DoD's $255M contract with Rockwell Collins for communications equipment shows strong competition and value

Contract Overview

Contract Amount: $255,377,180 ($255.4M)

Contractor: Rockwell Collins, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-06-23

End Date: 2012-06-30

Contract Duration: 2,564 days

Daily Burn Rate: $99.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200509!000170!5700!FA8726!ESC/NIK !FA872605D0003 !A!N! !N!0001 ! !20050623!20100228!060605883!962960589!962960589!N!ROCKWELL COLLINS, INC !400 COLLINS RD NE !CEDAR RAPIDS !IA!52498!12000!113!19!CEDAR RAPIDS !LINN !IOWA !+000009900000!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334220!E! !5!B!S! ! ! !20200930!B!D! !A! !A!N!R!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498, UNITED STATES OF AMERICA

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $255.4 million to ROCKWELL COLLINS, INC. for work described as: 200509!000170!5700!FA8726!ESC/NIK !FA872605D0003 !A!N! !N!0001 ! !20050623!20100228!060605883!962960589!962960589!N!ROCKWELL COLLINS, INC !400 COLLINS RD NE !CEDAR RAPIDS !IA!52498!12000!113!19!CEDAR RAPIDS !LINN… Key points: 1. Contract awarded under full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar contracts and market rates. 3. The contract's duration and value suggest a significant, long-term need for these services. 4. Performance risk appears managed, with no immediate red flags noted. 5. This contract positions Rockwell Collins as a key supplier within the defense communications sector. 6. The use of a Cost Plus Award Fee (CPA) structure incentivizes performance and cost control.

Value Assessment

Rating: good

The total contract value of $255,037,718.04 over approximately 7 years suggests a substantial investment. Benchmarking against similar contracts for advanced communications equipment is challenging due to the specialized nature of the components. However, the relatively low number of modifications and the competitive award process imply that the pricing was likely fair at the time of award. The Cost Plus Award Fee (CPA) structure allows for flexibility while incentivizing contractor performance, which can lead to good value if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of two bids indicates a degree of competition, which is generally positive for price discovery and ensuring the government receives competitive offers. While two bidders are better than one, a higher number of bidders could potentially drive prices down further.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality goods and services.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical communications equipment. Services delivered include the provision of miscellaneous communication equipment, vital for military operations. The geographic impact is primarily within the United States, supporting defense infrastructure. Workforce implications include jobs supported at Rockwell Collins and its subcontractors, particularly in Iowa.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if not closely monitored.
Reliance on a single primary contractor, Rockwell Collins, could pose supply chain risks.
The long duration of the contract may lead to technology obsolescence if not managed proactively.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive process.
The use of an award fee structure incentivizes contractor performance and efficiency.
Rockwell Collins is a well-established defense contractor with a track record in communications systems.
The contract was awarded early in the period of performance, indicating timely procurement.

Sector Analysis

This contract falls within the broader electronics and communication equipment manufacturing sector, specifically North American Industry Classification System (NAICS) code 334220. This sector is characterized by rapid technological advancement and significant government procurement, particularly from defense agencies. The market size for defense-related communications equipment is substantial, with numerous players vying for contracts. Rockwell Collins, now part of Collins Aerospace, is a major incumbent in this space, competing with other large aerospace and defense firms.

Small Business Impact

This contract does not appear to have a specific small business set-aside. However, large prime contractors like Rockwell Collins are often required to meet small business subcontracting goals. The extent to which small businesses will participate as subcontractors on this contract is not detailed in the provided data, but it represents an opportunity for them to engage with a major defense supplier.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms and performance standards. The Cost Plus Award Fee structure implies performance metrics that are monitored to determine award fees. Transparency is generally maintained through contract databases like FPDS, although detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Electronic Warfare Equipment
Avionics Systems
Tactical Data Links
Satellite Communications

Risk Flags

Cost Plus Award Fee structure requires diligent oversight to ensure cost control.
Long contract duration may pose risks of technology obsolescence.
Dependence on a single prime contractor could create supply chain vulnerabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $255.4 million to ROCKWELL COLLINS, INC.. 200509!000170!5700!FA8726!ESC/NIK !FA872605D0003 !A!N! !N!0001 ! !20050623!20100228!060605883!962960589!962960589!N!ROCKWELL COLLINS, INC !400 COLLINS RD NE !CEDAR RAPIDS !IA!52498!12000!113!19!CEDAR RAPIDS !LINN !IOWA !+000009900000!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334220!E! !5!B!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is ROCKWELL COLLINS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $255.4 million.

What is the period of performance?

Start: 2005-06-23. End: 2012-06-30.

What is Rockwell Collins' track record with similar DoD contracts?

Rockwell Collins (now part of Collins Aerospace) has a long history of supplying complex electronic systems, including communications, navigation, and avionics equipment, to the Department of Defense and other government agencies. They have been a significant player in defense contracting for decades, often securing large, multi-year awards for critical systems. Their track record generally includes successful delivery of sophisticated technology, though like any large contractor, they have faced scrutiny on specific programs regarding cost and schedule. This particular contract, awarded in 2005, aligns with their core competencies in communication systems.

How does the $255M value compare to other DoD communications equipment contracts?

A contract value of approximately $255 million over seven years for specialized communications equipment is substantial but not extraordinary within the context of large defense procurements. The DoD regularly awards contracts in the hundreds of millions, and sometimes billions, for major systems. For instance, contracts for fighter jets, ships, or large-scale IT infrastructure often dwarf this amount. However, for a specific category like 'Miscellaneous Communication Equipment,' this represents a significant investment, likely for a critical capability or a large fleet-wide upgrade, placing it in the upper tier for such specific equipment procurements.

What are the primary risks associated with this type of Cost Plus Award Fee (CPA) contract?

The primary risks with CPA contracts revolve around cost control and defining objective performance metrics. For the government, there's a risk that costs could escalate beyond initial projections if the award fee criteria are not stringent or if contractor inefficiencies are not adequately penalized. Contractors face the risk of not achieving the highest award fees if performance targets are missed. Effective management by the contracting officer and technical team is crucial to mitigate these risks, ensuring that the award fee truly reflects exceptional performance and that costs remain reasonable for the level of service provided.

How effective has the competition level been in ensuring value for taxpayers?

The contract was awarded under 'full and open competition' with two bidders. While this indicates a competitive process, the value derived by taxpayers is influenced by the number of bidders and the structure of the competition. Two bidders suggest a moderate level of competition. If the market could support more bidders, the value might have been enhanced further. However, full and open competition itself is a positive indicator for taxpayer value, as it allows the government to solicit offers from all qualified sources, theoretically leading to the best available price and performance.

What is the typical lifecycle cost for such communication equipment, and how does this contract fit?

The lifecycle cost for specialized military communication equipment can be significantly higher than the initial procurement cost, encompassing sustainment, upgrades, training, and eventual disposal. This $255 million contract likely covers the initial procurement and possibly some initial sustainment or integration. The contract's duration (2005-2010, with potential extensions implied by the award amount) suggests it was intended to cover a significant portion of the equipment's operational life. However, without details on sustainment and upgrade clauses, it's difficult to assess the full lifecycle cost impact. Future contracts would likely be needed for long-term support and modernization.

How has spending in the 'Miscellaneous Communication Equipment' category evolved since this contract?

Spending in the 'Miscellaneous Communication Equipment' category (NAICS 334220) has likely fluctuated significantly since this contract was awarded in 2005. Factors such as evolving military requirements, technological advancements (e.g., shift towards networked systems, cybersecurity needs), and overall defense budgets influence spending patterns. While this specific contract represents a large single award, overall trends would depend on broader DoD modernization efforts and strategic priorities. Data from subsequent years would be needed to analyze the evolution of spending in this specific category.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 52498

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: FA872605D0003

IDV Type: IDC

Timeline