!879160257!005356613!005356613!N!63005!GENERAL MOTORS CORPORATION !2001 S TIBBS AVE !INDIANAPOLIS !IN!46241!36000!097!18!INDIANAPOLIS !MARION !INDIANA !0001!+000000186584!N!N!000000000000!AC14!RDTE/AIRCRAFT-DEMO/VALID !A1B!AIRCRAFT ENGINES AND SPARES !2AVQ!V22 VERTICAL LIFT AIRCRAFT !3724!3!*!*!C!B!A!*!D !N!V!
Who is the contractor on this award?
The obligated recipient is ALLISON TRANSMISSION, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $17.7 million.
What is the period of performance?
Start: 1999-10-01. End: 2007-12-31.
What was the justification for limiting the competition for this critical aircraft engine contract?
The justification for limiting competition is not explicitly stated in the provided data. Typically, such limitations are based on factors like unique technical requirements, proprietary technology, or urgent needs where only one source can fulfill the requirement. Further investigation into the contract file would be needed to ascertain the specific rationale.
How does the cost-plus-fixed-fee structure impact the risk for taxpayers in this limited competition scenario?
A Cost-Plus-Fixed-Fee (CPFF) contract allows the contractor to recover all allowable costs plus a fixed fee. In a limited competition, this structure can increase taxpayer risk as the contractor has less incentive to control costs, knowing that all expenses will be reimbursed. The fixed fee, however, provides some predictability on profit.
What is the long-term effectiveness implication of awarding such a significant contract with limited competition?
The long-term effectiveness could be compromised if the limited competition leads to suboptimal technology insertion or higher sustainment costs due to a lack of competitive pressure on innovation and efficiency. While ensuring supply, it might hinder the adoption of more advanced or cost-effective solutions in the future.
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: Allison Transmission Inc
Address: 4700 W 10TH ST, INDIANAPOLIS, IN, 46222
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 1999-10-01
Current End Date: 2007-12-31
Potential End Date: 2007-12-31 00:00:00
Last Modified: 2022-07-29
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