DoD's $17.8M contract for aircraft parts manufacturing awarded to Mission Systems Davenport Inc. with no competition

Contract Overview

Contract Amount: $17,819,675 ($17.8M)

Contractor: Mission Systems Davenport Inc.

Awarding Agency: Department of Defense

Start Date: 2018-02-28

End Date: 2025-07-31

Contract Duration: 2,710 days

Daily Burn Rate: $6.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: OBOGS GGU-25 NON-RECURRING ENGINEERING (NRE) THROUGH PDR CLOSURE (PHASE I)

Place of Performance

Location: DAVENPORT, SCOTT County, IOWA, 52804

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $17.8 million to MISSION SYSTEMS DAVENPORT INC. for work described as: OBOGS GGU-25 NON-RECURRING ENGINEERING (NRE) THROUGH PDR CLOSURE (PHASE I) Key points: 1. Contract awarded on a cost-plus-incentive-fee basis, which can incentivize cost control but also carries inherent risk. 2. The contract duration of 2710 days (over 7 years) suggests a long-term need for these specialized aircraft parts. 3. Awarded as a Delivery Order, indicating it's part of a larger contract vehicle, though details of the parent contract are not provided. 4. The North American Industry Classification System (NAICS) code 336413 points to a specialized manufacturing sector for aircraft parts. 5. The contract's 'NOT COMPETED' status raises questions about potential alternatives and cost-effectiveness. 6. The contract is not set aside for small businesses, suggesting the scope or nature of the work may not be suitable for smaller enterprises.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without knowing the specifics of the 'NON-RECURRING ENGINEERING (NRE) THROUGH PDR CLOSURE (PHASE I)' requirements and the parent contract vehicle. The cost-plus-incentive-fee (CPIF) structure means the final cost is not fixed and can fluctuate based on performance and cost targets. Without competitive bids, it's difficult to assess if the pricing is fair market value. The long duration and specialized nature of the work might justify the cost, but the lack of competition prevents a robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating that a competitive bidding process was not utilized. This could be due to various reasons, such as the specialized nature of the required engineering services, existing proprietary technology, or a sole-source justification. The lack of competition means there were no other bidders to compare against, potentially limiting price discovery and the government's ability to secure the most cost-effective solution.

Taxpayer Impact: The absence of competition means taxpayers may not have benefited from the cost savings that typically arise from a competitive bidding process. This could lead to a higher overall expenditure for the required services.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially broader Department of Defense operations requiring specialized aircraft parts. The contract delivers non-recurring engineering services through Phase I PDR closure, crucial for the development and finalization of aircraft components. The geographic impact is centered in Davenport, Iowa, where Mission Systems Davenport Inc. is located, potentially supporting local employment and economic activity. Workforce implications include specialized engineering and manufacturing roles required to fulfill the contract's technical demands.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced incentive for cost efficiency.
The CPIF contract type introduces financial risk if cost targets are not met or if scope creep occurs.
Limited transparency due to the sole-source award makes it difficult to independently verify the value for money.
The long contract duration could lead to cost overruns if not managed diligently.

Positive Signals

Awarding to a specific contractor may leverage specialized expertise critical for the program's success.
The incentive fee structure, if well-defined, can align contractor and government interests towards achieving specific performance goals.
The contract addresses a specific phase (PDR closure) indicating a focused and potentially critical stage of development.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The NAICS code 336413 represents a niche market characterized by high technical barriers to entry and significant R&D investment. Spending in this sector is heavily influenced by defense budgets and technological advancements. Comparable spending benchmarks would typically involve other sole-source or competitively awarded contracts for similar NRE services or specialized component manufacturing within the DoD.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The nature of non-recurring engineering and specialized manufacturing for defense applications often requires large-scale facilities, advanced technological capabilities, and extensive experience, which may favor larger, established prime contractors. The absence of small business involvement suggests that the prime contractor is expected to handle the entirety of the work or that the specific requirements do not lend themselves to small business set-asides.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Cost Plus Incentive Fee (CPIF) structure, which ties contractor profit to performance against cost and schedule targets. Transparency is limited due to the sole-source nature of the award; however, contract modifications, performance reports, and payment milestones would likely be subject to internal government review and potentially audits by agencies like the Defense Contract Audit Agency (DCAA). Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Naval Aviation Systems Development
Aerospace Component Manufacturing Contracts
Non-Recurring Engineering Services

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.8 million to MISSION SYSTEMS DAVENPORT INC.. OBOGS GGU-25 NON-RECURRING ENGINEERING (NRE) THROUGH PDR CLOSURE (PHASE I)

Who is the contractor on this award?

The obligated recipient is MISSION SYSTEMS DAVENPORT 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 $17.8 million.

What is the period of performance?

Start: 2018-02-28. End: 2025-07-31.

What is the specific nature of the 'OBOGS GGU-25 NON-RECURRING ENGINEERING (NRE) THROUGH PDR CLOSURE (PHASE I)' and why was it deemed sole-source?

The 'OBOGS GGU-25 NON-RECURRING ENGINEERING (NRE) THROUGH PDR CLOSURE (PHASE I)' likely refers to the engineering work required to finalize the Preliminary Design Review (PDR) for a specific component, the GGU-25, related to an On-Board Oxygen Generation System (OBOGS). OBOGS are critical life support systems for aircrew. The sole-source award ('NOT COMPETED') suggests that Mission Systems Davenport Inc. may possess unique intellectual property, specialized manufacturing capabilities, or existing expertise directly related to this specific GGU-25 component that cannot be replicated by other firms. Alternatively, the urgency or specific technical requirements might have precluded a full and open competition, necessitating an award to the incumbent or sole provider to meet program timelines and technical specifications.

How does the Cost Plus Incentive Fee (CPIF) structure compare to other contract types for this kind of NRE work?

The Cost Plus Incentive Fee (CPIF) contract type is often used for research and development or complex engineering efforts where the final costs are uncertain. In a CPIF contract, the contractor is reimbursed for allowable costs and receives a target fee, but the final fee is adjusted based on performance against pre-determined targets (e.g., cost, schedule, performance metrics). This differs from Cost Plus Fixed Fee (CPFF), where the fee is fixed, or Firm-Fixed-Price (FFP), where the total price is fixed. For NRE work like this, CPIF aims to incentivize the contractor to control costs while achieving specific technical milestones. However, it carries more risk for the government than FFP, as the final cost is not capped, and requires robust oversight to ensure targets are realistic and achievable.

What are the potential risks associated with a 'NOT COMPETED' award for specialized aerospace components?

The primary risk of a 'NOT COMPETED' award is the potential for the government to pay a higher price than would be achieved through open competition. Without competing bids, there is less pressure on the contractor to offer the most cost-effective solution. Additionally, it can stifle innovation from other potential suppliers and may indicate a lack of market research or a failure to identify alternative sources. For specialized aerospace components, this could also mean missing out on advancements or efficiencies offered by other manufacturers. It necessitates strong government oversight to ensure the awarded contractor is performing efficiently and delivering value.

What is the historical spending pattern for Mission Systems Davenport Inc. with the Department of the Navy or DoD?

Detailed historical spending data for Mission Systems Davenport Inc. with the Department of the Navy or DoD would require access to comprehensive federal procurement databases. However, the award of this specific contract suggests a prior relationship or recognized capability. Without specific historical data, it's difficult to establish a pattern. A review of past contracts, contract types, and performance ratings would be necessary to assess their track record, identify any recurring issues, or confirm a history of successful delivery on similar defense contracts. This information is crucial for understanding their reliability and cost-effectiveness over time.

How does the duration of this contract (over 7 years) impact its risk profile?

The extended duration of this contract (2710 days, approximately 7.4 years) significantly impacts its risk profile. Long-term contracts increase the potential for cost escalation due to inflation, changes in material costs, or evolving labor rates. There's also a higher risk of scope creep, where requirements may change or expand over time, leading to cost overruns if not managed meticulously. Furthermore, the longer the contract, the greater the chance of technological obsolescence or the emergence of superior alternative solutions that the government might be locked out of due to the existing agreement. Effective program management, regular reviews, and strong contract modification controls are essential to mitigate these risks.

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

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 2734 HICKORY GROVE RD, DAVENPORT, IA, 52804

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $17,819,675

Exercised Options: $17,819,675

Current Obligation: $17,819,675

Subaward Activity

Number of Subawards: 46

Total Subaward Amount: $3,583,100

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042117G0006

IDV Type: BOA

Timeline