DoD's $194M Longbow LLC contract for aircraft parts saw no competition, raising value concerns

Contract Overview

Contract Amount: $194,212,870 ($194.2M)

Contractor: Longbow LLC

Awarding Agency: Department of Defense

Start Date: 2009-10-16

End Date: 2017-09-30

Contract Duration: 2,906 days

Daily Burn Rate: $66.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ADVANCED PROCUREMENT (LONG LEAD) LRIP LOT 1 FCR REU/UTA PROGRAM

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $194.2 million to LONGBOW LLC for work described as: ADVANCED PROCUREMENT (LONG LEAD) LRIP LOT 1 FCR REU/UTA PROGRAM Key points: 1. The contract's value for money is questionable due to the lack of competition. 2. Competition dynamics were non-existent, as the contract was sole-sourced. 3. Risk indicators are present due to the sole-source nature and extended duration. 4. Performance context is limited without competitive benchmarks. 5. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. 6. The firm fixed-price contract type offers some cost certainty.

Value Assessment

Rating: questionable

Benchmarking the value of this $194 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if taxpayers received the best possible deal. The extended duration of nearly 8 years also warrants scrutiny regarding ongoing cost-effectiveness. Comparing it to similar sole-source contracts for specialized aircraft components might offer some insight, but a true value-for-money assessment is hampered by the absence of a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Longbow LLC, was considered. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. The lack of competition means there was no market pressure to drive down prices or encourage innovative solutions. Consequently, the government may not have benefited from the full range of options or the most cost-effective pricing available.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This limits the government's ability to secure the best value for public funds.

Public Impact

The primary beneficiaries are the Department of Defense and potentially its aviation units requiring specialized aircraft parts. The contract delivers essential 'Other Aircraft Parts and Auxiliary Equipment' crucial for maintaining military aircraft. The geographic impact is primarily linked to Florida, where the contractor is located. Workforce implications include employment at Longbow LLC and potentially its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can reduce innovation and efficiency.
Extended contract duration without re-competition poses long-term value risks.
Limited transparency in pricing due to non-competitive nature.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Specialized nature of the parts may justify a sole-source award in some cases.
Contract completion indicates delivery of necessary components.

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry, a specialized segment within the broader aerospace and defense sector. This sector is characterized by high technological barriers to entry, stringent quality requirements, and often, a limited number of qualified suppliers for specific components. The market size for such specialized parts can be substantial, driven by military and commercial aviation needs. Comparable spending benchmarks are difficult to establish without knowing the exact nature of the parts, but contracts in this sub-sector can range from millions to billions of dollars depending on the complexity and volume.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information suggesting significant subcontracting opportunities for small businesses. As a sole-source award to a specific contractor, the direct impact on the broader small business ecosystem is likely minimal unless the prime contractor actively engages small businesses in its supply chain. Further analysis would be needed to determine any indirect effects or subcontracting plans.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract management by the Department of the Army, including performance monitoring and financial audits. The firm fixed-price nature provides some level of cost control. However, the sole-source award limits the effectiveness of competitive oversight. Transparency is reduced due to the lack of public bid information. Inspector General jurisdiction would apply for any investigations into fraud, waste, or abuse.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Sole-Source Contracts
Longbow Program

Risk Flags

Sole-source award
Lack of competition
Extended contract duration
Limited value-for-money assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $194.2 million to LONGBOW LLC. ADVANCED PROCUREMENT (LONG LEAD) LRIP LOT 1 FCR REU/UTA PROGRAM

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 $194.2 million.

What is the period of performance?

Start: 2009-10-16. End: 2017-09-30.

What is the specific nature of the 'Other Aircraft Parts and Auxiliary Equipment' procured under this contract?

The provided data does not specify the exact nature of the 'Other Aircraft Parts and Auxiliary Equipment.' The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' covers a broad range of components, including landing gear, aircraft engines and engine parts, propellers and propeller blades, and other aircraft parts and auxiliary equipment not elsewhere classified. Without more detailed contract line item information, it's impossible to determine if these are standard components or highly specialized, proprietary parts that might better justify a sole-source award.

How does the $194 million contract value compare to similar sole-source awards for aircraft parts?

Direct comparison of this $194 million contract value to similar sole-source awards is challenging without knowing the specific type and quantity of parts procured. However, for specialized or long-lead-time components, such contract values are not uncommon within the defense sector. The key concern with sole-source awards is the absence of competitive benchmarking. While the dollar amount itself may be within a typical range for complex aerospace components, the lack of competition means its 'value for money' cannot be definitively assessed against market alternatives. Further investigation into the contractor's pricing structure and justification for the sole-source award would be necessary for a more robust comparison.

What are the potential risks associated with a sole-source award of this magnitude and duration?

The primary risks associated with a sole-source award of $194 million over nearly eight years include potential price inflation due to the lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the procurement process. Taxpayers may end up paying more than necessary for the parts. Furthermore, reliance on a single supplier can create supply chain vulnerabilities if the contractor faces production issues or goes out of business. The extended duration without re-competition means the government is locked into this arrangement, potentially missing out on better technologies or pricing that could emerge over time.

What performance metrics or oversight mechanisms were in place for this contract?

The provided data indicates a 'FIRM FIXED PRICE' contract type, which generally implies that the contractor is responsible for delivering the specified goods or services at a predetermined price. Oversight would typically involve the contracting officer and technical representatives monitoring delivery schedules, quality standards, and compliance with contract terms. However, specific performance metrics (e.g., on-time delivery rates, defect rates) and detailed oversight reports are not included in the summary data. The sole-source nature might mean that performance expectations were negotiated directly with Longbow LLC without the benefit of competitive proposals outlining different performance approaches.

What is Longbow LLC's track record with government contracts, particularly sole-source awards?

The provided data identifies Longbow LLC as the contractor but does not offer details on their overall track record, including past performance on sole-source contracts. A comprehensive assessment would require reviewing contract databases for other awards to Longbow LLC, their performance ratings (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract modifications. Understanding their experience with similar sole-source procurements, especially within the defense sector, would provide context for their ability to deliver effectively and at a reasonable price under such conditions.

How does this contract fit into the broader 'ADVANCED PROCUREMENT (LONG LEAD) LRIP LOT 1 FCR REU/UTA PROGRAM' context?

This contract appears to be a component of a larger program, potentially related to Low Rate Initial Production (LRIP) or sustainment ('REU/UTA' might suggest refurbishment, upgrade, or sustainment activities) for a system involving 'FCR' (likely Fire Control Radar) and 'ADVANCED PROCUREMENT (LONG LEAD)' items. The 'LRIP LOT 1' designation suggests it's part of an early production phase. The sole-source nature might stem from the need for specialized, long-lead-time components essential for this specific system, where only one supplier possesses the necessary technical expertise or tooling, making competition impractical or detrimental to program schedule.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ08R0196

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5600 W SAND LAKE RD, ORLANDO, FL, 32819

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

Financial Breakdown

Contract Ceiling: $194,252,870

Exercised Options: $194,212,870

Current Obligation: $194,212,870

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline