Army awards $837.7M for MH-60R aircraft components, with Longbow LLC as the sole contractor

Contract Overview

Contract Amount: $18,698,405 ($18.7M)

Contractor: Longbow LLC

Awarding Agency: Department of Defense

Start Date: 2004-09-10

End Date: 2005-09-30

Contract Duration: 385 days

Daily Burn Rate: $48.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200412!005186!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ04C0289 !A!N! !N! ! !20040910!20050930!837750223!837750223!837750223!N!LONGBOW LIMITED LIABILITY COMP!5600 SAND LAKE RD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000017635497!N!N!000000000000!AC14!RDTE/AIRCRAFT-DEMO/VALID !A1A!AIRFRAMES AND SPARES !191 !MH-60R !336411!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!N!U!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to LONGBOW LLC for work described as: 200412!005186!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ04C0289 !A!N! !N! ! !20040910!20050930!837750223!837750223!837750223!N!LONGBOW LIMITED LIABILITY COMP!5600 SAND LAKE RD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORAN… Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and lack of competitive pressure. 2. Significant funding allocated for aircraft components, indicating a critical need for these parts within Army aviation. 3. The contract's duration of over a year suggests a substantial and ongoing requirement for the specified components. 4. Focus on airframes and spares points to maintenance and sustainment activities rather than new platform development. 5. The sole-source nature warrants scrutiny to ensure fair pricing and prevent contractor over-reliance. 6. Limited competition may restrict opportunities for other capable suppliers to enter the market.

Value Assessment

Rating: questionable

The contract value of $837.7 million for aircraft components is substantial. Without comparable sole-source contracts for similar components or a detailed breakdown of costs, it is difficult to definitively assess value for money. The 'cost plus fixed fee' pricing structure can sometimes lead to higher costs if not rigorously managed, as the contractor is incentivized to incur costs to achieve the fixed fee. Benchmarking against industry standards for similar components is crucial for a thorough value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Army did not conduct a competitive bidding process. This typically occurs when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher prices than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without a competitive process, there is less assurance that the government is receiving the best possible price for these critical aircraft components.

Public Impact

The primary beneficiaries are the U.S. Army aviation units that rely on the MH-60R helicopter for their operations. The contract delivers essential airframe components and spares, crucial for maintaining the operational readiness of the MH-60R fleet. The geographic impact is primarily within the U.S. defense industrial base, supporting manufacturing and supply chains. Workforce implications include employment at Longbow LLC and its subcontractors involved in the production and delivery of these components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize cost overruns if not closely monitored.
Lack of transparency in the justification for sole-source award.
Potential for contractor lock-in and reduced future competition.
Limited visibility into the specific components being procured and their unit costs.

Positive Signals

Addresses a critical need for MH-60R aircraft components, ensuring operational readiness.
Longbow LLC is a known entity in the defense sector, suggesting some level of established capability.
Contract specifies a fixed fee, providing some cost certainty once the fee is determined.
The contract is for components, which may be more standardized than entire systems, potentially simplifying oversight.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. Contracts for aircraft components, especially for specialized platforms like the MH-60R, often involve a limited number of qualified suppliers. The market size for such components is substantial, driven by military readiness requirements. This contract fits within the 'Aircraft Manufacturing' sub-sector, focusing on the sustainment and readiness of existing platforms rather than the development of new ones. Comparable spending benchmarks would typically involve analyzing historical awards for similar components across different military branches.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to Longbow LLC. There is no explicit mention of subcontracting plans for small businesses within the provided data. The sole-source nature of the award limits opportunities for small businesses to participate directly as prime contractors. Further investigation into Longbow LLC's subcontracting practices would be needed to assess the impact on the small business ecosystem.

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 tied to the terms of the 'cost plus fixed fee' contract, requiring adherence to delivery schedules and quality standards. Transparency is limited due to the sole-source nature and the lack of publicly available detailed cost breakdowns. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse.

Related Government Programs

MH-60R Seahawk Helicopter Program
Aviation Component Procurement
Defense Logistics Agency (DLA) Support Contracts
Army Aviation Readiness Programs
Longbow Weapon System Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding justification
Potential for cost overruns
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to LONGBOW LLC. 200412!005186!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ04C0289 !A!N! !N! ! !20040910!20050930!837750223!837750223!837750223!N!LONGBOW LIMITED LIABILITY COMP!5600 SAND LAKE RD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000017635497!N!N!000000000000!AC14!RDTE/AIRCRAFT-DEMO/VALID !A1A!AIRFRAMES AND SPARES !191 !MH-60R !336411!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is LONGBOW LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2004-09-10. End: 2005-09-30.

What is the specific justification provided by the Department of the Army for awarding this contract on a sole-source basis to Longbow LLC?

The provided data indicates the contract was 'NOT COMPETED'. However, the specific justification for this sole-source award is not detailed in the extract. Typically, sole-source justifications are based on factors such as the existence of only one responsible source, urgent and compelling needs that preclude competition, or specific national security requirements. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to ascertain the precise reasons. This lack of transparency is a common concern with sole-source procurements, as it limits public understanding and scrutiny of why competitive processes were bypassed.

How does the 'cost plus fixed fee' (CPFF) pricing structure compare to other contract types for similar aircraft component procurements in terms of cost efficiency?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is well-defined but the exact costs are uncertain, such as in research and development or complex manufacturing. The contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF can offer less cost certainty for the government, as costs can fluctuate. However, FFP contracts may lead to higher initial bids to account for contractor risk. For component procurement, FFP is often preferred if specifications are stable. The CPFF structure here suggests potential cost uncertainties or a need for flexibility, but it requires robust government oversight to manage costs effectively and ensure the fixed fee remains appropriate relative to the effort.

What is the historical spending pattern for MH-60R aircraft components, and how does this $837.7 million award fit within that trend?

Analyzing historical spending for MH-60R components requires access to comprehensive contract databases beyond the provided snippet. This specific award of $837.7 million represents a significant single contract action. Without prior data, it's difficult to determine if this is an anomaly or part of a consistent spending trend. Typically, sustainment and component procurement for major weapon systems like the MH-60R involve numerous smaller contracts over the system's lifecycle. A large, sole-source award like this could indicate a specific surge in demand, a consolidation of previously fragmented requirements, or a strategic decision to sole-source a critical supply chain element. Further analysis of past contract awards for the MH-60R program would be necessary to contextualize this expenditure.

What are the potential risks associated with Longbow LLC being the sole provider for these specific MH-60R components?

The primary risk associated with a sole-source provider like Longbow LLC is the lack of competition, which can lead to inflated prices and reduced incentives for innovation or efficiency. If Longbow LLC faces production issues, supply chain disruptions, or financial difficulties, it could significantly impact the availability of critical MH-60R components, potentially grounding aircraft and affecting operational readiness. Furthermore, the government becomes heavily reliant on this single entity, limiting its leverage in negotiations and its ability to switch suppliers if performance issues arise. This dependency also poses a long-term strategic risk if the supplier's capabilities diminish or if market conditions change.

What is the track record of Longbow LLC in delivering complex aviation components to the Department of Defense?

Longbow LLC is known for its involvement in the development and production of advanced weapon systems, particularly the AGM-114 Hellfire missile and related components. While this contract focuses on airframe components for the MH-60R, the company's experience suggests a capability in complex defense manufacturing. However, specific performance data for delivering MH-60R airframe components under this particular contract (W58RGZ-04-C-0289) is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, on-time delivery rates, quality metrics, and any past disputes or contract modifications related to Longbow LLC's other defense contracts.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5600 SAND LAKE RD, ORLANDO, FL, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline