AeroVironment secures $12.6M contract for Switchblade contractor logistic services, awarded via sole-source negotiation
Contract Overview
Contract Amount: $12,658,236 ($12.7M)
Contractor: Aerovironment, Inc.
Awarding Agency: Department of Defense
Start Date: 2021-03-23
End Date: 2025-02-26
Contract Duration: 1,436 days
Daily Burn Rate: $8.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SWITCHBLADE CONTRACTOR LOGISTIC SERVICES
Place of Performance
Location: SIMI VALLEY, VENTURA County, CALIFORNIA, 93065
Plain-Language Summary
Department of Defense obligated $12.7 million to AEROVIRONMENT, INC. for work described as: SWITCHBLADE CONTRACTOR LOGISTIC SERVICES Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, allowing for potential cost overruns. 2. Sole-source award limits competitive pressure, potentially impacting price efficiency. 3. Contract duration extends to February 2025, indicating a long-term need. 4. The contractor, AeroVironment, is a known entity in defense manufacturing. 5. The specific service category (336414) relates to guided missile and space vehicle manufacturing. 6. The contract value is substantial, requiring careful oversight of expenditures.
Value Assessment
Rating: fair
The contract's cost-plus-fixed-fee structure necessitates close monitoring to ensure costs remain reasonable. Without competitive bidding, it's challenging to benchmark the pricing against market alternatives. The value proposition hinges on AeroVironment's specialized capabilities and the critical nature of the Switchblade system. Further analysis of the fixed fee component and historical cost performance would be needed for a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically employed when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government.
Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as the government did not benefit from price reductions typically achieved through a competitive process.
Public Impact
The primary beneficiaries are the Department of the Army, ensuring continued logistical support for the Switchblade system. Services delivered include contractor logistic support, crucial for maintaining the operational readiness of the unmanned aerial systems. The geographic impact is primarily within California, where the contractor is based, but the system's deployment could be global. Workforce implications include continued employment for AeroVironment personnel involved in logistics and support roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially leading to less favorable pricing.
- Cost-plus-fixed-fee contract type can incentivize higher spending if not rigorously managed.
- Lack of transparency in the sole-source justification process could obscure potential alternatives.
- Long contract duration may not adapt well to evolving technological needs or cost efficiencies.
- Limited public data on performance metrics makes independent assessment of value difficult.
Positive Signals
- AeroVironment is an established provider with expertise in the relevant defense technology.
- The contract addresses a critical logistical need for a deployed defense system.
- The fixed fee component provides some cost certainty for a portion of the contract.
- The Department of the Army has a vested interest in ensuring the system's readiness, implying oversight.
- The contract is managed by a specific agency (Department of the Army), indicating focused accountability.
Sector Analysis
The defense logistics sector is characterized by specialized providers and long-term support contracts. Companies like AeroVironment operate within a niche market focused on advanced defense systems. Spending in this area is driven by national security requirements and the need to maintain complex military equipment. Comparable contracts often involve extensive service level agreements and performance metrics, though specifics for sole-source awards can be less transparent.
Small Business Impact
This contract does not appear to involve a small business set-aside. Given the specialized nature of the Switchblade system and its logistics, it is likely that larger, established defense contractors are best positioned to fulfill these requirements. There is no explicit information regarding subcontracting opportunities for small businesses within this award, which could limit their participation in this specific contract's value chain.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined by the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award, but contract modifications and payment data are typically subject to federal reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Unmanned Aerial Vehicle (UAV) Logistics Support
- Defense Contractor Support Services
- Guided Missile Systems Maintenance
- AeroVironment Product Support Contracts
- Department of the Army Logistics Contracts
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Limited public performance data
- Potential for cost overruns
Tags
defense, department-of-the-army, aero-vionment-inc, switchblade, contractor-logistic-services, sole-source, cost-plus-fixed-fee, guided-missile-and-space-vehicle-manufacturing, california, definitive-contract, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.7 million to AEROVIRONMENT, INC.. SWITCHBLADE CONTRACTOR LOGISTIC SERVICES
Who is the contractor on this award?
The obligated recipient is AEROVIRONMENT, 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 $12.7 million.
What is the period of performance?
Start: 2021-03-23. End: 2025-02-26.
What is AeroVironment's track record with similar sole-source contracts for defense systems?
AeroVironment has a history of securing sole-source and limited-competition contracts for its specialized defense products, particularly for systems like the Switchblade. This is often due to their proprietary technology and established expertise, making them the sole qualified provider for certain sustainment and upgrade services. While this provides continuity for the government, it also means that competitive pricing benchmarks are less readily available for these specific awards. Analyzing past performance on similar contracts would involve reviewing their delivery history, cost performance reports (if publicly available), and any contract modifications to understand how effectively they have managed costs and met requirements under non-competitive conditions.
How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for this type of service?
The Cost-Plus-Fixed-Fee (CPFF) contract type is common for services where the scope of work is well-defined but costs are difficult to estimate precisely upfront, such as complex logistics and maintenance. In a CPFF contract, the government pays the contractor's actual allowable costs plus a fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of actual costs, offering greater cost certainty to the government but potentially higher risk for the contractor if costs escalate. Compared to Cost-Plus-Incentive-Fee (CPIF) contracts, CPFF offers less incentive for the contractor to control costs beyond the initial estimate, as the fee is fixed. For taxpayers, CPFF requires diligent oversight to ensure costs remain reasonable and the fixed fee is appropriate for the services rendered.
What are the primary risks associated with a sole-source award for critical defense logistics?
The primary risk associated with a sole-source award for critical defense logistics is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the most favorable pricing. Another risk is vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting flexibility and innovation. Furthermore, if the sole-source provider experiences financial difficulties or operational issues, it could significantly disrupt the supply chain and impact the readiness of the defense system. Ensuring robust contract management, performance monitoring, and regular re-evaluation of the sole-source justification is crucial to mitigate these risks.
What is the historical spending pattern for Switchblade contractor logistic services?
Historical spending data for 'Switchblade contractor logistic services' specifically, especially under sole-source awards, may not be readily available in aggregated public databases. However, one can infer trends by examining AeroVironment's overall contract awards related to the Switchblade system and similar unmanned aerial systems. Spending in this category is likely to fluctuate based on operational tempo, system upgrades, and the lifecycle of the defense program. Analyzing past contract values, durations, and any reported cost overruns or savings on previous logistics support contracts for this or comparable systems would provide context. The current $12.6 million award suggests a significant, ongoing requirement for sustainment and support.
How does the geographic location of the contractor (California) impact delivery and costs?
The contractor's location in California can influence delivery times and costs, particularly for logistics support that may involve shipping parts or deploying personnel. Proximity to major military installations or distribution hubs can reduce transit times and associated transportation expenses. However, California also has a higher cost of doing business, including labor and operational costs, which could be reflected in the contract's pricing. The government's decision to award to a California-based contractor suggests that either the benefits of their specialized expertise outweigh potential geographic cost disadvantages, or that the logistical challenges are manageable within the contract's framework. The specific terms of the contract would detail any allowances for travel, shipping, and associated expenses.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q19R0032
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 900 INNOVATORS WAY, SIMI VALLEY, CA, 93065
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $40,494,104
Exercised Options: $12,658,236
Current Obligation: $12,658,236
Actual Outlays: $23,985
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2021-03-23
Current End Date: 2025-02-26
Potential End Date: 2026-09-15 12:09:00
Last Modified: 2025-09-15
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