Naval Air Warfare Center Awards $49K Contract for Aircraft Maintenance Equipment to Testek Inc
Contract Overview
Contract Amount: $20,670,698 ($20.7M)
Contractor: Testek LLC
Awarding Agency: Department of Defense
Start Date: 1998-04-28
End Date: 2007-10-31
Contract Duration: 3,473 days
Daily Burn Rate: $6.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 199808!1700!8455!A8050!NAVAL AIR WARFARE CENTER, AIRCRA!N6833598C0216 !A!*!* !19980428!20000428!050624279!050624279!050624279!N!06659!TESTEK INC !12271 GLOBE ST !LIVONIA !MI!48150!49000!163!26!LIVONIA !WAYNE !MICHIGAN !0001!+000000939508!N!N!000000000000!4920!ACFT MAINT & REPAIR SHOP SPECILIZED EQUIP !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !3812!3!*!*!*!B!A!*!A !N!J!2!004!B!* !A!N!A!* !* !N!B!*!Z!*!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!
Place of Performance
Location: LIVONIA, WAYNE County, MICHIGAN, 48150
State: Michigan Government Spending
Plain-Language Summary
Department of Defense obligated $20.7 million to TESTEK LLC for work described as: 199808!1700!8455!A8050!NAVAL AIR WARFARE CENTER, AIRCRA!N6833598C0216 !A!*!* !19980428!20000428!050624279!050624279!050624279!N!06659!TESTEK INC !12271 GLOBE ST !LIVONIA !MI!48150!49000!163!26!LIVONIA !WAYNE … Key points: 1. Contract awarded for specialized aircraft maintenance equipment. 2. Testek Inc. secured the contract, with a base value of $49,000. 3. The contract was awarded under full and open competition. 4. The duration of the contract was approximately 9.5 years, significantly longer than the initial period. 5. The final value of the contract was over $20 million, a substantial increase from the base amount.
Value Assessment
Rating: concerning
The initial award of $49,000 for specialized equipment seems low. However, the contract's final value ballooned to over $20 million, indicating significant scope creep or underestimation. This warrants scrutiny regarding initial pricing and subsequent modifications.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, suggesting a competitive bidding process. However, the massive increase in contract value over its lifespan raises questions about the effectiveness of price discovery and oversight during modifications.
Taxpayer Impact: The significant increase in contract value from $49,000 to over $20 million represents a substantial expenditure of taxpayer funds, necessitating a thorough review of the contract's justification and performance.
Public Impact
Taxpayers may have overpaid due to the dramatic increase in contract value over nearly a decade. The extended duration and cost escalation could indicate potential inefficiencies in contract management or unforeseen requirements. The significant difference between the initial award and final cost raises concerns about the initial bidding process and subsequent contract modifications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Significant cost growth from initial award to final value.
- Extended contract duration (over 9 years) for specialized equipment.
- Potential for underbidding or scope creep.
- Lack of detailed information on contract modifications.
Positive Signals
- Awarded under full and open competition.
- Contractor has experience in aircraft maintenance equipment.
Sector Analysis
This contract falls within the Defense sector, specifically for aircraft maintenance and repair specialized equipment. Spending in this area is critical for military readiness, but subject to rigorous oversight due to high costs and technological complexity.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to assess small business participation.
Oversight & Accountability
The significant escalation in contract value from the initial award to its final expenditure suggests potential weaknesses in oversight and accountability. A detailed review of contract modifications and performance is warranted.
Related Government Programs
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Significant cost growth.
- Extended contract duration.
- Potential for scope creep.
- Lack of transparency in final cost justification.
- Questionable value for money given initial award.
Tags
department-of-defense, mi, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.7 million to TESTEK LLC. 199808!1700!8455!A8050!NAVAL AIR WARFARE CENTER, AIRCRA!N6833598C0216 !A!*!* !19980428!20000428!050624279!050624279!050624279!N!06659!TESTEK INC !12271 GLOBE ST !LIVONIA !MI!48150!49000!163!26!LIVONIA !WAYNE !MICHIGAN !0001!+000000939508!N!N!000000000000!4920!ACFT MAINT & REPAIR SHOP SPECILIZED EQUIP !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !3812!3!*!*!*!B!A!*!A !N!J!2!0
Who is the contractor on this award?
The obligated recipient is TESTEK LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $20.7 million.
What is the period of performance?
Start: 1998-04-28. End: 2007-10-31.
What factors contributed to the contract value increasing from $49,000 to over $20 million?
The substantial increase likely stems from a combination of factors including unforeseen technical requirements, scope creep, multiple contract modifications, and potentially inflation over the contract's extended lifespan of nearly 10 years. Detailed contract modification records would be necessary to pinpoint the exact drivers of this cost escalation.
Was the final price paid for the equipment and services justified given the initial competitive bid?
Given the nearly 400-fold increase in contract value, it is questionable whether the final price was fully justified by the initial competitive bid. While scope changes can occur, such a dramatic escalation necessitates a thorough review of the necessity and reasonableness of each modification and the overall value delivered.
How effectively did the Department of the Navy manage this contract to ensure optimal value for taxpayer funds?
The management effectiveness is questionable due to the extreme cost growth. While the initial award was competitive, the prolonged duration and massive increase in expenditure suggest potential lapses in oversight, change management, or initial requirement definition, impacting the overall value realized by the taxpayer.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 12271 GLOBE ST, LIVONIA, MI, 12
Business Categories: Category Business, Small Business
Contract Characteristics
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 1998-04-28
Current End Date: 2007-10-31
Potential End Date: 2007-10-31 00:00:00
Last Modified: 2010-01-07
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