DoD's $9.9M contract for aircraft parts awarded to PAR Government Systems Corporation without competition

Contract Overview

Contract Amount: $9,932,780 ($9.9M)

Contractor: PAR Government Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-04-19

End Date: 2012-09-30

Contract Duration: 1,991 days

Daily Burn Rate: $5.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: R2D2

Place of Performance

Location: ROME, ONEIDA County, NEW YORK, 13440

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $9.9 million to PAR GOVERNMENT SYSTEMS CORPORATION for work described as: R2D2 Key points: 1. The contract's value of nearly $10 million raises questions about potential overspending due to the lack of competitive bidding. 2. Awarding contracts without competition can limit market exploration and potentially lead to higher prices. 3. The duration of the contract, spanning over 1991 days, suggests a long-term need for these aircraft parts. 4. The 'Other Aircraft Parts' classification indicates a broad category, making specific performance benchmarks difficult to ascertain. 5. The absence of small business set-aside flags suggests this contract did not prioritize small business participation. 6. The contract type, Cost Plus Fixed Fee, can incentivize contractors to increase costs, requiring robust oversight.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar aircraft parts. The Cost Plus Fixed Fee structure, while common, carries inherent risks of cost escalation. Without competitive bids, it's difficult to definitively assess if the price reflects fair market value or if taxpayers received optimal value for their investment. Further analysis would require detailed cost breakdowns and comparisons to industry standards for similar components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, PAR Government Systems Corporation, was considered. This approach bypasses the standard competitive bidding process, which typically involves soliciting proposals from multiple interested parties. The lack of competition means there was no direct price comparison or incentive for vendors to offer their best pricing. This can limit the government's ability to secure the most cost-effective solution.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially leading to higher overall expenditure for the required parts.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially military personnel relying on the aircraft supported by these parts. The contract delivers essential aircraft parts, contributing to the operational readiness and maintenance of naval aviation assets. The geographic impact is primarily within New York, where PAR Government Systems Corporation is located, though the parts will be used by the Navy nationwide. Workforce implications include employment at PAR Government Systems Corporation and potentially its subcontractors, supporting specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for taxpayer money.
Cost Plus Fixed Fee contracts can incentivize cost overruns if not closely monitored.
The broad classification of 'Other Aircraft Parts' makes it difficult to assess specific performance and value.
Absence of small business participation may limit opportunities for smaller, innovative firms in the supply chain.

Positive Signals

The contract ensures the supply of critical aircraft parts, supporting military readiness.
PAR Government Systems Corporation's long-standing relationship (implied by contract duration) may indicate reliability and expertise.
The contract duration suggests a stable, long-term need, allowing for potential economies of scale if managed efficiently.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government procurement. This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, a segment that supports the broader defense industrial base. Spending in this area is crucial for maintaining military readiness. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of aircraft components and the sole-source award, but the overall defense procurement budget runs into hundreds of billions annually.

Small Business Impact

This contract does not appear to have included a small business set-aside. The absence of such provisions means that opportunities for small businesses to compete for or subcontract on this award were not explicitly prioritized. This could limit the integration of small businesses into the defense supply chain for these specific aircraft parts, potentially impacting the broader small business ecosystem within the aerospace manufacturing sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Given the Cost Plus Fixed Fee structure, rigorous oversight of incurred costs and adherence to the fixed fee is crucial. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Procurement
Naval Aviation Maintenance
Aircraft Parts Manufacturing
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.9 million to PAR GOVERNMENT SYSTEMS CORPORATION. R2D2

Who is the contractor on this award?

The obligated recipient is PAR GOVERNMENT SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $9.9 million.

What is the period of performance?

Start: 2007-04-19. End: 2012-09-30.

What is the track record of PAR Government Systems Corporation with the Department of Defense?

Information regarding PAR Government Systems Corporation's specific track record with the Department of Defense (DoD) for this particular contract (awarded in 2007) is limited based solely on the provided data. However, the contract's duration (1991 days) suggests a sustained relationship. To fully assess their track record, one would need to examine past performance reviews, any documented issues or successes on previous contracts, and their overall history of delivering on time and within budget for similar defense procurements. A deeper dive into contract databases and performance assessment reports would be necessary to provide a comprehensive evaluation of their reliability and quality of service to the DoD.

How does the $9.9 million value compare to similar sole-source contracts for aircraft parts?

Directly comparing the $9.9 million value of this sole-source contract to similar sole-source awards for aircraft parts is challenging without access to a comprehensive database of comparable contracts. Sole-source awards inherently lack the price discovery mechanism of competition, making value assessment difficult. To benchmark this value, one would need to identify contracts for identical or highly similar aircraft parts, awarded under sole-source conditions, within a similar timeframe, and to contractors with comparable capabilities. The 'Other Aircraft Parts' classification is broad, further complicating direct comparisons. Without such specific comparative data, it's difficult to definitively state whether $9.9 million represents a fair market price or an inflated one.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of $9.9 million are significant. Firstly, the lack of competition means the government likely paid a higher price than it would have in a competitive environment, representing a potential loss of taxpayer value. Secondly, without competitive pressure, the contractor may have less incentive to innovate or improve efficiency. Thirdly, there's a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future options and negotiation leverage. Finally, the Cost Plus Fixed Fee (CPFF) contract type, combined with sole-sourcing, increases the risk of cost overruns if the contractor's costs are not meticulously scrutinized and managed by the contracting agency.

How effective is the Cost Plus Fixed Fee (CPFF) contract type for procuring aircraft parts?

The Cost Plus Fixed Fee (CPFF) contract type can be effective for procuring complex or uncertain requirements, such as specialized aircraft parts where the final costs are difficult to estimate upfront. It provides the contractor with assurance of covering their costs plus a predetermined profit (the fixed fee), encouraging them to undertake challenging projects. However, its effectiveness is heavily reliant on robust government oversight. Without diligent monitoring of the contractor's costs and performance, CPFF contracts can incentivize cost escalation, as the contractor is reimbursed for costs incurred. For aircraft parts, if the scope is well-defined, a fixed-price contract might offer better value, but CPFF is often used when technical uncertainties are high.

What are the historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Navy?

Analyzing historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Navy requires access to comprehensive historical procurement data. The provided data point for this specific contract (awarded in 2007) is a single instance. To understand broader patterns, one would need to examine spending trends over several fiscal years, identify major contractors in this category, and observe fluctuations in demand and pricing. This would involve analyzing contract awards, total obligated amounts, and contract types within this NAICS code. Such an analysis could reveal whether spending has been consistent, increasing, or decreasing, and whether competitive or sole-source awards dominate the landscape for these types of parts.

What are the implications of the contract's duration (1991 days) on its overall value?

A contract duration of 1991 days (approximately 5.5 years) for aircraft parts suggests a long-term, stable requirement for these components. From a value perspective, a longer duration can sometimes lead to economies of scale, potentially lowering the per-unit cost if production volumes increase. It also provides the contractor with a predictable revenue stream, which might encourage investment in specialized tooling or processes. However, a lengthy contract also increases the risk of obsolescence if the aircraft technology evolves rapidly. Furthermore, it extends the period during which the government is committed to this specific supplier, potentially limiting flexibility to adapt to new technologies or more cost-effective solutions that may emerge during the contract's term.

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 FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 314 S JAY ST STE 1, ROME, NY, 21

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $9,932,780

Exercised Options: $9,932,780

Current Obligation: $9,932,780

Contract Characteristics

Cost or Pricing Data: YES

Timeline