DoD's $17.3M CV-22 ACIG Contract with Textron Systems Faces Scrutiny Over Cost and Competition

Contract Overview

Contract Amount: $17,286,956 ($17.3M)

Contractor: Textron Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-03-27

End Date: 2013-09-30

Contract Duration: 2,379 days

Daily Burn Rate: $7.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FIRST ARTICLE TEST - EDM CV-22 ACIG

Place of Performance

Location: COCKEYSVILLE, BALTIMORE County, MARYLAND, 21030

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to TEXTRON SYSTEMS CORPORATION for work described as: FIRST ARTICLE TEST - EDM CV-22 ACIG Key points: 1. The contract awarded to Textron Systems Corporation for the CV-22 ACIG is a significant expenditure within the Defense sector. 2. Competition for this contract appears to have been full and open, which is a positive sign for price discovery. 3. However, the Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to cost overruns if not managed tightly. 4. The lack of small business participation is noted, suggesting potential missed opportunities for economic inclusion.

Value Assessment

Rating: fair

The $17.3 million contract value for the CV-22 ACIG is difficult to benchmark without specific details on the scope of work and the number of articles procured. The CPFF structure warrants careful monitoring to ensure costs remain reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically allows for the best pricing. However, the CPFF structure means the government bears the risk of cost increases, and the fixed fee may not adequately incentivize cost control.

Taxpayer Impact: While competition is positive, the CPFF structure and the duration of the contract (2379 days) mean taxpayers are exposed to potential cost escalations over a long period.

Public Impact

The CV-22 Osprey is a critical military aircraft, and its components directly impact operational readiness. This contract's performance could influence future procurement strategies for similar complex aerospace systems. Transparency in the cost breakdown and justification for the CPFF structure is important for public trust. The absence of small business involvement may limit broader economic benefits from this defense spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Long contract duration
No small business participation

Positive Signals

Full and open competition awarded
Established contractor

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the broader aerospace and defense industry. Spending in this area is often characterized by high R&D costs, specialized manufacturing, and long procurement cycles, with significant government oversight required.

Small Business Impact

The contract data indicates no small business participation (sb: false). This suggests that the prime contractor, Textron Systems Corporation, likely handled the entire scope of work or subcontracted to other large businesses, potentially missing opportunities to leverage small business innovation and economic contributions.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), indicating a level of oversight. However, the CPFF structure necessitates robust monitoring of costs and performance to ensure value for money and prevent potential overruns throughout the contract's extended duration.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Cost Plus Fixed Fee contract type may lead to cost overruns.
Long contract duration (2379 days) increases exposure to cost escalation.
No small business participation noted.
Lack of specific details on 'ACIG' makes precise value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to TEXTRON SYSTEMS CORPORATION. FIRST ARTICLE TEST - EDM CV-22 ACIG

Who is the contractor on this award?

The obligated recipient is TEXTRON SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2007-03-27. End: 2013-09-30.

What specific components or services did the CV-22 ACIG contract entail, and how does the $17.3 million price compare to the market value of similar aerospace components or manufacturing services?

The provided data lacks specifics on the exact nature of the 'CV-22 ACIG' components or services. Without this detail, a precise market value comparison is impossible. However, given the complexity of aerospace manufacturing and the CPFF structure, the $17.3 million could represent a reasonable cost for specialized parts or integration services, provided the scope was extensive and the contractor's costs were well-managed and justified.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this $17.3 million award, and what mitigation strategies were likely employed by the DoD?

The primary risk of a CPFF contract is that the contractor has less incentive to control costs, as the government bears the direct cost burden. The fixed fee provides a profit margin regardless of efficiency. Mitigation strategies likely included stringent cost accounting standards, detailed progress reviews, performance metrics, and potentially incentives for early completion or cost savings, though these are not explicitly detailed in the provided data.

How effective was the 'full and open competition' in ensuring the best possible price and value for the taxpayer, considering the contract's duration and CPFF structure?

Full and open competition is generally effective in driving down prices by fostering a competitive environment. However, the CPFF structure introduces a layer of complexity where the government assumes cost risk. While competition likely set a baseline, the long duration (2379 days) and CPFF nature mean that the ultimate cost-effectiveness hinges on rigorous government oversight and management to ensure the contractor remains efficient and costs are controlled throughout the contract lifecycle.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6833505R0063

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 124 INDUSTRY LN, HUNT VALLEY, MD, 21030

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,533,778

Exercised Options: $17,345,358

Current Obligation: $17,286,956

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline