DoD's $22M contract for mechanical actuators awarded to Triumph Gear Systems Inc. raises value concerns

Contract Overview

Contract Amount: $21,996,615 ($22.0M)

Contractor: Triumph Gear Systems Inc

Awarding Agency: Department of Defense

Start Date: 2022-08-01

End Date: 2025-05-31

Contract Duration: 1,034 days

Daily Burn Rate: $21.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACTUATOR,MECHANICAL

Place of Performance

Location: PARK CITY, SUMMIT County, UTAH, 84098

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $22.0 million to TRIUMPH GEAR SYSTEMS INC for work described as: ACTUATOR,MECHANICAL Key points: 1. The contract's value appears high relative to the limited scope and duration. 2. Lack of competition suggests potential for inflated pricing and reduced value for taxpayer dollars. 3. The firm fixed-price contract type shifts risk to the government, especially with potential for cost overruns. 4. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a niche but critical area for defense. 5. The award is a delivery order under a larger contract, making direct comparison difficult without more context. 6. The contractor, Triumph Gear Systems Inc., has a track record that warrants further investigation for performance and pricing.

Value Assessment

Rating: questionable

The total award amount of $21,996,614.59 for mechanical actuators over approximately 34 months (August 2022 - May 2025) appears substantial. Without specific details on the quantity and technical specifications of the actuators, a direct per-unit cost comparison is challenging. However, given the 'NOT COMPETED' status, there is a significant risk that the pricing may not reflect competitive market rates. The firm fixed-price nature, while providing cost certainty, means the government bears the risk if the contractor's costs exceed estimates. Further analysis of historical pricing for similar components and the contractor's past performance would be necessary to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This significantly limits the opportunity for price discovery and potentially leads to higher costs for the government. The lack of a competitive bidding process means that taxpayers are not benefiting from the potential cost savings that could arise from multiple vendors vying for the contract. The justification for a sole-source award would need to be thoroughly reviewed to understand why competition was deemed impractical or impossible.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium for goods or services, as the government did not leverage competition to secure the best possible price.

Public Impact

The primary beneficiaries are the Department of the Navy, which will receive the mechanical actuators. These actuators are critical components for aircraft operations, ensuring the functionality and safety of military aviation assets. The geographic impact is primarily within Utah, where Triumph Gear Systems Inc. is located, potentially supporting local jobs and the regional economy. The contract supports specialized manufacturing roles within the aerospace and defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
The sole-source nature of the award limits transparency and accountability in the procurement process.
Firm fixed-price contracts can expose the government to financial risk if contractor costs escalate unexpectedly.
The specific technical requirements and quantity of actuators are not detailed, making independent value assessment difficult.
The duration of the contract (over 3 years) for a component delivery order warrants scrutiny regarding long-term necessity and potential for future sole-source awards.

Positive Signals

The contract is for a critical component (mechanical actuators) essential for defense operations.
The award is to an established company, Triumph Gear Systems Inc., which may possess specialized expertise.
The firm fixed-price contract structure provides cost certainty for the government, assuming the price is fair.
The delivery order is likely part of a larger, pre-existing contract vehicle, suggesting some level of prior vetting.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector (NAICS 336413) is a specialized segment of the aerospace industry focused on producing components for aircraft. This sector is characterized by high technical barriers to entry, stringent quality control requirements, and significant reliance on government contracts, particularly from the Department of Defense. Market size can be substantial, driven by military readiness and commercial aviation needs. Benchmarking spending in this area is challenging due to the proprietary nature of many components and the specialized expertise required. Contracts often involve complex engineering and manufacturing processes.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, Triumph Gear Systems Inc., is likely a large business. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary economic benefit will flow to the large prime contractor and its direct suppliers, with limited direct opportunities for small businesses unless they are already part of Triumph Gear Systems' established supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Inspector General's office for the Department of the Navy would have jurisdiction to investigate any allegations of fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award; however, contract award data is typically reported in federal procurement databases. Accountability measures would be tied to the performance clauses within the underlying contract vehicle and the specific delivery order.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Naval Aviation Support
Mechanical Components
Sole-Source Contracts

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Limited transparency in procurement
Firm fixed-price risk to government
Insufficient detail for value assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.0 million to TRIUMPH GEAR SYSTEMS INC. ACTUATOR,MECHANICAL

Who is the contractor on this award?

The obligated recipient is TRIUMPH GEAR SYSTEMS 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 $22.0 million.

What is the period of performance?

Start: 2022-08-01. End: 2025-05-31.

What is the specific technical nature and quantity of the 'ACTUATOR,MECHANICAL' being procured under this contract?

The provided data indicates the item is 'ACTUATOR,MECHANICAL' and the contract type is 'DELIVERY ORDER' under a larger contract. However, the specific technical specifications, performance requirements, and exact quantity of actuators are not detailed in the summary data. This information is crucial for understanding the scope of work, assessing the complexity of the requirement, and performing a meaningful cost-benefit analysis. Without these details, it is difficult to benchmark the price against similar procurements or determine if the $21.9 million award is justified based on the volume and technical sophistication of the actuators.

What is the justification for awarding this contract on a sole-source basis to Triumph Gear Systems Inc.?

The data explicitly states the contract was 'NOT COMPETED' (ct: NOT COMPETED), indicating a sole-source award. Federal procurement regulations typically require full and open competition unless specific exceptions apply, such as the existence of only one responsible source, urgent and compelling needs, or specific national security justifications. The justification for this sole-source award is not provided in the summary data. A thorough review of the contracting officer's justification and approval (J&A) document would be necessary to understand why competition was precluded and whether it aligns with regulatory requirements. Sole-source awards often lead to higher prices and reduced value for taxpayers.

How does the pricing of this contract compare to similar mechanical actuators procured by the Department of Defense or other government agencies?

Direct price comparison is challenging without detailed specifications and quantities for the actuators in this $21.9 million contract. The data indicates the contractor is TRIUMPH GEAR SYSTEMS INC and the agency is the Department of Defense (Navy). To benchmark effectively, one would need to identify comparable contracts for similar types and volumes of mechanical actuators, ideally awarded through competitive processes. Analyzing historical pricing data for Triumph Gear Systems Inc. on similar items, as well as data from other manufacturers in the aerospace component sector, would provide valuable context. The lack of competition for this specific award suggests that such a benchmark might reveal a price premium.

What is the track record of Triumph Gear Systems Inc. regarding performance, quality, and past pricing on government contracts?

Triumph Gear Systems Inc. is identified as the contractor. While the provided data does not include specific performance metrics or past pricing history for this entity, a comprehensive analysis would involve reviewing the Contractor Performance Assessment Reporting System (CPARS) for past contracts awarded to Triumph Gear Systems Inc. This system contains ratings on contractor performance, quality, timeliness, and cost control. Examining their history of delivering similar components, any past disputes or contract modifications, and their pricing trends on previous sole-source versus competitive awards would offer significant insight into their reliability and the potential value they offer.

What are the potential risks associated with this firm fixed-price contract, particularly given its sole-source nature?

The contract is a 'FIRM FIXED PRICE' (pt: FIRM FIXED PRICE) award. While this contract type generally shifts performance risk to the contractor, the sole-source nature introduces specific risks. If the fixed price was established without adequate market research or competitive pressure, it may be artificially inflated, meaning the government pays more than necessary. Furthermore, under a firm fixed-price contract, the contractor is incentivized to control costs, but if unforeseen technical challenges arise or the initial cost estimate was flawed, the contractor might seek modifications or face financial distress, potentially impacting delivery schedules or quality. The government bears the risk of paying a potentially non-competitive price.

How does this contract fit within the broader spending patterns for aircraft parts and auxiliary equipment within the Department of Defense?

The contract falls under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' Spending in this category is substantial within the Department of Defense, supporting the maintenance, repair, and upgrade of a vast military aircraft fleet. This specific $21.9 million award represents a portion of the overall defense budget allocated to sustainment and readiness. Analyzing historical spending trends for this NAICS code, particularly for the Department of the Navy, would reveal whether this contract amount is typical, unusually high, or low for the type of components procured. The sole-source nature, however, suggests it might be an outlier in terms of procurement method compared to potentially more competitively bid contracts.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038322RN428

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Triumph Group, Inc.

Address: 6125 SILVER CREEK DR, PARK CITY, UT, 84098

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: $21,996,615

Exercised Options: $21,996,615

Current Obligation: $21,996,615

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038322GS801

IDV Type: BOA

Timeline