Textron Systems awarded $22.6M for ARV-30 Prototype Vehicle Procurement, a sole-source contract

Contract Overview

Contract Amount: $22,583,354 ($22.6M)

Contractor: Textron Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-02-29

End Date: 2026-03-02

Contract Duration: 732 days

Daily Burn Rate: $30.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ARV-30 PROTOTYPE VEHICLE PROCUREMENT.

Place of Performance

Location: COCKEYSVILLE, BALTIMORE County, MARYLAND, 21030

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to TEXTRON SYSTEMS CORPORATION for work described as: ARV-30 PROTOTYPE VEHICLE PROCUREMENT. Key points: 1. The contract's value of $22.6 million for prototype vehicles suggests a significant investment in advanced military hardware. 2. As a sole-source award, the absence of a competitive bidding process raises questions about potential price optimization and market responsiveness. 3. The Cost Plus Fixed Fee (CPFF) contract type indicates that the government will reimburse Textron for allowable costs plus a fixed fee, which can introduce cost overrun risks. 4. The contract duration of 732 days allows ample time for prototype development and testing. 5. The procurement is for military armored vehicles, placing it within a specialized and high-cost defense manufacturing sector. 6. The award to Textron Systems Corporation, a known defense contractor, suggests a reliance on established capabilities for this specialized need.

Value Assessment

Rating: questionable

Benchmarking the value of this prototype contract is challenging without comparable sole-source awards for similar advanced vehicle prototypes. The CPFF structure inherently carries a higher risk of cost escalation compared to fixed-price contracts. While the fixed fee provides some cost certainty for the contractor's profit, the government bears the risk of all allowable costs. Further analysis would require understanding the specific development milestones and the complexity of the ARV-30 prototype.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Textron Systems Corporation, was solicited. This approach is typically used when there is a unique capability or proprietary technology involved, or in cases of urgent need where competition is not feasible. The lack of competition means there was no direct price comparison or market pressure to drive down costs through bidding.

Taxpayer Impact: Taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The absence of multiple bids means the government could potentially be paying a higher price than if the contract had been competed.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive advanced prototype vehicles for evaluation and potential future fielding. The services delivered include the design, development, and production of the ARV-30 prototype vehicles. The geographic impact is primarily within Maryland, where Textron Systems Corporation is located, and potentially at military testing facilities. Workforce implications include employment opportunities for engineers, technicians, and manufacturing personnel at Textron Systems and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type introduces potential for cost overruns.
Lack of transparency in the justification for sole-source procurement.
Limited visibility into alternative solutions or technological advancements from other potential suppliers.

Positive Signals

Award to an established defense contractor with relevant expertise.
Contract duration allows for thorough development and testing.
Focus on prototype development suggests investment in future military capabilities.

Sector Analysis

The defense sector, specifically military armored vehicle manufacturing, is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Contracts in this area often involve complex technologies and stringent performance requirements. Spending benchmarks are difficult to establish precisely due to the specialized nature of prototypes, but significant government investment in next-generation ground vehicles is common.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award to a large prime contractor, there may be limited direct subcontracting opportunities for small businesses unless specifically mandated or pursued by Textron Systems. The impact on the small business ecosystem would depend on Textron's subcontracting strategy and whether they engage small businesses for specialized components or services.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures will be tied to the achievement of contract milestones and the delivery of functional prototypes according to specifications. Transparency may be limited due to the sole-source nature, but contract award details are publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Next Generation Combat Vehicle (NGCV) Program
Armored Multi-Purpose Vehicle (AMPV)
Joint Light Tactical Vehicle (JLTV)
Future Vertical Lift (FVL) Program

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to TEXTRON SYSTEMS CORPORATION. ARV-30 PROTOTYPE VEHICLE PROCUREMENT.

Who is the contractor on this award?

The obligated recipient is TEXTRON SYSTEMS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2024-02-29. End: 2026-03-02.

What is Textron Systems Corporation's track record with similar sole-source prototype vehicle procurements for the Department of Defense?

Textron Systems Corporation has a history of developing and producing advanced military vehicles and systems. While specific details on past sole-source prototype awards for vehicles directly comparable to the ARV-30 are not readily available in the public domain, the company has been a significant contractor for various armored vehicle programs, including the Armored Multi-Purpose Vehicle (AMPV) and has been involved in developmental contracts. Their experience in complex defense manufacturing suggests a capability to undertake such projects. However, the absence of public data on similar sole-source prototype awards makes a direct comparison of their performance and pricing in such specific circumstances difficult.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of value for money for prototype development?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex projects where the scope and costs are not well-defined at the outset. It reimburses the contractor for allowable costs plus a predetermined fixed fee, representing profit. While it allows flexibility and encourages innovation by reducing the contractor's financial risk, it shifts a significant portion of the cost risk to the government. Compared to fixed-price contracts, CPFF generally offers less value for money in terms of cost certainty for the government, as cost overruns are borne by the agency. However, for highly uncertain prototype development, it can be the most practical approach to ensure technical objectives are met.

What are the primary risks associated with a sole-source award for a prototype vehicle procurement?

The primary risks associated with a sole-source award for a prototype vehicle procurement include a lack of competitive pricing, potentially leading to higher costs for the government. Without competing bids, there is less incentive for the contractor to optimize costs or offer the most innovative or cost-effective solution. Furthermore, the government has limited visibility into alternative technologies or approaches that other potential suppliers might offer. There's also a risk that the sole-source justification might not be as robust as it could be, potentially masking opportunities for competition that were overlooked or deemed infeasible without thorough market research.

What are the potential performance implications of awarding this contract to Textron Systems Corporation?

Awarding this contract to Textron Systems Corporation suggests the Department of the Army believes the company possesses the necessary technical expertise, manufacturing capabilities, and potentially proprietary technology required for the ARV-30 prototype. Textron's established presence in the defense sector and experience with armored vehicles indicate a strong likelihood of meeting performance specifications. However, the success of the prototype development will ultimately depend on effective program management, clear communication of requirements, and Textron's execution of the development and production plan within the defined timelines and budget constraints.

How does this $22.6 million award fit into historical spending patterns for military armored vehicle development and procurement?

The $22.6 million award for the ARV-30 prototype vehicle procurement represents a significant, but not unprecedented, investment within the broader context of military armored vehicle development. Major defense programs for new vehicle platforms can range from hundreds of millions to billions of dollars over their lifecycle, encompassing research, development, testing, and full-rate production. Prototype awards, especially for advanced concepts, typically fall within the tens of millions. This specific award appears consistent with the initial investment phase for developing and testing a new, potentially complex, armored vehicle system, aligning with historical spending patterns for such critical defense modernization efforts.

What are the implications of the 732-day contract duration for the ARV-30 prototype development?

A contract duration of 732 days (approximately two years) for the ARV-30 prototype development suggests a phased approach that allows for thorough design, engineering, fabrication, integration, and testing of the vehicle. This timeframe is generally considered reasonable for developing a complex military prototype, providing sufficient time to address technical challenges, incorporate feedback from testing, and ensure the prototype meets initial performance objectives. A shorter duration might risk rushed development and compromised quality, while an excessively long duration could indicate potential inefficiencies or scope creep. The 732-day period suggests a structured and deliberate development process.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV24R0024

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc

Address: 124 INDUSTRY LN, HUNT VALLEY, MD, 21030

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: $33,338,256

Exercised Options: $22,583,354

Current Obligation: $22,583,354

Actual Outlays: $1,553,646

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $4,418,338

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline