Army awards $36.4M for Stinger flight motors, a sole-source contract with a 5-year duration

Contract Overview

Contract Amount: $36,401,837 ($36.4M)

Contractor: Aerojet Rocketdyne Inc

Awarding Agency: Department of Defense

Start Date: 2014-09-26

End Date: 2019-07-26

Contract Duration: 1,764 days

Daily Burn Rate: $20.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: STINGER FLIGHT MOTOR PRODUCTION CONTRACT

Place of Performance

Location: CAMDEN, OUACHITA County, ARKANSAS, 71711

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $36.4 million to AEROJET ROCKETDYNE INC for work described as: STINGER FLIGHT MOTOR PRODUCTION CONTRACT Key points: 1. The contract value of $36.4 million for Stinger flight motors represents a significant investment in missile propulsion systems. 2. Aerojet Rocketdyne Inc. is the sole contractor, indicating a lack of competition for this specific component. 3. The firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns. 4. The contract duration of 1764 days (approximately 4.8 years) points to a long-term need for these components. 5. The absence of small business set-asides means opportunities for smaller firms in this specialized manufacturing area are limited. 6. The North American Industry Classification System (NAICS) code 336415 identifies the sector as Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source awards. However, the $36.4 million over nearly five years for specialized missile components suggests a potentially reasonable, albeit uncompeted, price point. The firm-fixed-price structure is a positive indicator for cost control, shifting risk to the contractor. Further analysis would require understanding the unit cost and comparing it to historical pricing for similar propulsion systems, if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a single contractor possesses unique capabilities, proprietary technology, or when urgent needs preclude a competitive process. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price and may indicate a reliance on a single supplier for critical components.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing the award, there is less assurance that the price reflects the best value achievable in a market setting.

Public Impact

The primary beneficiaries are the U.S. Army, ensuring the continued availability of Stinger missile flight motors for air defense capabilities. The services delivered include the production and supply of critical propulsion units for a key weapon system. The geographic impact is primarily linked to Aerojet Rocketdyne's manufacturing facilities, with the contract awarded to a facility in Arkansas (AR). Workforce implications include the employment of skilled engineers, technicians, and manufacturing personnel involved in the production of advanced aerospace components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of competition may stifle innovation from other potential suppliers in the long term.
Dependence on a single supplier creates a potential supply chain risk if the contractor faces production issues.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Long-term contract duration (nearly 5 years) provides supply chain stability for a critical defense component.
Awarding to an established contractor likely ensures product quality and reliability for a sensitive defense system.

Sector Analysis

The defense industry, specifically the guided missile and space vehicle propulsion sector, is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and significant R&D investment. Aerojet Rocketdyne operates within this niche, supplying critical components for advanced weapon systems. Comparable spending benchmarks are difficult to ascertain due to the proprietary nature of such systems and the limited number of qualified suppliers. This contract fits within the broader defense manufacturing landscape, supporting the Army's strategic missile capabilities.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This indicates that the primary contract was awarded directly to a large business, Aerojet Rocketdyne. Consequently, the direct impact on the small business ecosystem for this specific award is likely minimal, although the prime contractor may engage small businesses indirectly through its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. 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 limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Stinger Missile System Production
Air Defense Missile Components
Guided Missile Propulsion Units
Department of Defense Weapon System Procurement
Aerojet Rocketdyne Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price escalation
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.4 million to AEROJET ROCKETDYNE INC. STINGER FLIGHT MOTOR PRODUCTION CONTRACT

Who is the contractor on this award?

The obligated recipient is AEROJET ROCKETDYNE INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $36.4 million.

What is the period of performance?

Start: 2014-09-26. End: 2019-07-26.

What is the historical spending trend for Stinger flight motors with Aerojet Rocketdyne?

Historical spending data for Stinger flight motors with Aerojet Rocketdyne is not directly available in the provided snippet. This specific award covers the period from September 26, 2014, to July 26, 2019, totaling $36.4 million. To understand historical trends, one would need to access contract databases for prior and subsequent awards related to Stinger flight motors, examining contract values, quantities, and durations over time. This would reveal whether spending has been consistent, increasing, or decreasing, and if Aerojet Rocketdyne has been the sole or primary supplier throughout. Without this broader context, it's difficult to assess if the current award represents a typical level of investment or a deviation.

How does the unit cost of these Stinger flight motors compare to industry benchmarks?

Determining the precise unit cost for these Stinger flight motors is not possible with the given data, as the total award amount ($36.4 million) and the number of units produced are not specified. Furthermore, industry benchmarks for highly specialized defense components like missile propulsion units are often not publicly available due to proprietary information and the limited number of qualified manufacturers. If the number of units were known, a calculated unit cost could be compared to any available (though likely scarce) public data on similar propulsion systems. However, given the sole-source nature of this contract, direct comparison to competitively bid alternatives is not feasible, making a true 'value for money' assessment based on unit cost challenging.

What are the specific risks associated with relying on a sole-source supplier for Stinger flight motors?

Relying on a sole-source supplier like Aerojet Rocketdyne for Stinger flight motors presents several risks. Firstly, there's a risk of price escalation over time, as the government lacks the leverage of competitive bidding to negotiate lower prices. Secondly, supply chain disruptions are a significant concern; if Aerojet Rocketdyne faces production issues, quality control problems, or financial instability, the availability of critical Stinger components could be jeopardized, impacting national defense readiness. Thirdly, the lack of competition can stifle innovation, as there is less incentive for the sole supplier to invest in developing more efficient or cost-effective production methods if their market position is guaranteed. Finally, there's a potential for vendor lock-in, making it difficult and costly to switch suppliers in the future, even if desired.

What is the track record of Aerojet Rocketdyne in producing flight motors for the Department of Defense?

Aerojet Rocketdyne has a long-standing and extensive track record in producing propulsion systems for the Department of Defense and other government agencies. They are a major player in the aerospace and defense industry, known for developing and manufacturing rocket engines, missiles, and related components. Their portfolio includes work on various strategic and tactical missile programs. While this specific contract is for Stinger flight motors, the company's broader experience suggests a high level of technical expertise and manufacturing capability in this domain. However, past performance on other contracts, including any past issues or successes, would require a deeper dive into specific contract histories and performance reviews.

How does the duration of this contract (1764 days) compare to typical procurement cycles for similar defense components?

A contract duration of 1764 days, approximately 4.8 years, is relatively long for the production of a specific component like a flight motor. Typical procurement cycles can vary significantly based on the complexity of the item, production lead times, and the anticipated demand. For established systems like the Stinger, where production lines may already exist, a multi-year contract can provide stability and ensure a consistent supply. However, such long durations, especially for sole-source awards, can sometimes indicate a lack of flexibility or a long-term commitment that might be better served by shorter, performance-based contracts that allow for periodic re-evaluation. Compared to shorter-term contracts that might focus on immediate needs, this duration suggests a strategic, long-term supply requirement.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 14160 W AR 274 HWY, CAMDEN, AR, 71701

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

Financial Breakdown

Contract Ceiling: $86,573,770

Exercised Options: $36,401,837

Current Obligation: $36,401,837

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $17,722,423

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline