DoD awards $1.55B for 14 Shadow UAS to Textron Systems, a sole-source procurement

Contract Overview

Contract Amount: $1,551,565,404 ($1.6B)

Contractor: Textron Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-10-31

End Date: 2021-04-30

Contract Duration: 4,930 days

Daily Burn Rate: $314.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCURE 14 SHADOW UNMANNED AIRCRAFT SYSTEMS

Place of Performance

Location: COCKEYSVILLE, BALTIMORE County, MARYLAND, 21030

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $1.55 billion to TEXTRON SYSTEMS CORPORATION for work described as: PROCURE 14 SHADOW UNMANNED AIRCRAFT SYSTEMS Key points: 1. The contract represents a significant investment in unmanned aerial systems for intelligence, surveillance, and reconnaissance. 2. Sole-source procurement raises questions about potential price inflation and lack of competitive pressure. 3. The long duration of the contract (over 12 years) suggests a sustained need for these systems. 4. The firm-fixed-price structure shifts some risk to the contractor but requires careful oversight of costs. 5. The absence of small business set-asides or subcontracting plans warrants further investigation into broader economic impact. 6. The procurement falls within the broader context of increasing defense spending on advanced aerial platforms.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. However, the total award of over $1.55 billion for 14 Shadow UAS indicates a substantial per-unit cost. Without comparable sole-source procurements or detailed cost breakdowns, it's difficult to definitively assess if this represents excellent value for money. The long contract duration and firm-fixed-price nature suggest a negotiated price that may not reflect the lowest possible market rate achievable through competition.

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 considered. This approach is typically used when a unique capability is required, or when only one responsible source can fulfill the requirement. The lack of competition means that taxpayers did not benefit from the price discovery that typically occurs in a competitive bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium, as there was no competitive pressure to drive down prices. This limits the government's ability to secure the best possible deal.

Public Impact

The Department of the Army benefits directly through the acquisition of critical intelligence, surveillance, and reconnaissance capabilities. The Shadow UAS provides real-time battlefield information, enhancing situational awareness for ground troops. The contract supports advanced aerospace manufacturing jobs, primarily in Maryland where Textron Systems is located. The systems are deployed to support military operations globally, providing essential data for mission success.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in cost build-up due to sole-source award.
Long contract duration may not adapt to rapidly evolving technology without modification.
No explicit small business subcontracting goals identified.

Positive Signals

Firm-fixed-price contract shifts some performance risk to the contractor.
Sustained award indicates a critical and ongoing need for the capability.
Procurement of advanced unmanned aerial systems enhances national security capabilities.

Sector Analysis

The Unmanned Aerial Systems (UAS) market is a rapidly growing segment within the aerospace and defense industry. This contract for Shadow UAS falls under the broader Aircraft Manufacturing (NAICS 336411) sector. The global defense spending on drones and related technologies has seen significant increases, driven by their effectiveness in ISR and combat roles. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of military UAS and the sole-source award, but the scale of this contract is substantial within the defense sector.

Small Business Impact

This contract does not appear to have included specific small business set-aside provisions, nor are there explicit indications of subcontracting plans aimed at small businesses. As a sole-source award to a large corporation, the direct impact on the small business ecosystem is likely minimal. However, Textron Systems may engage small businesses as suppliers, but this is not detailed in the provided data. Further review of subcontracting reports would be necessary to ascertain any indirect benefits to small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. The firm-fixed-price structure provides some cost control, but the sole-source nature necessitates rigorous performance monitoring and adherence to contract terms. Inspector General investigations could be initiated if performance issues or allegations of impropriety arise. Transparency is limited by the lack of competitive bidding, making detailed public scrutiny of cost-effectiveness challenging.

Related Government Programs

Unmanned Aerial Vehicle (UAV) procurement
Intelligence, Surveillance, and Reconnaissance (ISR) systems
Aerospace and Defense Manufacturing
Department of the Army Major Systems Acquisitions

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.55 billion to TEXTRON SYSTEMS CORPORATION. PROCURE 14 SHADOW UNMANNED AIRCRAFT SYSTEMS

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 $1.55 billion.

What is the period of performance?

Start: 2007-10-31. End: 2021-04-30.

What is the historical spending trend for the Shadow UAS program with Textron Systems?

The provided data indicates a single definitive contract awarded on October 31, 2007, with an end date of April 30, 2021, totaling $1,551,565,403.77. This suggests that this specific contract encompasses the majority, if not all, of the government's spending on the Shadow UAS with Textron Systems during this period. Without access to prior contract awards or modifications for this specific system under Textron, it's difficult to establish a long-term historical spending trend beyond this single, large definitive contract. However, the duration and value imply a consistent and significant investment over the contract's lifespan.

How does the per-unit cost of the Shadow UAS compare to similar unmanned aircraft systems?

Determining a precise per-unit cost is challenging as the contract data does not specify the number of units procured beyond the '14 SHADOW UNMANNED AIRCRAFT SYSTEMS' in the description, which might refer to a specific lot or configuration rather than the total quantity over the contract's life. Furthermore, as a sole-source award, direct cost comparisons are difficult. However, if we were to assume the '14' refers to the total quantity for the $1.55 billion award, the per-unit cost would be extraordinarily high, exceeding $110 million per system. This figure is likely not representative of the total procurement. Generally, military-grade ISR UAS can range from a few million to tens of millions of dollars per unit, depending on sophistication, payload, and operational capabilities. The Shadow UAS is a relatively mature system, and its cost would need to be benchmarked against other tactical ISR platforms.

What are the primary risks associated with this sole-source procurement of Shadow UAS?

The primary risk associated with this sole-source procurement is the potential for inflated pricing due to the absence of competitive bidding. Without competing offers, Textron Systems may not have had the same incentive to offer the lowest possible price. Another risk is a potential lack of innovation or responsiveness to evolving requirements if the government becomes overly reliant on a single provider. Furthermore, the long duration of the contract could lead to vendor lock-in, making it difficult and costly to switch to alternative systems in the future if needed. Ensuring robust oversight and performance management becomes critical to mitigate these risks.

What is the operational effectiveness and strategic importance of the Shadow UAS for the Department of the Army?

The RQ-20 Puma, often referred to as the Shadow UAS in broader contexts, is a crucial component of the Department of the Army's intelligence, surveillance, and reconnaissance (ISR) capabilities. Its primary role is to provide real-time battlefield imagery and data to ground commanders, enhancing situational awareness and enabling more informed decision-making. The system's ability to operate at tactical levels allows for persistent monitoring of enemy movements, target acquisition, and battle damage assessment. Its strategic importance lies in its contribution to force protection, operational effectiveness, and overall mission success in complex environments, reducing the need for manned reconnaissance missions in high-risk areas.

Are there any known performance issues or contractor track record concerns with Textron Systems regarding this contract?

The provided data does not contain specific details regarding performance issues or contractor track record concerns for Textron Systems related to this particular $1.55 billion definitive contract for Shadow UAS. As a sole-source award with a long duration (over 12 years), it implies a level of satisfaction or necessity that led to its continuation. However, without access to performance reviews, contract modification history, or any official reports (e.g., from the Government Accountability Office or Inspector General), a comprehensive assessment of their track record on this specific contract is not possible. Generally, Textron Systems is a well-established defense contractor with a broad portfolio of unmanned systems.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ07R0618

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,621,450,849

Exercised Options: $1,615,984,182

Current Obligation: $1,551,565,404

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline