DoD's $24M contract for aircraft parts awarded to Intertrade Limited raises questions on competition and value

Contract Overview

Contract Amount: $23,954,307 ($24.0M)

Contractor: Intertrade Limited

Awarding Agency: Department of Defense

Start Date: 2025-09-26

End Date: 2034-06-30

Contract Duration: 3,199 days

Daily Burn Rate: $7.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DRIVE, CONSTANT SPEED

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $24.0 million to INTERTRADE LIMITED for work described as: DRIVE, CONSTANT SPEED Key points: 1. The contract's value of $23.95 million over a 9-year period warrants scrutiny for cost-effectiveness. 2. Awarded on a sole-source basis, the lack of competition may have inflated prices. 3. The long duration of the contract could indicate potential risks associated with market changes or technological obsolescence. 4. Performance context is limited, with no specific metrics provided for assessing the quality or timeliness of aircraft parts. 5. The contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a niche but critical area for defense readiness. 6. The absence of small business set-aside provisions means potential opportunities for smaller firms are not being leveraged.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the aircraft parts and their required specifications. However, a nearly $24 million award over nine years for 'Other Aircraft Parts' suggests a significant investment. Given the sole-source nature of the award, it is difficult to assess if the pricing is competitive or represents fair market value. Without comparable contracts or detailed cost breakdowns, it's hard to definitively determine value for money, leaning towards a questionable assessment due to the lack of competitive pressure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one bidder, Intertrade Limited, was considered. The specific reasons for this sole-source determination are not detailed in the provided data. A sole-source award inherently limits competition, which can lead to higher prices and reduced innovation compared to a fully competed contract. The absence of multiple bidders means there was no direct price comparison or market pressure to drive down costs.

Taxpayer Impact: Taxpayers may be paying a premium for these aircraft parts due to the lack of competitive bidding. The government did not benefit from the price discovery mechanisms that typically occur in a competitive procurement process.

Public Impact

The primary beneficiaries are the Department of Defense and potentially its operational readiness, through the supply of necessary aircraft parts. The contract ensures the continued availability of 'Other Aircraft Parts and Auxiliary Equipment' crucial for maintaining military aircraft fleets. The geographic impact is likely concentrated around military bases or maintenance facilities that utilize the supplied parts, with a national implication for defense logistics. The contract supports the workforce at Intertrade Limited and potentially its supply chain partners, contributing to employment in the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to overpayment.
Long contract duration (9 years) increases risk of price escalation and obsolescence.
Lack of performance metrics makes it difficult to assess contractor efficiency and effectiveness.
No small business participation noted, potentially missing opportunities for economic inclusion.

Positive Signals

Ensures a consistent supply of critical aircraft parts for defense operations.
The firm fixed price contract type provides cost certainty for the government.
The contract is with a single entity, potentially simplifying contract management.

Sector Analysis

This contract operates within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. This sector is characterized by high technological demands, stringent quality control, and significant government procurement. The market size for defense aerospace components is substantial, driven by the need to maintain aging fleets and develop new platforms. This contract fits within the broader defense logistics and sustainment spending, which is a critical component of the defense budget, often involving specialized suppliers.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that opportunities for small businesses to compete for or subcontract on this significant award were not explicitly pursued through set-aside provisions. Consequently, the potential economic benefits for the small business ecosystem, such as increased revenue, job creation, and capacity building, are not being realized through this specific contract mechanism. The absence of subcontracting requirements also limits the downstream impact on smaller suppliers.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including delivery schedules, quality standards, and payment clauses. Transparency is limited by the sole-source nature of the award and the lack of publicly available performance data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency Procurement
Aircraft Parts and Components
Sole-Source Defense Contracts
Long-Term Defense Sustainment Contracts
Aerospace Manufacturing

Risk Flags

Sole-source award
Long contract duration
Lack of performance metrics
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.0 million to INTERTRADE LIMITED. DRIVE, CONSTANT SPEED

Who is the contractor on this award?

The obligated recipient is INTERTRADE LIMITED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.0 million.

What is the period of performance?

Start: 2025-09-26. End: 2034-06-30.

What is the specific type of aircraft parts being procured under this contract, and what are their critical performance requirements?

The provided data classifies the procurement under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This broad category encompasses a wide range of components beyond engines and airframes, such as landing gear, electrical systems, hydraulic components, and various specialized hardware. Without further details, it is impossible to ascertain the specific parts. Critical performance requirements would typically include adherence to strict military specifications (Mil-Specs), durability under extreme conditions, precise tolerances, and reliability for flight safety. The lack of specificity in the data hinders a detailed analysis of the parts' criticality and associated performance benchmarks.

What justification was provided for awarding this contract on a sole-source basis to Intertrade Limited?

The data explicitly states the contract type as 'NOT COMPETED' and implies a sole-source award. However, the specific justification for this sole-source determination is not provided. Common justifications for sole-source contracts in defense procurement include the unique capability of a single contractor, urgent and compelling needs where competition is impractical, or when only one source is capable of meeting the requirements. Without access to the Justification and Approval (J&A) document typically associated with sole-source awards, it is impossible to verify the validity of the rationale and assess whether competitive alternatives were genuinely unavailable or if the sole-source path was chosen for other reasons.

How does the $23.95 million contract value compare to historical spending on similar aircraft parts by the Department of Defense?

Comparing this $23.95 million contract value to historical spending requires access to comprehensive historical procurement data for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of Defense, specifically from the Defense Logistics Agency or relevant branches. Without such data, a direct comparison is not feasible. However, the contract's duration of nearly 10 years (ending June 30, 2034) suggests a sustained need. If similar parts were procured competitively in the past, their average annual cost could provide a benchmark. A sole-source award over such a long period warrants careful review to ensure the cumulative cost remains reasonable relative to potential market prices if competition were available.

What are the potential risks associated with the long contract duration (over 9 years) for aircraft parts?

The extended duration of this contract, spanning from its start date (implied shortly after award) to June 30, 2034, presents several potential risks. Firstly, technological advancements in aircraft design and manufacturing could render the specified parts obsolete or less efficient over time, leading to the government procuring outdated technology. Secondly, market conditions for raw materials and manufacturing processes can fluctuate significantly over nearly a decade, potentially impacting the cost-effectiveness of the firm fixed price. Thirdly, the long-term commitment might disincentivize Intertrade Limited from seeking innovative or more cost-effective solutions if they are comfortable with the guaranteed revenue stream. Finally, unforeseen geopolitical events or changes in defense strategy could alter the demand for these specific parts.

Are there any performance metrics or key performance indicators (KPIs) defined within the contract to measure Intertrade Limited's delivery and quality?

The provided data does not include details on specific performance metrics or Key Performance Indicators (KPIs) for this contract. While the contract type is 'FIRM FIXED PRICE,' which generally implies adherence to specified deliverables, the absence of explicit KPIs makes it difficult to objectively assess the contractor's performance beyond basic delivery compliance. Effective contracts typically include metrics related to on-time delivery rates, defect rates, quality acceptance rates, and responsiveness to urgent requirements. Without these, the government's ability to proactively manage performance, identify potential issues early, and hold the contractor accountable for substandard service is significantly diminished.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRTA125R0200

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 400 COLLINS RD NE M/S 153-220, CEDAR RAPIDS, IA, 52498

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

Financial Breakdown

Contract Ceiling: $23,954,307

Exercised Options: $23,954,307

Current Obligation: $23,954,307

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline