DoD's $12.3M contract for aircraft systems components awarded to Transaero, Inc. lacked competition

Contract Overview

Contract Amount: $12,291,400 ($12.3M)

Contractor: Transaero, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-11-17

End Date: 2013-09-30

Contract Duration: 2,874 days

Daily Burn Rate: $4.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200602!000227!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0011 !A!N! !N! ! !20051117!20091031!012895066!012895066!012895066!N!TRANSAERO INC !80 CROSSWAYS PARK DR !WOODBURY !NY!11797!82744!059!36!WOODBURY !NASSAU !NEW YORK !+000003997500!N!N!000000000000!1650!ACFT HYDRAULIC, VACUUM & DE-ICING SYS COMP !A1B!AIRCRAFT ENGINES AND SPARES !278 !CH-47F !336413!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!2!001!N!1G!A!Y!Z! ! !N!B!N!N! ! !Z! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MELVILLE, SUFFOLK County, NEW YORK, 11747

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to TRANSAERO, INC. for work described as: 200602!000227!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0011 !A!N! !N! ! !20051117!20091031!012895066!012895066!012895066!N!TRANSAERO INC !80 CROSSWAYS PARK DR !WOODBURY !NY!11797!82744!059!36!WOODBURY !NASS… Key points: 1. The contract's value of $12.3 million was awarded without a competitive bidding process. 2. The sole awardee, Transaero, Inc., has a track record with the Department of Defense. 3. The contract duration was 4 years, with a significant portion of the funding obligated at award. 4. The procurement falls under the 'Aircraft Engines and Spares' category, indicating a specialized need. 5. The contract's lack of competition raises questions about potential overpayment and value for money.

Value Assessment

Rating: questionable

The contract value of $12.3 million for aircraft hydraulic, vacuum, and de-icing system components is difficult to benchmark due to the sole-source nature of the award. Without competitive bids, it's challenging to ascertain if this price represents fair market value. Comparisons to similar sole-source procurements for specialized aircraft parts would be necessary for a more robust assessment, but the absence of competition inherently limits the ability to ensure optimal pricing for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Transaero, Inc. was the only bidder considered. The data indicates no other sources were solicited or considered. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means there was no price discovery through market forces, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium for these aircraft components due to the absence of competitive pressure to drive down prices. The government did not benefit from the potential cost savings that a competitive solicitation could have yielded.

Public Impact

The U.S. Army Aviation and Missile Command is the primary beneficiary, receiving critical components for aircraft maintenance and operation. The contract delivers essential aircraft hydraulic, vacuum, and de-icing system components, crucial for aviation safety and functionality. The geographic impact is primarily within the United States, supporting military aviation operations. The contract supports the defense industrial base by providing work for the awarded contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency in government spending.
Dependence on a single supplier can create supply chain risks.

Positive Signals

The contract addresses a specific and potentially critical need for aircraft components.
The contractor, Transaero, Inc., has existing experience with the Department of Defense.
The contract was awarded with a firm fixed price, providing cost certainty once negotiated.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically concerning aircraft parts and maintenance. The market for specialized aircraft components can be niche, with a limited number of qualified suppliers for certain high-technology or legacy systems. The $12.3 million value is moderate for a defense contract, but its sole-source nature is a key characteristic. Comparable spending benchmarks would typically involve analyzing other sole-source awards for similar specialized parts or competitive bids for more common aircraft components.

Small Business Impact

There is no indication in the provided data that this contract included a small business set-aside. As a sole-source award, it is unlikely that subcontracting opportunities for small businesses were a primary consideration or requirement within the solicitation itself. The impact on the small business ecosystem is therefore likely minimal, as the primary contract was not designed to foster small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight structures. Accountability measures would be tied to the delivery of specified components according to the firm fixed price agreement. Transparency is limited due to the sole-source nature of the award, as the justification for not competing the contract is not detailed here. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Component Procurement
Aviation Systems Maintenance
Department of Defense Logistics
Sole-Source Defense Contracts
Aircraft Engines and Spares

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to TRANSAERO, INC.. 200602!000227!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0011 !A!N! !N! ! !20051117!20091031!012895066!012895066!012895066!N!TRANSAERO INC !80 CROSSWAYS PARK DR !WOODBURY !NY!11797!82744!059!36!WOODBURY !NASSAU !NEW YORK !+000003997500!N!N!000000000000!1650!ACFT HYDRAULIC, VACUUM & DE-ICING SYS COMP !A1B!AIRCRAFT ENGINES AND SPARES !278 !CH-47F !336413!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is TRANSAERO, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $12.3 million.

What is the period of performance?

Start: 2005-11-17. End: 2013-09-30.

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

The provided data does not include the specific justification for awarding this contract on a sole-source basis. Typically, sole-source procurements are justified when only one responsible source is available or capable of meeting the government's needs, often due to proprietary technology, unique capabilities, or urgent requirements where competition is not feasible. Without this justification, it is impossible to assess the validity of the sole-source determination and whether it truly served the government's best interest or if alternative solutions were overlooked.

How does the pricing of this contract compare to similar sole-source awards for aircraft components?

Direct comparison of this contract's pricing to similar sole-source awards is challenging without access to a broader dataset of sole-source procurements for comparable aircraft hydraulic, vacuum, and de-icing system components. The absence of competition inherently makes benchmarking difficult. To perform a thorough analysis, one would need to identify other instances where similar specialized parts were procured without competition, analyze the unit costs, quantities, and contract terms, and then assess any significant deviations. Given the sole-source nature, there's an inherent risk that the price may not be as competitive as it would be in a fully competed environment.

What are the potential risks associated with awarding a contract of this value ($12.3M) without competition?

The primary risk associated with awarding a $12.3 million contract without competition is the potential for paying a higher price than necessary. Without the pressure of multiple bidders vying for the contract, the awarded contractor may not have an incentive to offer the most competitive pricing. Other risks include a lack of innovation that might have been spurred by competition, potential for complacency from the sole provider, and reduced transparency in the procurement process. Furthermore, if the sole source encounters production issues or financial instability, it could lead to significant disruptions in the supply chain for these critical aircraft components.

What is Transaero, Inc.'s track record with the Department of Defense, particularly concerning sole-source awards?

Transaero, Inc. has a history of contracting with the Department of Defense, as indicated by this award. However, the provided data does not detail their overall track record, including the frequency or nature of previous sole-source awards. A comprehensive assessment would require examining their contract history for performance issues, past performance evaluations, and the proportion of their DoD business that has been awarded competitively versus sole-source. Understanding their broader performance and contracting patterns is crucial for evaluating the reliability and value associated with this specific sole-source award.

What is the significance of the Product Service Code (PSC) 'A1B' and the North American Industry Classification System (NAICS) code '336413' in understanding this contract?

The Product Service Code (PSC) 'A1B' signifies 'Aircraft Hydraulic, Vacuum, and De-Icing System Components,' directly indicating the nature of the goods procured. The North American Industry Classification System (NAICS) code '336413' identifies the industry as 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' Together, these codes classify the contract within a specialized segment of the aerospace manufacturing industry. This helps in understanding that the procurement is for specific, manufactured parts rather than services or broader systems, and it aids in identifying comparable companies and market trends within this particular manufacturing sub-sector.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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

Address: 80 CROSSWAYS PARK DR, WOODBURY, NY, 03

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline