Army awards $230M contract for aircraft accessories and components to Telephonics Corporation

Contract Overview

Contract Amount: $22,964,444 ($23.0M)

Contractor: Telephonics Corp

Awarding Agency: Department of Defense

Start Date: 2006-08-30

End Date: 2010-10-30

Contract Duration: 1,522 days

Daily Burn Rate: $15.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200611!004654!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0216 !A!N! !N! ! !20060830!20080930!075335484!081509218!050590710!N!TELEPHONICS CORPORATION !815 BROADHOLLOW RD !FARMINGDALE !NY!11735!51000!013!34!NEWARK !ESSEX !NEW JERSEY!+000004400000!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!U!1!001!N!1G!A!Y!Z! ! !N!B!N!N! ! !A! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: FARMINGDALE, SUFFOLK County, NEW YORK, 11735

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $23.0 million to TELEPHONICS CORP for work described as: 200611!004654!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0216 !A!N! !N! ! !20060830!20080930!075335484!081509218!050590710!N!TELEPHONICS CORPORATION !815 BROADHOLLOW RD !FARMINGDALE !NY!11735!51000!013!34!NEWARK !ESSE… Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns. 2. The contract's cost-plus-fixed-fee structure may incentivize higher spending. 3. Performance period spans over two years, indicating a significant operational need. 4. The award falls under the 'Other Aircraft Parts' category, suggesting a specialized requirement. 5. Geographic location of the contractor is in New York, potentially impacting local economic benefits.

Value Assessment

Rating: questionable

The contract value of $229,644,444 for aircraft accessories and components appears substantial. Without comparable sole-source awards or detailed cost breakdowns, it is difficult to definitively benchmark the value for money. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D or uncertain scope projects, can lead to higher final costs compared to fixed-price contracts if not managed rigorously. Further analysis of the contractor's historical performance and profit margins on similar contracts would be necessary for a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. The justification for this sole-source award would need to be thoroughly reviewed to ensure it was appropriate and that alternatives were adequately considered.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is less pressure on the contractor to offer the most competitive pricing. It also limits opportunities for other businesses to compete for and win government contracts.

Public Impact

The primary beneficiary of this contract is the U.S. Army, which will receive essential aircraft accessories and components. The contract supports the maintenance and operational readiness of Army aviation assets. The geographic impact is primarily centered around Farmingdale, New York, where Telephonics Corporation is located, potentially supporting local jobs and the regional economy. The contract may indirectly impact the aerospace and defense manufacturing workforce in the New York region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely monitored.
Lack of transparency in the sole-source justification could mask potential inefficiencies.
Contract duration of over two years requires sustained oversight to ensure performance and cost control.

Positive Signals

Award to an established contractor (Telephonics Corporation) suggests potential for reliable delivery.
Contract addresses a specific need for aircraft accessories and components, indicating critical operational support.
The fixed-fee component of the CPFF contract provides some level of cost predictability for the contractor's effort.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and components. The market for such specialized parts is often characterized by high barriers to entry due to technical expertise, certifications, and established relationships with prime contractors and government agencies. Spending in this sub-sector is driven by military readiness requirements and the lifecycle support of aging and new aircraft fleets. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft components awarded to various defense contractors, considering factors like volume, complexity, and pricing structures.

Small Business Impact

There is no indication from the provided data that this contract includes a small business set-aside. Furthermore, the contract is not marked as being awarded to a small business. This suggests that subcontracting opportunities for small businesses may be limited unless Telephonics Corporation voluntarily includes them in its supply chain. The absence of a set-aside means that larger, established companies were likely the primary focus of this procurement, potentially limiting the direct impact on the broader small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Army Contracting Command and the Defense Contract Management Agency (DCMA). Given the sole-source nature and CPFF structure, rigorous oversight would be crucial to monitor costs, ensure performance against requirements, and verify the contractor's adherence to the contract terms. Transparency regarding the justification for the sole-source award and ongoing performance reports would be key accountability measures. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Aviation Programs
Aircraft Component Procurement
Defense Logistics Agency (DLA) Contracts
Aerospace Manufacturing Contracts
Missile Systems Support Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.0 million to TELEPHONICS CORP. 200611!004654!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ06C0216 !A!N! !N! ! !20060830!20080930!075335484!081509218!050590710!N!TELEPHONICS CORPORATION !815 BROADHOLLOW RD !FARMINGDALE !NY!11735!51000!013!34!NEWARK !ESSEX !NEW JERSEY!+000004400000!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is TELEPHONICS CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.0 million.

What is the period of performance?

Start: 2006-08-30. End: 2010-10-30.

What is Telephonics Corporation's track record with the Department of Defense, particularly on similar sole-source contracts?

Telephonics Corporation has a history of contracting with the Department of Defense, often providing specialized electronic systems and components for military aircraft and platforms. While specific details on their sole-source contract performance require deeper data mining, their continued awards suggest a level of capability and responsiveness valued by the military. However, sole-source awards, by their nature, limit public visibility into competitive pricing and performance benchmarks. A thorough review would involve examining past contract performance reports (e.g., CPARS), profit analyses, and any documented issues or successes on previous sole-source engagements to assess their reliability and cost-effectiveness in such scenarios.

How does the $229.6 million contract value compare to other sole-source awards for similar aircraft accessories and components?

Benchmarking this $229.6 million sole-source award against similar contracts is challenging without access to a comprehensive database of sole-source procurements for comparable aircraft accessories and components. Sole-source awards are, by definition, not subject to the same competitive pressures as fully competed contracts, which can lead to price variations. To provide a meaningful comparison, one would need to identify contracts with similar scope, complexity, and duration awarded on a sole-source basis to other defense contractors. Factors such as the specific type of aircraft, the criticality of the components, and the technological sophistication involved would also need to be considered. Without such comparative data, assessing whether this award represents fair and reasonable pricing is difficult.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for aircraft components?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for aircraft components are twofold. Firstly, the sole-source nature eliminates competitive bidding, which can lead to higher prices for the government as there is less incentive for the contractor to offer the most cost-effective solution. Taxpayers may bear a premium for the lack of competition. Secondly, the CPFF structure, while providing flexibility for evolving requirements or R&D, can incentivize the contractor to incur higher costs to increase their fixed fee, which is a percentage of the allowable costs. This necessitates robust government oversight to scrutinize costs, prevent overruns, and ensure efficient performance. Without stringent monitoring, there's a risk of both inflated costs and potential delays.

What is the expected program effectiveness and impact of these aircraft accessories and components on Army aviation readiness?

The expected program effectiveness hinges on the reliability and timely delivery of the aircraft accessories and components procured under this contract. These parts are critical for maintaining the operational readiness and safety of Army aviation assets. If the components are high-quality and delivered as specified, they will directly contribute to reducing aircraft downtime, ensuring mission capability, and enhancing overall fleet availability. Conversely, any deficiencies in quality, performance, or delivery could negatively impact readiness, potentially leading to mission delays or increased maintenance costs. The specific impact is tied to the criticality of the components being supplied and their role within the broader aviation maintenance and operational framework.

How has historical spending on 'Other Aircraft Parts and Auxiliary Equipment' by the Department of the Army trended over the past five years?

Analyzing historical spending trends for 'Other Aircraft Parts and Auxiliary Equipment' by the Department of the Army requires access to detailed historical contract databases. Generally, spending in this category tends to fluctuate based on factors such as the operational tempo of Army aviation units, the age of the existing fleet requiring parts, and the introduction of new aircraft platforms. Periods of high operational tempo or significant fleet modernization efforts typically correlate with increased spending. Conversely, budget constraints or a stable fleet might lead to reduced spending. Without specific data, it's difficult to provide precise figures, but the category generally represents a consistent, albeit variable, portion of the Army's aviation maintenance and sustainment budget.

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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Griffon Corporation (UEI: 050590710)

Address: 815 BROADHOLLOW RD, FARMINGDALE, NY, 90

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline