Army's $37.6M remote video terminal logistics contract awarded to Textron Systems Corporation

Contract Overview

Contract Amount: $37,600,844 ($37.6M)

Contractor: Textron Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2023-02-07

End Date: 2025-04-07

Contract Duration: 790 days

Daily Burn Rate: $47.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ORDERING PERIOD 3 ARMY ONE SYSTEM REMOTE VIDEO TERMINAL CONTRACTOR LOGISITICS SUPPORT FISCAL YEAR 2023

Place of Performance

Location: COCKEYSVILLE, BALTIMORE County, MARYLAND, 21030

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $37.6 million to TEXTRON SYSTEMS CORPORATION for work described as: ORDERING PERIOD 3 ARMY ONE SYSTEM REMOTE VIDEO TERMINAL CONTRACTOR LOGISITICS SUPPORT FISCAL YEAR 2023 Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns. 2. Limited competition may have led to a higher-than-necessary price for services. 3. The contract duration of nearly two years suggests a need for sustained logistical support. 4. Performance is tied to the Army's One System Remote Video Terminal program. 5. The contractor, Textron Systems, has a significant presence in defense manufacturing. 6. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely monitored.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of logistics support for specialized equipment. The Cost Plus Fixed Fee structure requires careful oversight to ensure costs remain reasonable and do not escalate beyond initial projections. Without competitive bids, it's difficult to definitively assess if the pricing reflects fair market value for the services rendered. The awarded amount of $37.6 million over its period of performance suggests a substantial investment in maintaining operational readiness for the Army's video terminal systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, proprietary technology, or when urgent needs preclude a full and open competition. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the most cost-effective solution is selected. It also raises concerns about whether alternative solutions or more competitive pricing were explored.

Taxpayer Impact: Taxpayers may be paying a premium for this contract due to the absence of competitive bidding. Sole-source awards can reduce the pressure on contractors to offer their best pricing, potentially leading to higher overall expenditures for the government.

Public Impact

The primary beneficiaries are the U.S. Army personnel who rely on the operational readiness of the One System Remote Video Terminal. Services delivered include essential logistics support, ensuring the functionality and maintenance of critical communication equipment. The geographic impact is likely focused on Army installations where these terminals are deployed, both domestically and potentially overseas. Workforce implications may include the need for specialized technical personnel employed by Textron Systems to provide the contracted support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize cost escalation if not managed rigorously.
Lack of competition raises questions about whether the government secured the best possible value.
The specific nature of the equipment may create vendor lock-in, reducing future competition.
Limited transparency into the justification for sole-source award could obscure potential alternatives.

Positive Signals

Contract ensures continued operational readiness of critical Army communication systems.
Textron Systems is an established defense contractor with relevant experience.
The contract addresses a specific, ongoing need for logistical support.
The fixed fee component of the contract provides some cost predictability.
The contract duration allows for sustained support and planning.

Sector Analysis

The defense logistics and support sector is a critical component of the U.S. military's operational capability. This contract falls within the broader category of defense electronics and communication systems support. The market for such specialized services can be concentrated, with a few key players possessing the requisite expertise and security clearances. Spending in this area is driven by the need to maintain and upgrade complex military hardware, ensuring readiness across various branches of the armed forces. Comparable spending benchmarks are difficult to establish without more detailed service scope and market analysis, especially given the sole-source nature of this award.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting it's not a small business prime award. This means that the primary contract is with a large business, Textron Systems Corporation. While there is no direct set-aside for small businesses, there is potential for subcontracting opportunities to small businesses within Textron's supply chain. However, the extent of these opportunities and the focus on small business subcontracting are not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to monitor expenditures and ensure that costs are reasonable and allocable to the contract. Accountability measures would include performance reviews, adherence to delivery schedules, and quality control. Transparency is generally limited for sole-source awards, but the contract details and performance metrics should be accessible through official channels. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Army One System Program
Remote Video Terminal Systems
Defense Logistics Support Contracts
Department of Defense Communication Systems

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of detailed performance metrics in provided data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.6 million to TEXTRON SYSTEMS CORPORATION. ORDERING PERIOD 3 ARMY ONE SYSTEM REMOTE VIDEO TERMINAL CONTRACTOR LOGISITICS SUPPORT FISCAL YEAR 2023

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 $37.6 million.

What is the period of performance?

Start: 2023-02-07. End: 2025-04-07.

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

The provided data indicates the contract was awarded 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source justification. While the specific rationale is not detailed, common reasons for sole-source awards include the uniqueness of the technology or service, the contractor's proprietary rights, or an urgent and compelling need that precludes full and open competition. For this specific contract, it's likely related to specialized logistics support for the Army's One System Remote Video Terminal, where Textron Systems may be the only entity with the necessary technical expertise, access to proprietary information, or existing infrastructure to provide the required services without unacceptable delay or cost to the government. Further investigation into the official justification documentation (e.g., Justification and Approval for Other Than Full and Open Competition) would be required for a definitive answer.

How does the pricing structure (Cost Plus Fixed Fee) of this contract compare to industry benchmarks for similar logistics support services?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense contracting, particularly for services where the scope of work may evolve or is difficult to precisely define upfront. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fixed fee provides some cost certainty for the contractor's profit, the 'cost plus' element means the government bears the risk of cost overruns. Benchmarking CPFF contracts is complex as it depends heavily on the specific services, the level of risk, the contractor's overhead rates, and the negotiated fee. Without detailed cost breakdowns and comparisons to similar sole-source CPFF contracts for specialized military equipment logistics, it's difficult to definitively state if this contract's pricing is above or below market rates. However, the inherent risk of cost escalation in CPFF contracts necessitates robust government oversight to ensure value for money.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how is Textron Systems' performance being measured?

The provided data does not explicitly detail the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for logistics support contracts of this nature, typical KPIs would likely include metrics related to response times for support requests, equipment uptime and availability, delivery timelines for parts or services, accuracy of inventory management, and overall customer satisfaction (e.g., from Army end-users). Performance measurement would likely involve regular reporting by Textron Systems, periodic reviews by the Army contracting officer's representative (COR), and potentially site visits or audits. Adherence to these KPIs and SLAs would directly impact Textron's ability to receive full payment and potentially influence future contract awards.

What is the historical spending pattern for logistics support related to the Army's One System Remote Video Terminal program, and how does this award compare?

Historical spending data for the Army's One System Remote Video Terminal program's logistics support is not provided in the current dataset. To establish a historical spending pattern, one would need to access previous contract awards for similar services, potentially including sustainment, maintenance, and repair of these terminals. Comparing this $37.6 million award requires knowing the duration and scope of prior contracts. If previous contracts were shorter, less comprehensive, or awarded competitively, this current sole-source award might represent an increase in cost or a shift in procurement strategy. Analyzing trends in spending, contract types, and competition levels over several fiscal years would provide valuable context for assessing the current award's financial implications.

What are the potential risks associated with the sole-source nature of this contract, particularly concerning long-term sustainment and future technological upgrades?

The primary risk associated with the sole-source nature of this contract is the potential for reduced price competition, leading to higher costs for the government over the contract's duration and potentially for future sustainment efforts. It can also create vendor lock-in, making it difficult and costly to switch providers or adopt new technologies if Textron Systems maintains exclusive rights or deep integration. For long-term sustainment and future upgrades, the lack of competition might disincentivize Textron from proactively offering innovative or cost-saving solutions, as they face limited pressure from rivals. The government may also have less leverage in negotiating terms for upgrades or modifications. This underscores the importance of robust contract management and potentially planning for future competitive procurements if feasible.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc

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

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

Financial Breakdown

Contract Ceiling: $37,600,844

Exercised Options: $37,600,844

Current Obligation: $37,600,844

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $7,034,283

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ21D0059

IDV Type: IDC

Timeline