DoD's $44.2M parachute contract awarded to PARANETICS TECHNOLOGY, INC. shows fair value with 5 bidders

Contract Overview

Contract Amount: $44,207,400 ($44.2M)

Contractor: Paranetics Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-06-03

End Date: 2012-01-03

Contract Duration: 214 days

Daily Burn Rate: $206.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 4518037045!PARACHUTE,LOW-VELOC

Place of Performance

Location: SAN LUIS, YUMA County, ARIZONA, 85349

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $44.2 million to PARANETICS TECHNOLOGY, INC. for work described as: 4518037045!PARACHUTE,LOW-VELOC Key points: 1. The contract's value appears reasonable given the scope and duration. 2. Strong competition with 5 bidders suggests a healthy market for these specialized goods. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of 214 days is standard for this type of procurement. 5. This contract falls within the Defense Logistics Agency's broader textile and apparel procurement portfolio. 6. The award to a single contractor indicates successful price discovery through competition.

Value Assessment

Rating: good

The contract's total value of $44.2 million for 214 days of performance appears to be within a reasonable range for specialized parachute systems. Benchmarking against similar DoD procurements for similar quantities and specifications would provide a more precise value-for-money assessment. However, the presence of 5 bidders in a full and open competition suggests that the pricing was competitive and likely reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The fact that five distinct bidders submitted proposals suggests a robust competitive environment for this type of specialized equipment. This level of competition is generally favorable for price discovery and ensures the government receives competitive pricing.

Taxpayer Impact: The strong competition means taxpayers benefited from a price that was likely driven down by multiple offers, ensuring efficient use of public funds.

Public Impact

The primary beneficiaries are U.S. military personnel who will receive essential parachute equipment. The contract delivers critical low-velocity parachute systems necessary for various operational deployments. The contract's geographic impact is primarily within the United States, supporting domestic manufacturing and supply chains. This contract supports specialized manufacturing jobs within the textile and defense sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if PARANETICS TECHNOLOGY, INC. faces production issues.
Reliance on a single contractor for a critical defense item could pose a long-term risk if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm fixed-price contract structure limits government financial risk.
Contract awarded to a single entity suggests successful negotiation and selection.
The contract duration is clearly defined, allowing for focused execution.

Sector Analysis

This contract falls within the broader defense logistics and specialized textile manufacturing sector. The market for military-grade parachutes is niche, often characterized by stringent quality requirements and specialized production capabilities. Spending in this area is driven by the ongoing need for reliable safety and deployment equipment for various military branches. Comparable spending benchmarks would typically be found within DLA's historical awards for similar textile products and safety equipment.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless PARANETICS TECHNOLOGY, INC. voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA), which is responsible for ensuring contract compliance and performance. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified goods within the agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available.

Related Government Programs

Defense Logistics Agency Procurement
Military Parachute Systems
Textile and Apparel Manufacturing Contracts
Department of Defense Supply Chain Management

Risk Flags

Potential for supply chain vulnerabilities.
Reliance on a single contractor for critical equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.2 million to PARANETICS TECHNOLOGY, INC.. 4518037045!PARACHUTE,LOW-VELOC

Who is the contractor on this award?

The obligated recipient is PARANETICS TECHNOLOGY, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $44.2 million.

What is the period of performance?

Start: 2011-06-03. End: 2012-01-03.

What is the track record of PARANETICS TECHNOLOGY, INC. with government contracts, particularly within the Department of Defense?

A review of federal procurement data indicates that PARANETICS TECHNOLOGY, INC. has a history of receiving contracts, primarily from the Department of Defense. While this specific contract for parachute systems is a significant award, further analysis would be needed to assess the contractor's overall performance history, including on-time delivery rates, quality compliance, and any past performance issues or disputes on previous contracts. Understanding their broader contract portfolio and success rate provides context for their capability to fulfill this current requirement effectively and reliably.

How does the awarded price of $44.2 million compare to similar parachute system procurements by the DoD or other federal agencies?

Without specific details on the exact specifications, quantity, and performance requirements of the parachute systems procured under this $44.2 million contract, a direct price comparison is challenging. However, the presence of five bidders in a full and open competition suggests that the price achieved was likely competitive. To conduct a thorough benchmark, one would need to identify comparable contracts for similar low-velocity parachute systems, analyze their total values, unit costs, and contract durations, and then adjust for inflation and any significant differences in technical requirements or delivery timelines. This would help determine if the $44.2 million represents excellent, good, fair, or questionable value.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential supply chain disruptions affecting PARANETICS TECHNOLOGY, INC.'s ability to deliver on time, quality control issues with the specialized parachute systems, and the possibility of contractor performance degradation over the contract period. Mitigation strategies are inherent in the contract structure: the firm fixed-price nature limits financial risk to the government, and the competition itself suggests a capable contractor was selected. The Defense Logistics Agency (DLA) would also likely have quality assurance personnel and performance monitoring in place to identify and address issues early. Contingency planning for critical defense procurements often includes identifying alternative suppliers or maintaining strategic reserves.

How effective is the firm fixed-price contract type in ensuring value for money for this specific procurement?

The firm fixed-price (FFP) contract type is generally considered effective for procurements where the scope of work is well-defined and risks are manageable, such as the production of standardized parachute systems. FFP shifts the risk of cost overruns to the contractor, incentivizing them to manage costs efficiently and deliver the product at the agreed-upon price. This structure provides budget certainty for the government and encourages the contractor to focus on meeting specifications and delivery schedules. For this $44.2 million contract, FFP is likely to ensure that the government pays the negotiated price, contributing to value for money, provided the initial price was competitive and specifications were accurately defined.

What are the historical spending patterns for parachute systems by the Defense Logistics Agency or the Department of Defense?

Historical spending on parachute systems by the DLA and DoD typically fluctuates based on military readiness requirements, operational tempo, and modernization programs. While specific aggregate figures for parachute systems are not readily available without deep data dives, it's understood that these are critical safety and operational items. Spending is generally consistent, driven by the need to replace aging equipment, support new platforms, and maintain adequate stock levels for training and deployment. The DLA, as the primary logistics provider, manages a significant portion of this spending, often through competitive solicitations like the one awarded to PARANETICS TECHNOLOGY, INC., aiming for cost-effectiveness while ensuring high quality and reliability.

Industry Classification

NAICS: Manufacturing › Other Textile Product Mills › All Other Miscellaneous Textile Product Mills

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2301 N MAIN ST, SAN LUIS, AZ, 03

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Labor Surplus Area Firm, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $44,207,400

Exercised Options: $44,207,400

Current Obligation: $44,207,400

Contract Characteristics

Cost or Pricing Data: NO

Timeline