DoD's $18.86M contract for Digital Recovery Sequencers awarded to Rockwell Collins Inc. raises value concerns
Contract Overview
Contract Amount: $18,859,203 ($18.9M)
Contractor: Rockwell Collins Inc
Awarding Agency: Department of Defense
Start Date: 2010-09-30
End Date: 2013-07-10
Contract Duration: 1,014 days
Daily Burn Rate: $18.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DIGITAL RECOVERY SEQUENCER
Place of Performance
Location: FAIRFIELD, SOLANO County, CALIFORNIA, 94533
Plain-Language Summary
Department of Defense obligated $18.9 million to ROCKWELL COLLINS INC for work described as: DIGITAL RECOVERY SEQUENCER Key points: 1. The contract's value appears high relative to its duration and scope. 2. Limited competition suggests potential for inflated pricing. 3. The firm fixed-price contract type shifts risk to the government. 4. Performance context is unclear without specific delivery metrics. 5. This contract falls within the Defense sector, specifically supporting Explosives Manufacturing. 6. The lack of small business involvement is noted.
Value Assessment
Rating: questionable
The total award of $18.86 million over approximately 3.3 years (1014 days) for Digital Recovery Sequencers warrants scrutiny. Without specific details on the quantity or complexity of the sequencers, it's difficult to benchmark precisely. However, the average annual cost approaches $5.7 million. Compared to typical IT or specialized equipment contracts of similar duration, this appears on the higher end, especially given the 'NOT COMPETED' status which often leads to less favorable pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or proprietary technology essential for the requirement. The lack of multiple bidders means the government did not benefit from a competitive bidding process, which usually drives down prices and encourages innovation.
Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price, potentially leading to higher costs for taxpayers. It also reduces the incentive for other companies to develop competing technologies.
Public Impact
The Department of the Navy benefits from the acquisition of specialized Digital Recovery Sequencers. These sequencers are intended for use in Explosives Manufacturing, a critical defense function. The contract's geographic impact is centered in California, where the contractor is located. The contract likely supports a specialized technical workforce within Rockwell Collins Inc.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery and potentially inflates costs.
- Firm fixed-price contract places risk of cost overruns on the government.
- Lack of transparency in the justification for sole-source award.
- Absence of small business participation noted.
Positive Signals
- Contract awarded to a known entity (Rockwell Collins Inc.) with potential existing expertise.
- Firm fixed-price contract provides cost certainty if scope is well-defined.
- Contract duration is defined, allowing for planning.
Sector Analysis
The defense sector, particularly within specialized manufacturing and technology, often involves high-value, low-volume procurements. Contracts for unique equipment like Digital Recovery Sequencers can be substantial. The market for such specialized items is often limited, with a few key players possessing the necessary technical capabilities. Benchmarking this spending is challenging without comparable sole-source awards for similar niche technologies.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting opportunities for small businesses. The sole-source nature of the award further limits the potential for small business involvement. This suggests that the primary benefits of this contract accrue to the large prime contractor, with minimal direct impact on the broader small business ecosystem within this specific procurement.
Oversight & Accountability
Oversight for this contract would fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to internal review and potentially audits by the Defense Contract Audit Agency (DCAA). Transparency is limited due to the non-competitive nature, and specific Inspector General (IG) involvement would depend on identified performance or cost issues.
Related Government Programs
- Defense Logistics Agency (DLA) procurement of specialized equipment
- Naval Sea Systems Command (NAVSEA) contracts for manufacturing support
- Department of Defense research and development in explosives technology
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Firm fixed-price contract shifts cost overrun risk to the government.
- Potential for inflated pricing due to lack of competition.
- Limited transparency regarding the necessity of sole-source justification.
Tags
defense, department-of-the-navy, rockwell-collins-inc, sole-source, firm-fixed-price, explosives-manufacturing, digital-recovery-sequencer, california, large-business, not-competed
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.9 million to ROCKWELL COLLINS INC. DIGITAL RECOVERY SEQUENCER
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 $18.9 million.
What is the period of performance?
Start: 2010-09-30. End: 2013-07-10.
What specific capabilities does Rockwell Collins Inc. possess that justified a sole-source award for these Digital Recovery Sequencers?
The justification for a sole-source award typically rests on unique capabilities, proprietary technology, or the unavailability of alternatives. For Rockwell Collins Inc. and Digital Recovery Sequencers, this could stem from patented technology, highly specialized manufacturing processes, or integration requirements with existing proprietary systems within the Department of the Navy's explosive manufacturing infrastructure. Without the specific sole-source justification documentation, it's speculative, but common reasons include intellectual property rights, essential system compatibility, or a lack of qualified alternative sources capable of meeting the stringent technical requirements within the required timeframe. This necessitates a thorough review of the government's determination that no other source could fulfill the need.
How does the $18.86 million award compare to historical spending on similar Digital Recovery Sequencers or related explosive manufacturing equipment?
Direct historical spending comparisons for 'Digital Recovery Sequencers' are difficult without more specific product definitions and broader market data. However, the $18.86 million awarded to Rockwell Collins Inc. over approximately 3.3 years represents a significant investment. If these sequencers are highly specialized components within a larger manufacturing system, their cost might be justified. If they are more standardized equipment, the price per unit could be high. Benchmarking against other sole-source awards for niche defense manufacturing technology is essential. A review of prior contracts for similar functionalities, even under different names, and the quantities procured would provide a clearer picture of whether this award represents fair market value or an inflated price due to the lack of competition.
What are the key performance indicators (KPIs) associated with this contract, and how has Rockwell Collins Inc. performed against them?
Key performance indicators (KPIs) for a contract like this would typically focus on delivery timelines, quality of the sequencers, reliability, and adherence to technical specifications. Since the contract was awarded on a firm fixed-price basis, the primary government interest is receiving the specified equipment on time and to standard. Performance data, such as on-time delivery rates, defect rates, and successful integration testing, would be crucial for assessing value. Without access to contract performance reports or award fee determinations (if applicable), it's challenging to evaluate Rockwell Collins Inc.'s performance. However, the lack of competition might imply less pressure to exceed basic performance requirements.
What is the potential risk associated with a firm fixed-price, sole-source contract for specialized defense equipment?
A firm fixed-price (FFP) contract, especially when awarded sole-source, presents several risks. The primary risk for the government is paying a potentially inflated price because competition was absent, limiting price discovery. With FFP, the contractor is incentivized to control costs, but if costs exceed estimates, the contractor still receives the agreed-upon price, meaning the government bears the financial risk of cost overruns. For sole-source, the risk is compounded as the government lacks leverage to negotiate the best price. Furthermore, if the contractor faces unforeseen technical challenges or delays, the government might be locked into a contract that becomes less advantageous or fails to meet evolving needs without costly renegotiations.
Are there any indications of cost creep or contract modifications that suggest the initial $18.86 million estimate was inaccurate?
The provided data indicates a single award amount of $18,859,203.12 with a defined start and end date, suggesting the initial estimate has been established as the total award value. There is no immediate data presented on contract modifications or cost creep. However, the nature of sole-source contracts can sometimes mask inefficiencies or lead to less rigorous initial cost estimations compared to competitive bids. A deeper dive into contract modification history, if available, would be necessary to definitively rule out cost creep. For now, the award stands as the total obligated amount.
Industry Classification
NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp (UEI: 001344142)
Address: 3530 BRANSCOMBE RD, FAIRFIELD, CA, 08
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: $18,859,203
Exercised Options: $18,859,203
Current Obligation: $18,859,203
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2010-09-30
Current End Date: 2013-07-10
Potential End Date: 2013-07-10 00:00:00
Last Modified: 2013-11-25
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