DoD's $231.6M contract for aircraft equipment manufacturing services awarded to MTC Technologies Inc. shows fair value

Contract Overview

Contract Amount: $23,163,120 ($23.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2005-08-08

End Date: 2010-09-30

Contract Duration: 1,879 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200511!000291!5700!FA8232!OO-ALC/PKGE/LGKE !F0960301D0209 !A!N! !N!QP37 ! !20050808!20051231!122525991!122525991!110341133!N!MTC TECHNOLOGIES INC !4032 LINDEN AVE !DAYTON !OH!45432!21000!113!39!DAYTON !MONTGOMERY !OHIO !+000000900000!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !541330!E! !5!B!M! !A! !20200930!B! ! !A! !A!N!J!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200511!000291!5700!FA8232!OO-ALC/PKGE/LGKE !F0960301D0209 !A!N! !N!QP37 ! !20050808!20051231!122525991!122525991!110341133!N!MTC TECHNOLOGIES INC !4032 LINDEN AVE !DAYTON !OH!45432!21000!113!39!DAYTON !MONT… Key points: 1. The contract's value of $231.6 million over its 5-year period suggests a significant investment in specialized aircraft equipment manufacturing. 2. Competition dynamics indicate a full and open competition, which typically fosters better pricing and value for the government. 3. The contract's firm-fixed-price nature shifts performance risk to the contractor, aligning incentives for cost control. 4. The duration of the contract (1,879 days) allows for sustained support and potential for economies of scale. 5. The primary service category is 'Other Aircraft Equipment,' indicating a focus on specialized components rather than complete aircraft. 6. The contract was awarded to MTC Technologies Inc., a company with a track record in defense contracting.

Value Assessment

Rating: good

The contract's total value of $231.6 million over approximately five years averages to about $46.3 million annually. While a direct per-contract comparison is difficult without more specific service details, this level of spending is substantial for specialized aircraft equipment manufacturing. The firm-fixed-price (FFP) contract type suggests that the government has negotiated a set price, implying a degree of confidence in the contractor's ability to deliver within that budget. Benchmarking against similar large-scale defense manufacturing contracts would be necessary for a more precise value assessment, but the FFP structure is a positive indicator for cost predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit bids. The data indicates there were two bids received. A full and open competition generally leads to a wider range of proposals and potentially more competitive pricing as contractors vie for the award. The presence of multiple bidders suggests a healthy market for these specialized services, which is beneficial for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A full and open competition with multiple bidders typically results in better value for taxpayers by driving down prices through market forces. This ensures that government funds are used efficiently and effectively.

Public Impact

The primary beneficiary is the Department of Defense, which receives critical aircraft equipment manufacturing services. The services delivered are essential for maintaining and enhancing the capabilities of military aircraft. The geographic impact is likely concentrated around the contractor's facilities and potentially military bases where the equipment is deployed. Workforce implications include job creation and skill development within the aerospace and manufacturing sectors at MTC Technologies Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial estimates were inaccurate, despite the FFP structure.
Dependence on a single contractor for a critical component could pose supply chain risks.
Ensuring consistent quality and adherence to stringent military specifications requires robust oversight.

Positive Signals

The firm-fixed-price contract type incentivizes contractor efficiency and cost control.
Full and open competition suggests a competitive environment that should yield favorable pricing.
The contract duration allows for long-term planning and potential for relationship building with the supplier.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high barriers to entry, complex supply chains, and stringent quality requirements. This contract falls within the 'Aircraft Manufacturing' sub-sector, specifically focusing on 'Other Aircraft Equipment.' The total federal spending in this broad category can be in the billions annually, reflecting the critical role of these components in national defense. This contract represents a significant, albeit specific, portion of that spending, likely supporting a particular platform or set of aircraft within the DoD's inventory.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and the contractor, MTC Technologies Inc., is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within this specific award. Therefore, the direct impact on the small business ecosystem from this particular contract appears limited, though larger prime contractors often engage small businesses in their broader supply chains.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance, quality, and compliance with contract terms. Accountability measures are embedded in the firm-fixed-price structure, which places financial responsibility on the contractor. Transparency is facilitated through contract databases like FPDS, although detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Aerospace Research and Development
Defense Logistics and Support Services
Military Aircraft Procurement

Risk Flags

Potential for cost growth if scope changes significantly.
Supply chain vulnerability if contractor faces production issues.
Quality assurance critical for defense applications.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200511!000291!5700!FA8232!OO-ALC/PKGE/LGKE !F0960301D0209 !A!N! !N!QP37 ! !20050808!20051231!122525991!122525991!110341133!N!MTC TECHNOLOGIES INC !4032 LINDEN AVE !DAYTON !OH!45432!21000!113!39!DAYTON !MONTGOMERY !OHIO !+000000900000!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !541330!E! !5!B!M! !A! !202

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.2 million.

What is the period of performance?

Start: 2005-08-08. End: 2010-09-30.

What is the track record of MTC Technologies Inc. with the Department of Defense?

MTC Technologies Inc. has a history of receiving contracts from the Department of Defense. While this specific contract is for a substantial amount ($231.6 million), a comprehensive review would involve examining their past performance on similar contracts, including on-time delivery, quality adherence, and any history of disputes or contract modifications. Their presence in the defense sector suggests experience with the rigorous requirements and compliance standards expected by the DoD. Further analysis of their contract history, including award values, contract types, and performance reviews, would provide a clearer picture of their reliability and capabilities as a DoD supplier.

How does the value of this contract compare to similar aircraft equipment manufacturing contracts?

The $231.6 million value over approximately five years places this contract in the category of significant, large-scale procurements for specialized aircraft equipment. Annualized, it represents roughly $46.3 million. Comparing this to similar contracts requires access to a broader dataset of aircraft equipment manufacturing awards, considering factors like the specific type of equipment, complexity, and duration. However, for a firm-fixed-price contract of this magnitude within the defense sector, it suggests a substantial commitment by the DoD. Without direct comparative data on unit costs or specific equipment types, it's challenging to definitively benchmark value, but the FFP structure and competitive award are positive indicators.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract, despite the firm-fixed-price structure, include potential quality issues if not rigorously monitored, and supply chain disruptions if MTC Technologies Inc. faces challenges in its own sourcing or production. While the FFP shifts cost risk to the contractor, the government still bears the risk of non-performance or substandard delivery, which could impact operational readiness. Dependence on a single contractor for critical components can also be a risk. Ensuring robust quality assurance and contingency planning for supply chain continuity are key mitigation strategies.

How effective is the firm-fixed-price (FFP) contract type in managing costs for this type of service?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks are understood. For aircraft equipment manufacturing, where specifications can be precise, FFP incentivizes the contractor to control costs and improve efficiency to maximize profit. It provides cost certainty for the government, as the price is fixed regardless of the contractor's actual costs. However, it requires careful upfront negotiation to ensure the price is fair and reflects realistic cost expectations. If the scope changes significantly, contract modifications can become necessary, potentially increasing the overall cost.

What are the historical spending patterns for aircraft equipment manufacturing within the DoD?

Historical spending patterns for aircraft equipment manufacturing within the DoD are substantial, often running into tens of billions of dollars annually across various contracts. This spending is driven by the need to maintain and modernize a vast fleet of aircraft, requiring a continuous supply of components, upgrades, and specialized equipment. Spending fluctuates based on defense budgets, strategic priorities, and the lifecycle of different aircraft platforms. Contracts like this one, for specific equipment, contribute to the overall aggregate spending, reflecting ongoing investment in aerospace capabilities.

What is the significance of the 'Other Aircraft Equipment' PSC code in relation to the contract value?

The Product Service Code (PSC) 'R414' (Other Aircraft Equipment) signifies that the contract is for specialized equipment that doesn't fall into more specific categories like engines, airframes, or avionics. The contract value of $231.6 million suggests that these 'other' equipment categories encompass a significant portion of the DoD's spending needs, potentially including unique or custom-designed components, ground support equipment, or specialized systems critical for aircraft operation or maintenance. This highlights the breadth of the defense industrial base and the diverse range of components required to support military aviation.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 520 GAITHER RD, ROCKVILLE, MD, 20850

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F0960301D0209

IDV Type: IDC

Timeline