DoD spent $32M on aluminum armor plate, a sole-source award with no small business participation

Contract Overview

Contract Amount: $32,039,838 ($32.0M)

Contractor: Arconic Inc.

Awarding Agency: Department of Defense

Start Date: 2007-09-27

End Date: 2008-06-30

Contract Duration: 277 days

Daily Burn Rate: $115.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ALUMINUM ARMOR PLATE

Place of Performance

Location: RIVERDALE, SCOTT County, IOWA, 52722

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $32.0 million to ARCONIC INC. for work described as: ALUMINUM ARMOR PLATE Key points: 1. The contract awarded to ARCONIC INC. for aluminum armor plate lacked competition, raising concerns about potential overpayment. 2. With a duration of 277 days, the contract's value suggests a significant need for this specific defense material. 3. The absence of small business involvement indicates a missed opportunity for economic diversification within the defense supply chain. 4. This sole-source award for a critical defense component warrants scrutiny regarding the justification for not seeking competitive bids. 5. The fixed-price contract type offers some cost certainty, but the lack of competition limits benchmarking opportunities.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of defense materials. Without competitive bids, it's difficult to ascertain if the $32 million price reflects fair market value. The contract was awarded for aluminum armor plate, a specialized product, making direct comparisons to commercial contracts less relevant. However, the lack of competition inherently limits the government's ability to secure the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, ARCONIC INC., was solicited. The justification for this approach is not detailed in the provided data. Sole-source awards typically occur when a unique product or service is required, or in cases of urgent need where competition is not feasible. The lack of competition means there was no price discovery through bidding, potentially leading to a higher cost for the government.

Taxpayer Impact: Taxpayers may have paid a premium for this aluminum armor plate due to the absence of competitive bidding. Without multiple offers, the government could not leverage market forces to drive down the price.

Public Impact

The Department of the Army benefits from the acquisition of critical aluminum armor plate for its operational needs. This contract ensures the supply of specialized materials essential for defense applications, potentially for vehicle or personnel protection. The geographic impact is likely concentrated within the defense industrial base and military installations where the armor is utilized. Workforce implications may include specialized manufacturing roles within ARCONIC INC. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition on a significant defense contract.
Absence of small business participation in a sole-source award.
Potential for non-optimal pricing due to sole-source procurement.

Positive Signals

Awarded to a known entity (ARCONIC INC.) suggesting established capabilities.
Fixed-price contract offers some cost predictability.
Specific material (aluminum armor plate) addresses a defined defense requirement.

Sector Analysis

The manufacturing of aluminum sheet, plate, and foil (NAICS 331315) is a key component of the broader metals manufacturing sector. This contract falls within the defense industrial base, where specialized materials like armor plating are critical. The market for defense-grade aluminum is influenced by government demand, technological advancements in material science, and geopolitical factors. Benchmarking this specific contract's value is difficult without comparable sole-source awards for similar defense materials.

Small Business Impact

This contract did not include any small business set-aside provisions, nor is there any indication of subcontracting to small businesses. The sole-source nature of the award, combined with the absence of explicit small business considerations, means that opportunities for small business participation in this specific procurement were likely minimal. This could represent a missed opportunity to engage the small business industrial base in supplying critical defense components.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's procurement regulations and potentially the Inspector General's office, especially if concerns regarding the sole-source justification or pricing arise. Transparency is limited by the sole-source nature, as the competitive process, which typically involves public solicitations and bid disclosures, was bypassed. Accountability rests with the contracting officers to ensure the justification for sole-source procurement was valid and that the price was fair and reasonable.

Related Government Programs

Department of Defense Procurement
Defense Materials Acquisition
Aluminum Manufacturing
Sole-Source Contracts
Tactical Vehicle Components

Risk Flags

Sole-source award lacks competitive justification.
No small business participation identified.
Potential for inflated pricing due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to ARCONIC INC.. ALUMINUM ARMOR PLATE

Who is the contractor on this award?

The obligated recipient is ARCONIC 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 $32.0 million.

What is the period of performance?

Start: 2007-09-27. End: 2008-06-30.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded solely to ARCONIC INC. The specific justification for this sole-source determination is not detailed in the data. Typically, sole-source awards require a formal justification, such as the existence of only one responsible source, urgent and compelling circumstances, or a national security requirement that cannot be met by other means. Without this justification, it is impossible to fully assess the necessity of bypassing the competitive bidding process for this $32 million contract for aluminum armor plate.

How does the price of $32 million for aluminum armor plate compare to market rates or similar contracts?

Directly comparing the $32 million price is challenging due to the sole-source nature of this award and the specialized application of aluminum armor plate for defense purposes. Without competitive bids, there is no benchmark price derived from market forces. To assess value, one would need to compare this to other sole-source awards for similar defense-grade materials, analyze ARCONIC INC.'s pricing structure for non-defense applications if available, or conduct a should-cost analysis. The lack of competition inherently limits the ability to definitively state if this price represents optimal value for the taxpayer.

What are the potential risks associated with a sole-source award for critical defense components?

Sole-source awards for critical defense components carry several risks. Firstly, there is a heightened risk of paying a non-competitive price, potentially exceeding fair market value, as the government cannot leverage competition to drive down costs. Secondly, it can stifle innovation and limit the development of alternative suppliers, potentially creating single points of failure in the supply chain. Thirdly, it may reduce transparency and increase the potential for contractor influence or complacency. For this specific contract, the risk is that the Department of the Army may not have received the best possible value for its $32 million investment.

What is the historical spending pattern for aluminum armor plate by the Department of Defense?

The provided data only details a single contract for $32,039,838.44 awarded in 2007-2008. To understand historical spending patterns, a broader analysis of procurement data would be necessary. This would involve searching for all contracts related to 'aluminum armor plate' or similar defense materials across various Department of Defense agencies and fiscal years. Examining trends in award types (competed vs. sole-source), pricing, quantities, and contractors over time would reveal patterns and identify any significant shifts or anomalies in spending.

What is ARCONIC INC.'s track record with the Department of Defense for similar materials?

The data shows ARCONIC INC. was the sole recipient of this $32 million contract for aluminum armor plate. To assess their track record, one would need to examine their contract history with the DoD, looking for prior or subsequent awards for similar or related materials. This would include reviewing contract performance ratings, any past performance issues, and the types of contracts they have secured (e.g., competed vs. sole-source). A comprehensive review would help determine if ARCONIC INC. is a reliable and competitive supplier for defense materials.

What is the significance of the contract type being 'FIRM FIXED PRICE' in this sole-source context?

The 'FIRM FIXED PRICE' (FFP) contract type means that the price is set and not subject to adjustment based on the contractor's cost experience. In a sole-source scenario, FFP provides the government with cost certainty, as the total amount payable is known upfront. However, it does not guarantee that the fixed price represents the best possible value, as there was no competition to establish that price. The risk shifts to the contractor, who bears the burden of cost overruns, but the government foregoes potential savings that might have been achieved through a competitive process.

Industry Classification

NAICS: Manufacturing › Alumina and Aluminum Production and Processing › Aluminum Sheet, Plate, and Foil Manufacturing

Product/Service Code: METAL BARS, SHEETS, SHAPES

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: Alcoa Extrusions, Inc. (UEI: 001339472)

Address: 4879 STATE ST, BETTENDORF, IA, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $32,039,838

Exercised Options: $32,039,838

Current Obligation: $32,039,838

Timeline