DoD's $166M Aerojet Rocketdyne contract for Thrust Vector Control shows strong competition and R&D focus

Contract Overview

Contract Amount: $16,611,457 ($16.6M)

Contractor: Aerojet Rocketdyne, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-03-11

End Date: 2017-11-30

Contract Duration: 2,821 days

Daily Burn Rate: $5.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THRUST VECTOR CONTROL (TVC)

Place of Performance

Location: GAINESVILLE, PRINCE WILLIAM County, VIRGINIA, 20155

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $16.6 million to AEROJET ROCKETDYNE, INC. for work described as: THRUST VECTOR CONTROL (TVC) Key points: 1. Contract awarded through full and open competition, indicating a robust market. 2. Significant investment in Research and Development for critical aerospace components. 3. Aerojet Rocketdyne's established presence suggests a track record in specialized defense contracting. 4. Contract duration of over 2800 days points to a long-term strategic need. 5. The Cost Plus Fixed Fee structure allows for flexibility in R&D while managing contractor profit. 6. Virginia location may indicate a concentration of aerospace R&D and manufacturing capabilities.

Value Assessment

Rating: good

The contract value of $166 million for Thrust Vector Control (TVC) systems appears reasonable given the R&D nature and long duration. Benchmarking against similar complex aerospace R&D contracts is challenging due to the specialized technology involved. However, the use of a Cost Plus Fixed Fee (CPFF) structure is common for R&D where costs can be uncertain, aiming to balance contractor incentive with government oversight. The number of bidders (4) suggests a competitive environment that likely influenced pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four bidders participating. This indicates that the Department of the Navy actively sought proposals from all qualified sources, fostering a competitive environment. The presence of multiple bidders suggests that the market for Thrust Vector Control technology is not overly concentrated and that price discovery was likely effective, leading to potentially better value for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and encouraging innovation among a wider range of potential suppliers.

Public Impact

The primary beneficiaries are the Department of Defense and the Navy, receiving advanced TVC systems essential for missile and rocket propulsion. This contract supports the development and potential production of critical aerospace components, enhancing national security capabilities. The geographic impact is likely concentrated in Virginia, a hub for aerospace and defense contractors, potentially creating or sustaining high-skilled jobs. The contract fuels innovation in aerospace engineering and manufacturing, contributing to the technological advancement of the U.S. defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not closely monitored.
Long-term R&D contracts carry inherent risks of technological obsolescence or failure to meet performance requirements.
Dependence on a single contractor for critical components, even with initial competition, can pose supply chain risks.

Positive Signals

Awarded through full and open competition, ensuring a broad base of potential suppliers.
Aerojet Rocketdyne is a known entity in the aerospace propulsion sector, suggesting technical expertise.
The contract's focus on R&D indicates investment in future capabilities, crucial for maintaining technological superiority.
The CPFF structure, while requiring oversight, allows for necessary flexibility in research endeavors.

Sector Analysis

The aerospace and defense sector is characterized by high R&D investment, long product development cycles, and stringent performance requirements. Contracts for components like Thrust Vector Control (TVC) are vital for missile and space launch systems. The market involves specialized engineering expertise and significant capital investment. Spending in this area is often driven by national security imperatives and technological advancement goals. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of TVC systems, but R&D contracts of this magnitude are typical for advanced defense technologies.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. While Aerojet Rocketdyne, Inc. is a large business, the nature of this advanced R&D contract may limit direct subcontracting opportunities for small businesses unless they possess highly specialized capabilities. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, though specific details of R&D progress may be sensitive. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Space Launch Vehicle Development
Advanced Propulsion Systems Research
Naval Aviation Technology Development
Strategic Weapons Systems

Risk Flags

Potential NAICS Code Mismatch
R&D Contract Cost Overrun Risk
Technological Obsolescence Risk
Long-Term Program Relevance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.6 million to AEROJET ROCKETDYNE, INC.. THRUST VECTOR CONTROL (TVC)

Who is the contractor on this award?

The obligated recipient is AEROJET ROCKETDYNE, 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 $16.6 million.

What is the period of performance?

Start: 2010-03-11. End: 2017-11-30.

What is Aerojet Rocketdyne's track record with similar DoD contracts?

Aerojet Rocketdyne has a long history of developing and manufacturing rocket propulsion systems for various government agencies, including the Department of Defense and NASA. They have been involved in numerous high-profile programs, such as the RS-25 engines for the Space Shuttle and the Space Launch System, as well as propulsion for strategic and tactical missiles. Their track record generally indicates significant technical expertise in complex propulsion technologies. However, like many large defense contractors, they have also faced scrutiny regarding contract performance and pricing on specific projects. A detailed review of their past performance ratings and any contract disputes would provide a more comprehensive understanding of their reliability for this specific Thrust Vector Control (TVC) contract.

How does the $166 million value compare to similar R&D contracts for propulsion components?

The $166 million value for this Thrust Vector Control (TVC) R&D contract is substantial but not unusual for advanced aerospace components requiring extensive research and development. Contracts for complex systems like rocket engines, guidance systems, or specialized materials often run into tens or hundreds of millions of dollars, especially when spanning multiple years. The specific nature of TVC technology, which is critical for steering rockets and missiles, involves intricate engineering and rigorous testing. Benchmarking requires comparing it to contracts for similar developmental stages and technological complexity, considering factors like the number of bidders, contract type (e.g., CPFF, FFP), and duration. Given the full and open competition and the long duration (2821 days), this figure suggests a significant, long-term investment in developing or refining critical defense technology.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like this one for Thrust Vector Control (TVC) R&D, stem from the cost-reimbursement nature. While the 'fixed fee' component provides the contractor with a set profit margin, the 'cost plus' element means the government reimburses allowable costs incurred by the contractor. This can lead to potential cost overruns if the contractor's spending is not meticulously managed and justified. There's a risk that costs could escalate beyond initial estimates, requiring additional funding. Effective oversight, detailed cost tracking, and clear definition of allowable expenses are crucial to mitigate these risks. Additionally, the R&D nature itself carries inherent risks of technical challenges, delays, or the technology not meeting performance specifications, which can indirectly impact costs and timelines.

How effective is full and open competition in ensuring value for taxpayer money in specialized R&D?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money, even in specialized R&D. By allowing all responsible sources to submit proposals, it maximizes the pool of potential suppliers, fostering a competitive environment that drives innovation and encourages lower pricing. In the context of R&D for Thrust Vector Control (TVC), this means multiple firms can compete on technical approach, proposed cost, and past performance. This competition pressures bidders to offer their best value propositions. While specialized R&D can be complex to evaluate, a well-defined solicitation and robust evaluation process under full and open competition allow the government to select the most capable offeror at a fair and reasonable price, thereby maximizing the return on investment for taxpayer funds.

What are the implications of the contract's long duration (2821 days) for program effectiveness?

The long duration of 2821 days (approximately 7.7 years) for this Thrust Vector Control (TVC) R&D contract has several implications for program effectiveness. Firstly, it signifies a long-term commitment by the Department of Defense to developing or refining this critical technology, suggesting its strategic importance. Such extended timelines are common in R&D, allowing for thorough research, iterative design, prototyping, and extensive testing necessary for complex aerospace systems. However, a long duration also increases the risk of technological obsolescence if advancements occur rapidly elsewhere, or if the program's requirements shift due to evolving threats or strategic priorities. Effective program management, including regular reviews and potential contract modifications, is essential to ensure the program remains relevant and on track throughout its extended lifecycle.

How does the 'Research and Development in Biotechnology' NAICS code relate to Thrust Vector Control?

The provided NAICS code '541711 - Research and Development in Biotechnology' appears to be a mismatch for a contract focused on 'Thrust Vector Control (TVC)'. Thrust Vector Control is a critical component in rocket and missile systems, dealing with the mechanical and control systems that steer the vehicle by altering the direction of the engine's thrust. This falls squarely within the aerospace, defense, and mechanical engineering sectors. Biotechnology research and development, conversely, focuses on biological systems, organisms, or derivatives thereof, to make or modify products or processes. It is highly probable that the NAICS code listed is incorrect for this contract. A more appropriate NAICS code would likely be within the 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' category, or specific to aerospace product and parts manufacturing or R&D.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aerojet Rocketdyne Holdings, Inc. (UEI: 001316330)

Address: 5731 WELLINGTON RD, GAINESVILLE, VA, 20155

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: $16,611,457

Exercised Options: $16,611,457

Current Obligation: $16,611,457

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline