DoD's $54M Longbow LLC contract for aircraft parts lacked competition, raising value concerns

Contract Overview

Contract Amount: $54,230,378 ($54.2M)

Contractor: Longbow LLC

Awarding Agency: Department of Defense

Start Date: 2010-07-01

End Date: 2013-02-28

Contract Duration: 973 days

Daily Burn Rate: $55.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ESTABLISHMENT OF UNDEFINITIZED CONTRACT ACTION (UCA) TO FUND CY10 BASIC REQUIREMENT

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $54.2 million to LONGBOW LLC for work described as: ESTABLISHMENT OF UNDEFINITIZED CONTRACT ACTION (UCA) TO FUND CY10 BASIC REQUIREMENT Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The firm-fixed-price structure shifts some risk to the government, especially with an undefinitized contract action. 3. The duration of the contract (973 days) suggests a significant, ongoing need for these aircraft parts. 4. The lack of a small business set-aside indicates this contract was not specifically aimed at supporting smaller enterprises. 5. The contract's value of over $54 million warrants scrutiny regarding its necessity and cost-effectiveness. 6. The undefinitized contract action (UCA) implies an initial lack of full agreement on terms and conditions.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the aircraft parts and their market rates. However, the award of an undefinitized contract action (UCA) on a sole-source basis suggests a potential for inflated pricing due to the absence of competitive pressure. The firm-fixed-price nature, while common, can lead to higher initial bids when competition is absent. The total award value of over $54 million for aircraft parts requires careful justification to ensure it represents a fair and reasonable price for the government.

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 vendors submitting proposals. The lack of competition means there was no opportunity to compare different pricing structures or service levels, potentially leading to a less favorable outcome for the government in terms of cost and value.

Taxpayer Impact: Taxpayers may have paid a premium for these aircraft parts due to the absence of a competitive bidding process. Without competing offers, the government had limited leverage to negotiate the lowest possible price.

Public Impact

The primary beneficiaries are likely the Department of the Army and potentially military personnel relying on the aircraft supported by these parts. The contract delivers essential aircraft parts, crucial for maintaining the operational readiness of specific military platforms. The geographic impact is primarily within Florida, where the contract was managed and potentially where the parts were delivered or utilized. The contract supports the workforce of Longbow LLC and potentially its suppliers, contributing to employment in the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may lead to higher costs.
Undefinitized Contract Action (UCA) indicates initial uncertainty in contract terms, potentially increasing risk.
Long contract duration (973 days) could mask inefficiencies or scope creep if not closely managed.
Lack of small business participation means missed opportunities to leverage diverse supplier base.

Positive Signals

Firm-fixed-price contract shifts some performance risk to the contractor.
Awarding to a specific entity (Longbow LLC) suggests a specialized capability or existing relationship.
The contract addresses a clear need for aircraft parts, supporting military operations.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' covers establishments primarily engaged in manufacturing aircraft parts and auxiliary equipment, not elsewhere classified. The market for such specialized components is often characterized by high barriers to entry, proprietary technology, and a limited number of qualified suppliers, which can sometimes lead to sole-source or limited competition awards.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'sb' field being false. Consequently, there are no direct subcontracting implications for small businesses arising from a specific set-aside requirement. The absence of a small business set-aside means that larger, established contractors were likely the primary focus or sole provider for this requirement, potentially limiting opportunities for smaller firms to participate in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As an undefinitized contract action (UCA), it likely received heightened scrutiny during its initial phases to establish definitive terms. Transparency is limited by the sole-source nature of the award. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

Department of Defense Aircraft Procurement
Aerospace Manufacturing Contracts
Military Aircraft Parts Supply Chain
Sole-Source Defense Contracts
Undefinitized Contract Actions (UCAs)

Risk Flags

Sole-source award
Undefinitized Contract Action (UCA)
Potential for inflated pricing
Lack of competitive benchmarking
Extended performance period without clear definitization

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.2 million to LONGBOW LLC. ESTABLISHMENT OF UNDEFINITIZED CONTRACT ACTION (UCA) TO FUND CY10 BASIC REQUIREMENT

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 $54.2 million.

What is the period of performance?

Start: 2010-07-01. End: 2013-02-28.

What is the specific type of aircraft and the critical nature of the parts being procured under this contract?

The provided data does not specify the exact aircraft platform or the precise nature of the 'Other Aircraft Parts and Auxiliary Equipment' being procured. However, given the context of a Department of the Army contract awarded to Longbow LLC, it is highly probable that these parts are critical components for specific military helicopters or fixed-wing aircraft operated by the Army. Longbow LLC is known for its involvement in advanced targeting and missile systems, particularly for helicopters like the Apache. Therefore, the parts could be related to targeting systems, airframes, engines, or other specialized equipment essential for the operational readiness and mission effectiveness of these platforms. The undefinitized nature of the initial award suggests a time-sensitive requirement where operational needs may have preceded the finalization of contract details.

How does the $54.2 million contract value compare to historical spending on similar parts or for this specific contractor?

Without access to historical spending data for this specific contract or detailed breakdowns of Longbow LLC's past performance with the Department of Defense, a direct comparison is difficult. However, $54.2 million represents a significant investment for aircraft parts. If this is a sole-source award for a recurring need, it suggests either a high unit cost for specialized components or a large quantity requirement. To assess value, one would need to benchmark against similar parts procured competitively by the DoD or other government agencies, or analyze Longbow LLC's pricing trends over time. The fact that it was an undefinitized contract action (UCA) initially might also imply that the final negotiated price could differ from the initial estimate, making historical comparisons even more complex without the definitive contract details.

What are the primary risks associated with a sole-source, undefinitized contract action (UCA) for aircraft parts?

The primary risks associated with a sole-source, undefinitized contract action (UCA) for aircraft parts are multifaceted. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated prices and reduced value for money. The government lacks the leverage to negotiate the best possible terms when only one supplier is considered. Secondly, the undefinitized nature of the contract means that key terms, conditions, and pricing may not be fully established at the outset. This introduces uncertainty and risk, as the contractor may incur costs before definitive terms are agreed upon. This can lead to disputes, cost overruns, and delays. For critical aircraft parts, these risks can impact operational readiness, maintenance schedules, and overall program costs, potentially requiring significant oversight to mitigate.

What is the typical performance period and delivery schedule for contracts of this nature and value?

The provided data indicates a performance period of 973 days, which is approximately 2.66 years, from July 1, 2010, to February 28, 2013. This duration is substantial for a contract valued at over $54 million for aircraft parts. Contracts of this nature and value, especially those involving specialized components for military platforms, often have extended performance periods to ensure a consistent supply chain and accommodate production lead times. Delivery schedules within such contracts are typically phased, with specific delivery orders issued against the contract as needed. The extended period suggests a sustained requirement for these parts, possibly covering multiple aircraft maintenance cycles or upgrades over several fiscal years.

What oversight mechanisms are in place to ensure accountability and prevent waste in sole-source defense contracts?

Oversight for sole-source defense contracts typically involves multiple layers of accountability. Contracting officers are responsible for ensuring fair and reasonable pricing, even in sole-source situations, often through techniques like cost analysis and technical evaluations. Program managers oversee the execution of the contract, ensuring deliverables meet requirements and schedules. Defense Contract Audit Agency (DCAA) may conduct audits of contractor costs to verify allowability, allocability, and reasonableness. Furthermore, the Inspector General (IG) offices within the Department of Defense provide independent oversight to detect and prevent fraud, waste, and abuse. Transparency is often enhanced through reporting requirements and public contract databases, although sole-source awards inherently have less transparency than competitively bid contracts.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ09R0112

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

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: $54,230,378

Exercised Options: $54,230,378

Current Obligation: $54,230,378

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline