DoD awards $123M contract for 17,680 parachutes, with North American Aerodynamics Inc. as the sole awardee

Contract Overview

Contract Amount: $12,316,530 ($12.3M)

Contractor: North American Aerodynamics, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-05-24

End Date: 2013-05-31

Contract Duration: 2,199 days

Daily Burn Rate: $5.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BASIC AWARD IS FOR 17,680 EA, 120MM PARACHUTES.

Place of Performance

Location: ROXBORO, PERSON County, NORTH CAROLINA, 27573

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to NORTH AMERICAN AERODYNAMICS, INC. for work described as: BASIC AWARD IS FOR 17,680 EA, 120MM PARACHUTES. Key points: 1. The contract's value appears reasonable given the quantity of parachutes procured. 2. Competition dynamics for this specific defense procurement need further examination. 3. The long duration of the contract (over 6 years) may introduce performance risks. 4. This award represents a significant investment in aerial delivery systems for the Army. 5. The contract falls within the broader defense manufacturing sector, specifically related to aircraft components.

Value Assessment

Rating: fair

The contract's total value of $123 million for 17,680 parachutes suggests a per-unit cost of approximately $7,000. Benchmarking this against similar parachute procurements is challenging without more specific technical details. However, the firm fixed-price nature of the contract provides cost certainty for the government. The long performance period could lead to cost efficiencies if managed well, but also carries risks of price escalation if not adequately controlled.

Cost Per Unit: Approximately $7,000 per parachute (based on total award value and quantity).

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. However, only one award was made to North American Aerodynamics, Inc. The number of bids received is not specified, but a single award from a full and open competition might suggest either a highly specialized requirement or limited market interest. This could impact price discovery if a more robust competitive environment was expected.

Taxpayer Impact: While full and open competition was utilized, the single award limits the immediate benefit of price reduction through multiple competing offers. Taxpayers benefit from the established process, but the potential for greater savings through a more competitive bid landscape is not realized.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize these parachutes for aerial operations. The contract delivers essential life-saving equipment for troop deployment and cargo delivery. The geographic impact is national, supporting defense logistics across various operational theaters. Workforce implications include potential job creation and sustainment within the aerospace manufacturing sector, particularly at North American Aerodynamics, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 6 years) could lead to obsolescence of technology or increased maintenance costs.
Reliance on a single awardee for a critical safety item like parachutes presents a supply chain risk.
Lack of detailed information on the competitive landscape beyond 'full and open' makes it difficult to assess optimal value.
The specific type and performance requirements of the parachutes are not detailed, making value assessment difficult.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, adhering to standard procurement practices.
The quantity of parachutes procured suggests a significant operational need being met.
The contractor, North American Aerodynamics, Inc., is established in the aerospace sector.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components and safety equipment. The market for specialized parachutes is likely niche, dominated by a few key manufacturers capable of meeting stringent military specifications. Comparable spending benchmarks would typically involve other large-volume procurements of similar safety-critical equipment for military aviation.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless North American Aerodynamics, Inc. voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which places cost risk on the contractor. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Aircraft Component Procurement
Military Aviation Safety Equipment
Aerial Delivery Systems Contracts
Aerospace Manufacturing Defense Contracts

Risk Flags

Potential for supply chain disruption due to single award.
Risk of cost escalation over long contract duration.
Unclear competitive landscape despite 'full and open' designation.
NAICS code misclassification may obscure spending data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to NORTH AMERICAN AERODYNAMICS, INC.. BASIC AWARD IS FOR 17,680 EA, 120MM PARACHUTES.

Who is the contractor on this award?

The obligated recipient is NORTH AMERICAN AERODYNAMICS, 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 $12.3 million.

What is the period of performance?

Start: 2007-05-24. End: 2013-05-31.

What is the track record of North American Aerodynamics, Inc. in delivering defense contracts, particularly for parachutes?

Information regarding North American Aerodynamics, Inc.'s specific track record for parachute delivery is not detailed in the provided data. However, the award of a significant contract by the Department of the Army suggests a level of capability and past performance deemed sufficient by the contracting agency. Further investigation into the company's contract history, including any past performance reviews or disputes related to similar procurements, would be necessary for a comprehensive assessment. The duration of this contract (2007-2013) indicates a long-term relationship for this specific requirement, implying a degree of reliability or a lack of suitable alternatives at the time of award.

How does the per-unit cost of these parachutes compare to industry benchmarks or similar government procurements?

The estimated per-unit cost is approximately $7,000 ($123,165,296.60 / 17,680 units). Benchmarking this figure is challenging without specific details on the parachute's type, capabilities, and intended use (e.g., personnel vs. cargo, high-altitude, specific load capacities). Generally, military-grade parachutes, especially those designed for complex operations or extreme conditions, can command significant costs due to rigorous testing, specialized materials, and stringent quality control. If these are standard personnel parachutes, the cost might be on the higher end, suggesting potential areas for cost optimization or indicating a highly specialized design. A comparison with other DoD parachute awards for similar quantities and specifications would be the most relevant benchmark.

What are the primary risks associated with a single award contract for such a critical defense item?

A single award contract for critical defense items like parachutes presents several risks. Firstly, it creates a sole-source dependency, meaning the government relies entirely on one supplier. This can lead to supply chain vulnerabilities; any disruption at the contractor's facility (e.g., natural disaster, labor strike, financial instability) could halt production and impact military readiness. Secondly, without ongoing competition, there's less pressure on the contractor to innovate or maintain competitive pricing over the contract's life. While this contract was initially awarded under 'full and open competition,' the single award outcome means future procurements might face limited options if the market shrinks or if the incumbent's pricing becomes less attractive. Lastly, the government has less leverage in negotiations if issues arise during the contract term.

What is the expected effectiveness and performance of these parachutes based on the contract details?

The contract details provide the quantity (17,680 units) and the total award value ($123 million) but lack specific information regarding the parachute's technical specifications, performance requirements, or intended operational environment. Effectiveness and performance are therefore difficult to assess directly from this data. However, as a Department of the Army procurement, it is reasonable to assume these parachutes are intended to meet rigorous military standards for reliability, safety, and functionality in various deployment scenarios. The firm fixed-price nature suggests that performance standards were clearly defined and agreed upon, with the contractor bearing the risk of non-performance.

How has historical spending on parachutes by the Department of Defense trended, and does this award align with those patterns?

Analyzing historical spending trends for parachutes by the DoD requires access to comprehensive procurement databases beyond the scope of this single award. However, large-scale parachute procurements are typically driven by major military operations, force structure changes, or the fielding of new equipment requiring aerial delivery capabilities. This $123 million award over a multi-year period (2007-2013) for over 17,000 units suggests a substantial, ongoing requirement for these items. Without comparative data on previous or subsequent large parachute contracts, it's difficult to definitively state if this award aligns with historical patterns. However, the scale indicates a significant investment consistent with equipping a large military force.

What are the implications of the 'Ammunition (except Small Arms) Manufacturing' NAICS code for this parachute contract?

The assignment of NAICS code 332993, 'Ammunition (except Small Arms) Manufacturing,' to this contract for parachutes appears to be an administrative classification rather than a direct reflection of the product manufactured. Parachutes are typically classified under aerospace product and parts manufacturing (e.g., NAICS 336413). It's possible this code was used due to historical classification practices, a broader interpretation of 'ordnance' or 'support equipment' within certain defense supply chains, or an error in the system. This misclassification could potentially obscure spending data related to parachute procurement if analysts rely solely on NAICS codes for category analysis, making it harder to track spending specifically within the parachute or aerospace safety equipment sub-sector.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: TEXTILE/LEATHER/FUR; TENT; FLAG

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W52P1J05R0237

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 110 CARVER DR, ROXBORO, NC, 27573

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

Financial Breakdown

Contract Ceiling: $12,316,530

Exercised Options: $12,316,530

Current Obligation: $12,316,530

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline