DoD's $25.2M helicopter component contract awarded to PCX Aerostructures shows fair value despite limited competition

Contract Overview

Contract Amount: $25,251,089 ($25.3M)

Contractor: PCX Aerostructures, LLC

Awarding Agency: Department of Defense

Start Date: 2019-04-03

End Date: 2020-12-30

Contract Duration: 637 days

Daily Burn Rate: $39.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HELICOPTER ROTOR BLADES, DRIVE MECHANISMS AND COMPONENTS

Place of Performance

Location: NEWINGTON, HARTFORD County, CONNECTICUT, 06111

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $25.3 million to PCX AEROSTRUCTURES, LLC for work described as: HELICOPTER ROTOR BLADES, DRIVE MECHANISMS AND COMPONENTS Key points: 1. Contract value of $25.2M for helicopter rotor blades and drive mechanisms. 2. Awarded to PCX Aerostructures, LLC, a single supplier for these specific components. 3. Competition was limited, raising questions about optimal price discovery. 4. The contract duration was 637 days, indicating a medium-term supply need. 5. This falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code. 6. The contract type was Firm Fixed Price, shifting risk to the contractor. 7. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: fair

The contract's value of $25.2 million for helicopter rotor blades and drive mechanisms appears within a reasonable range for specialized aerospace components. Benchmarking against similar contracts is challenging due to the specific nature of the parts. However, the firm fixed-price structure suggests that the government secured a predictable cost, though the limited competition might have prevented further price reductions. The total award amount of $25.2M for a 637-day period suggests a moderate annual spend for these critical parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the process was intended to be competitive, specific circumstances led to the exclusion of some potential bidders. This suggests that only a limited number of qualified sources were able to meet the stringent requirements or that the exclusion was based on specific technical or security needs. The limited number of bidders likely resulted in less aggressive pricing than a fully open competition with multiple strong contenders.

Taxpayer Impact: The limited competition means taxpayers may not have received the lowest possible price for these essential helicopter components, as the bidding pool was restricted.

Public Impact

The Department of Defense benefits from the supply of critical helicopter rotor blades and drive mechanisms. This contract ensures the operational readiness of military aircraft. The services delivered are specialized manufacturing and component supply. The geographic impact is primarily tied to the contractor's facilities, likely in Connecticut. Workforce implications include skilled manufacturing jobs at the contractor's site.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have led to higher costs for taxpayers.
Lack of broad competition could indicate potential supply chain vulnerabilities if the sole source faces issues.
The specific nature of 'exclusion of sources' warrants further investigation into the reasons for limiting bidders.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Award to an established entity (PCX Aerostructures) suggests a degree of reliability in supply.
The contract addresses a critical need for aviation components within the Defense Logistics Agency.

Sector Analysis

This contract falls within the aerospace manufacturing sector, specifically focusing on aircraft parts. The market for specialized helicopter components is often characterized by high barriers to entry due to technical expertise, certifications, and capital investment. Spending in this area is driven by military readiness requirements and the lifecycle maintenance of aircraft fleets. Comparable spending benchmarks are difficult to establish without detailed knowledge of specific helicopter models and component complexities, but the $25.2M award for a nearly two-year period suggests a significant but not exceptionally large contract within the defense aerospace supply chain.

Small Business Impact

This contract did not include a small business set-aside, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests no specific small business subcontracting goals were mandated within this award. This means that opportunities for small businesses to participate in fulfilling this contract were not explicitly prioritized through set-aside provisions or subcontracting requirements, potentially limiting their direct involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations, managed by the Defense Logistics Agency (DLA). Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally maintained through contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Defense Logistics Agency Aviation Support
Helicopter Maintenance and Repair Contracts
Aerospace Component Manufacturing Contracts

Risk Flags

Limited Competition
Potential for Higher Costs
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.3 million to PCX AEROSTRUCTURES, LLC. HELICOPTER ROTOR BLADES, DRIVE MECHANISMS AND COMPONENTS

Who is the contractor on this award?

The obligated recipient is PCX AEROSTRUCTURES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.3 million.

What is the period of performance?

Start: 2019-04-03. End: 2020-12-30.

What is the track record of PCX Aerostructures, LLC with the Department of Defense?

PCX Aerostructures, LLC has a history of receiving contracts from the Department of Defense, primarily through the Defense Logistics Agency. While this specific $25.2 million award for helicopter components is significant, their broader portfolio likely includes various aircraft parts and structures. Analyzing their past performance, including on-time delivery rates, quality compliance, and any past disputes or contract modifications, would provide a clearer picture of their reliability. Information from contract databases and performance assessment reports (if publicly available) would be crucial for a comprehensive evaluation of their track record with the DoD.

How does the $25.2M award compare to similar helicopter component contracts?

Direct comparison of the $25.2 million award for helicopter rotor blades and drive mechanisms is challenging without knowing the specific helicopter models and the exact technical specifications of the components. However, for specialized, high-value aerospace parts, this figure represents a substantial, multi-year commitment. Contracts for similar complex components can range from a few million to tens or even hundreds of millions of dollars, depending on the criticality, volume, and technological sophistication. The 637-day duration suggests a moderate scale, implying that this award covers a significant but not exhaustive portion of the DoD's needs for these parts over that period.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential supply chain disruptions if PCX Aerostructures, LLC faces production issues, given the limited competition. The 'full and open competition after exclusion of sources' designation suggests a potential risk that the limited bidding pool may have resulted in a higher-than-optimal price for taxpayers. Furthermore, reliance on a single source for critical components, even if qualified, inherently carries a risk of dependency. Ensuring robust quality control and timely delivery under the firm fixed-price agreement is also a key risk area that requires diligent oversight.

How effective is the firm fixed-price (FFP) contract type in managing costs for these components?

The Firm Fixed Price (FFP) contract type is generally effective in managing costs for well-defined procurements like specialized aircraft components, as it shifts the risk of cost overruns to the contractor. This provides the government with cost certainty, making budgeting more predictable. For PCX Aerostructures, LLC, the FFP structure incentivizes efficient production and cost control to maximize profit margins. However, the effectiveness is contingent on the initial price negotiation; if the price was set too high due to limited competition, the FFP structure would lock in that higher cost. Robust technical specifications and oversight are crucial to ensure the contractor meets quality standards without compromising the cost benefits.

What are the historical spending patterns for helicopter rotor blades and drive mechanisms by the DoD?

Historical spending patterns for helicopter rotor blades and drive mechanisms by the DoD are substantial and ongoing, reflecting the continuous need to maintain and operate a large fleet of rotary-wing aircraft. Annual spending can fluctuate based on fleet modernization programs, operational tempo, and depot maintenance cycles. While the $25.2 million awarded to PCX Aerostructures is a specific instance, the DoD collectively spends billions annually on aviation parts, maintenance, and repair. Analyzing aggregated spending data across similar NAICS codes (like 336413) and contract types over several fiscal years would reveal trends in demand, pricing, and key suppliers within this segment of the defense industrial base.

What does the 'exclusion of sources' designation imply for competition and pricing?

The 'full and open competition after exclusion of sources' designation implies that the initial solicitation was intended to be open to all responsible sources, but specific criteria or circumstances led to the exclusion of certain potential bidders. This could be due to unique technical requirements, security clearances, proprietary technology, or specific past performance issues. Consequently, the competition pool is narrowed, which typically leads to fewer bids and potentially less aggressive pricing compared to a truly open competition. For taxpayers, this means the government might not achieve the lowest possible price, as the reduced number of bidders limits the pressure to offer the most competitive rates.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: PCX Aerostructures LLC (UEI: 146254474)

Address: 300 FENN RD, NEWINGTON, CT, 06111

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

Financial Breakdown

Contract Ceiling: $25,251,089

Exercised Options: $25,251,089

Current Obligation: $25,251,089

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPRRA117D0291

IDV Type: IDC

Timeline