Department of the Army awards $20.1M for aviation ground power units, citing sole-source justification

Contract Overview

Contract Amount: $20,104,444 ($20.1M)

Contractor: SUN Test Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-03-14

End Date: 2027-02-28

Contract Duration: 716 days

Daily Burn Rate: $28.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER 0001 OF 20 AVIATION GROUND POWER UNITS

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35824

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $20.1 million to SUN TEST SYSTEMS, INC. for work described as: DELIVERY ORDER 0001 OF 20 AVIATION GROUND POWER UNITS Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market exploration. 2. The contract duration of 716 days suggests a need for sustained support, but the lack of competition hinders value assessment. 3. Performance period spans over two years, indicating a significant commitment to the selected vendor. 4. The specific item, aviation ground power units, is critical for aircraft operations, highlighting the importance of reliable sourcing. 5. Geographic location of performance is Alabama, potentially impacting local economies and workforce.

Value Assessment

Rating: questionable

The contract's value of $20.1 million for 20 units over approximately two years needs careful benchmarking. Without competitive bids, it's difficult to ascertain if this price represents fair market value. The per-unit cost appears to be around $1 million, which seems high for ground power units and warrants further investigation into the specific technical requirements and included features.

Cost Per Unit: Approximately $1,005,222 per unit. This figure should be compared against industry benchmarks for similar aviation ground power units, considering factors like power output, portability, and specialized features.

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The justification for this approach is not detailed in the provided data. Sole-source awards can lead to higher prices and reduced innovation due to the absence of competitive pressure. It is crucial to understand why full and open competition was not pursued.

Taxpayer Impact: Taxpayers may be paying a premium for these units due to the lack of competition. Without a competitive bidding process, there is less assurance that the government secured the best possible price and value for these essential aviation components.

Public Impact

The primary beneficiaries are the Department of the Army, ensuring operational readiness for aviation units. The contract delivers 20 aviation ground power units, essential equipment for aircraft maintenance and deployment. Services will be delivered in Alabama, potentially supporting local jobs and businesses within the state. The acquisition of specialized equipment may require skilled technicians for operation and maintenance, impacting the aviation support workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition raises concerns about whether the most innovative or cost-effective solution was obtained.
High per-unit cost requires validation against market rates for similar equipment.

Positive Signals

The contract addresses a critical need for aviation ground support equipment, ensuring operational capability.
The fixed-firm price contract structure provides cost certainty for the government once awarded.
The vendor, SUN TEST SYSTEMS, INC., is being awarded this contract, suggesting they possess the necessary capabilities.

Sector Analysis

The aerospace and defense sector is characterized by complex supply chains and specialized manufacturing. Aviation ground support equipment, such as power units, is a niche but vital component of this industry. Spending in this area is driven by military readiness requirements and technological advancements in aircraft. Benchmarking this contract would involve comparing it to similar sole-source or competed awards for specialized ground support equipment within the Department of Defense or allied nations.

Small Business Impact

The data indicates this contract was not competed and does not specify any small business set-aside or subcontracting requirements. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting. Further investigation into the prime contractor's subcontracting plan would be necessary to assess any indirect benefits to small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which caps the government's liability. Transparency could be enhanced by publicly releasing the justification for the sole-source award and detailed performance metrics once the contract is underway. Inspector General involvement would be contingent on any reported issues of fraud, waste, or abuse.

Related Government Programs

Aviation Support Equipment
Ground Support Equipment
Department of Defense Procurement
Sole-Source Contracts
Aircraft Maintenance Equipment

Risk Flags

Sole-source award
High per-unit cost
Lack of competition justification
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.1 million to SUN TEST SYSTEMS, INC.. DELIVERY ORDER 0001 OF 20 AVIATION GROUND POWER UNITS

Who is the contractor on this award?

The obligated recipient is SUN TEST SYSTEMS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.1 million.

What is the period of performance?

Start: 2025-03-14. End: 2027-02-28.

What is the specific technical capability and justification for the sole-source award of these aviation ground power units?

The provided data does not detail the specific technical capabilities of the 20 aviation ground power units or the precise justification for the sole-source award. Typically, sole-source justifications are based on factors such as unique technical requirements, urgent and compelling needs where only one source can fulfill the requirement, or specific government property limitations. Without this information, it is impossible to fully assess the necessity of a sole-source approach or the appropriateness of the selected vendor. Further inquiry with the Department of the Army would be required to obtain the justification and technical specifications, which are crucial for understanding the value proposition and potential risks associated with this procurement.

How does the per-unit cost of approximately $1 million compare to industry benchmarks for similar aviation ground power units?

The per-unit cost of approximately $1,005,222 for each aviation ground power unit is exceptionally high and warrants significant scrutiny. Standard aviation ground power units, even those with advanced features, typically range from tens of thousands to a few hundred thousand dollars, depending on their power output, mobility, and specialized functions (e.g., for specific aircraft types like fighter jets or large transport planes). A cost exceeding $1 million per unit suggests either highly specialized, custom-built equipment with unique capabilities not commonly found in the market, or a significant potential for overpricing due to the sole-source nature of the award. A thorough market research report and comparison with similar procurements by other defense agencies or commercial aviation entities would be essential to validate this cost.

What are the potential risks associated with awarding a $20.1 million contract on a sole-source basis for critical aviation equipment?

The primary risk associated with a sole-source award of this magnitude is the potential for inflated pricing. Without competitive pressure, the vendor may not be incentivized to offer the lowest possible price, leading to increased costs for the government and taxpayers. Another significant risk is the lack of innovation; a competitive environment often fosters better solutions and technological advancements. Furthermore, reliance on a single source can create supply chain vulnerabilities. If the sole provider experiences production issues, financial instability, or decides to discontinue the product line, the Department of the Army could face significant operational disruptions and difficulties in finding an alternative supplier, especially given the specialized nature of aviation equipment.

What is the track record of SUN TEST SYSTEMS, INC. in delivering similar aviation ground power units or other defense contracts?

The provided data does not include information on the track record of SUN TEST SYSTEMS, INC. To assess the reliability and performance history of the contractor, a review of their past performance on federal contracts, particularly those involving aviation support equipment or similar complex systems, would be necessary. This would involve examining contract databases for past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. A strong track record of successful delivery and adherence to quality standards would mitigate some of the risks associated with a sole-source award, while a poor history would heighten concerns about the potential for cost overruns or delivery delays.

What are the performance expectations and key metrics for these aviation ground power units over the contract duration?

The provided data indicates a contract duration of 716 days (approximately 23.5 months) with a firm-fixed-price structure. However, it does not specify the key performance expectations or metrics for the aviation ground power units. Essential performance indicators would typically include reliability (e.g., Mean Time Between Failures - MTBF), power output stability and accuracy, operational temperature range, portability, ease of maintenance, and compliance with relevant military standards (e.g., MIL-STD). Without clearly defined performance metrics and associated quality assurance surveillance plans, it is difficult to objectively measure the contractor's success in delivering functional and effective equipment that meets the Army's operational needs.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT LAUNCHING, LANDING, GROUND HANDLING AND SERVICING EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2903 WALL TRIANA HWY SW, HUNTSVILLE, AL, 35824

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Self-Certified Small Disadvantaged Business, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $20,104,444

Exercised Options: $20,104,444

Current Obligation: $20,104,444

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ25D0019

IDV Type: IDC

Timeline