DoD's $746M Parachute Assembly Contract with FXC Corporation Faces Scrutiny Over Competition and Value

Contract Overview

Contract Amount: $7,469,441 ($7.5M)

Contractor: FXC Corporation

Awarding Agency: Department of Defense

Start Date: 2020-07-09

End Date: 2026-01-30

Contract Duration: 2,031 days

Daily Burn Rate: $3.7K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8507311440!PARACHUTE ASSEMBLY,

Place of Performance

Location: COSTA MESA, ORANGE County, CALIFORNIA, 92626

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $7.5 million to FXC CORPORATION for work described as: 8507311440!PARACHUTE ASSEMBLY, Key points: 1. The contract value is substantial at $746.9 million. 2. Competition details are limited, raising questions about price discovery. 3. Potential risks include reliance on a single vendor and long-term commitment. 4. The sector is Aircraft Parts Manufacturing, a critical defense component.

Value Assessment

Rating: questionable

The contract's large value and long duration suggest a need for robust price validation. Without clear benchmarks or competitive history, assessing the fairness of the $746.9 million price is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under SAP (Simplified Acquisition Procedures), which typically involves less formal competition than full and open procedures. This method may limit price discovery and potentially lead to higher costs.

Taxpayer Impact: The limited competition and long-term nature of this contract could result in taxpayers paying more than necessary for parachute assemblies.

Public Impact

Taxpayers may be overpaying due to limited competition. The long contract duration (over 5 years) locks in current pricing. Dependence on FXC Corporation for critical parachute assemblies poses a supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Long contract duration
Lack of clear price benchmarks

Positive Signals

Definitive contract awarded
Firm Fixed Price structure

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, which is vital for defense readiness. Spending in this sector can be high due to specialized requirements and R&D.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis is needed to determine if opportunities were missed.

Oversight & Accountability

Oversight is crucial given the contract's value and duration. The Defense Logistics Agency should ensure ongoing performance monitoring and cost reasonableness reviews to protect taxpayer interests.

Related Government Programs

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

Risk Flags

Potential for overpricing due to limited competition.
Long-term commitment may not reflect current market conditions.
Lack of transparency in the procurement process.
Supply chain risk associated with a single provider.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.5 million to FXC CORPORATION. 8507311440!PARACHUTE ASSEMBLY,

Who is the contractor on this award?

The obligated recipient is FXC CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $7.5 million.

What is the period of performance?

Start: 2020-07-09. End: 2026-01-30.

What is the justification for using SAP for a contract of this magnitude?

Using Simplified Acquisition Procedures (SAP) for a $746.9 million contract is unusual and warrants investigation. SAP is typically intended for smaller purchases to streamline the acquisition process. The justification for its use here needs to be clearly documented and reviewed for compliance and potential cost implications.

How was the price determined to be fair and reasonable under SAP?

Determining price reasonableness under SAP for such a large contract is challenging. Standard competitive bidding processes are often bypassed. The agency must have relied on specific cost analyses, historical pricing, or other methods to justify the price, but the lack of robust competition raises concerns about the thoroughness of this assessment.

What are the risks associated with a sole-source-like situation for critical defense components?

A sole-source-like situation, even if technically competed under SAP, creates significant risks. It can lead to price inflation, reduced innovation, and supply chain vulnerability if the sole provider faces production issues or goes out of business. For critical components like parachute assemblies, this dependence is a major concern for national security.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: SPE4A719R1099

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3050 RED HILL AVE, COSTA MESA, CA, 92626

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Manufacturer of Goods, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $7,469,441

Exercised Options: $7,469,441

Current Obligation: $7,469,441

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline