DoD awards $14M+ for aircraft engine parts, raising questions about competition and value

Contract Overview

Contract Amount: $14,011,230 ($14.0M)

Contractor: Hamilton Sundstrand Corporation

Awarding Agency: Department of Defense

Start Date: 2008-08-19

End Date: 2011-03-25

Contract Duration: 948 days

Daily Burn Rate: $14.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AFCC DELIVERY ORDER 0002

Place of Performance

Location: WINDSOR LOCKS, HARTFORD County, CONNECTICUT, 06096

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to HAMILTON SUNDSTRAND CORPORATION for work described as: AFCC DELIVERY ORDER 0002 Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant duration of the contract (948 days) suggests a long-term need for these parts. 3. The award falls under Aircraft Engine and Engine Parts Manufacturing, a critical defense sector. 4. Lack of competition may indicate limited market availability or strategic sourcing decisions. 5. Performance period spans over two years, requiring sustained oversight. 6. The firm-fixed-price structure aims to control costs, but the absence of competition is a concern.

Value Assessment

Rating: questionable

Benchmarking the value of this delivery order is challenging due to the sole-source nature and lack of comparable bids. The $14 million award for aircraft engine parts suggests a significant procurement. Without competitive bids, it's difficult to definitively assess if the pricing is optimal or if it aligns with market rates for similar components. The firm-fixed-price contract type offers some cost certainty, but the absence of competition prevents a robust value-for-money assessment against alternative suppliers or proposals.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. 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 opportunity for price negotiation or comparison among different suppliers, potentially leading to higher costs for the government than if the contract had been competed.

Taxpayer Impact: Taxpayers may have paid a premium for these aircraft engine parts due to the absence of competitive pressure to drive down prices. The government missed an opportunity to leverage market forces for cost savings.

Public Impact

The primary beneficiaries are the Department of Defense and its aviation units, ensuring operational readiness of aircraft. Services delivered include the provision of critical aircraft engine and engine parts. The geographic impact is likely focused on military bases and operational theaters where these aircraft are deployed. Workforce implications may include support for specialized manufacturing and maintenance personnel within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value assessment.
Lack of transparency in the selection process due to non-competitive nature.
Potential for cost overruns if pricing was not adequately scrutinized without competition.

Positive Signals

Firm-fixed-price contract provides cost certainty for the awarded amount.
Procurement addresses a specific need for critical aircraft engine parts.
Contract duration allows for sustained supply chain support.

Sector Analysis

This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector (NAICS 336412). This industry is characterized by high technological barriers to entry, stringent quality control requirements, and significant R&D investment. The market is often dominated by a few large, specialized manufacturers due to the complexity and safety-critical nature of aerospace components. Government contracts, particularly for defense, represent a substantial portion of demand in this sector.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. The sole-source nature further reduces the likelihood of subcontracting opportunities for small businesses unless explicitly mandated or initiated by the prime contractor. The impact on the small business ecosystem is minimal for this specific award, as it bypassed standard competitive channels where small businesses might have participated.

Oversight & Accountability

Oversight for this delivery order 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 obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source award; however, contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Manufacturing
Defense Procurement
Engine Component Supply

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for non-optimal pricing
Limited transparency in award process

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to HAMILTON SUNDSTRAND CORPORATION. AFCC DELIVERY ORDER 0002

Who is the contractor on this award?

The obligated recipient is HAMILTON SUNDSTRAND 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 $14.0 million.

What is the period of performance?

Start: 2008-08-19. End: 2011-03-25.

What is the track record of Hamilton Sundstrand Corporation with the Department of Defense for similar aircraft engine parts?

Hamilton Sundstrand Corporation, now part of RTX (formerly Raytheon Technologies), has a long-standing history of supplying aerospace components, including engines and engine parts, to the U.S. military. They are a major contractor for various defense platforms. Analyzing their past performance on similar sole-source or competitively awarded contracts for engine parts would provide insight into their reliability, quality, and pricing consistency. Historical data might reveal patterns of cost overruns or efficiencies, which are crucial for assessing the value of this specific $14 million delivery order. Without access to detailed historical performance metrics and pricing comparisons for prior contracts, a definitive assessment remains challenging.

How does the $14 million award compare to the typical market price for these specific aircraft engine parts?

Determining the precise market price for specialized aircraft engine parts is complex, especially when a contract is awarded sole-source. The $14 million figure represents the total value of the delivery order over its 948-day period. To benchmark this, one would need to identify the specific parts, their quantities, and compare them against catalog prices, previous government contracts for the same or similar parts, or quotes from other potential suppliers if available. Given the sole-source nature, direct market price comparison is difficult. However, if historical data from competitive bids for similar components exists, it could serve as a proxy. The absence of competition inherently limits the ability to confirm if this price reflects optimal market value or a premium.

What are the primary risks associated with a sole-source award for critical defense components?

The primary risks associated with a sole-source award for critical defense components like aircraft engine parts include inflated pricing due to lack of competition, reduced incentive for innovation from the sole provider, and potential supply chain vulnerabilities if that single source faces production issues or financial instability. For taxpayers, the risk is paying more than necessary. For the military, the risk is a disruption in the supply of essential parts, potentially impacting aircraft readiness. Furthermore, sole-source contracts can sometimes mask inefficiencies or a lack of strategic sourcing by the procuring agency, as the justification for not competing the award needs to be robust.

What is the expected effectiveness of this contract in ensuring aircraft engine part availability for the Department of the Army?

The effectiveness of this contract in ensuring aircraft engine part availability hinges on the contractor's ability to deliver the specified parts on time and to the required quality standards throughout the contract period. The firm-fixed-price structure and the substantial award amount suggest a commitment to securing these parts. However, the sole-source nature means the Army is reliant on Hamilton Sundstrand Corporation. Its effectiveness will be measured by the actual delivery performance against the contract schedule and the impact on aircraft operational readiness. Without competitive alternatives, the Army's leverage to ensure timely delivery or address performance issues is somewhat constrained compared to a competed contract.

How has historical spending on aircraft engine parts by the Department of Defense trended, and does this award align with those patterns?

Historical spending on aircraft engine parts by the Department of Defense is substantial, reflecting the high cost and critical nature of maintaining military aviation fleets. Spending trends are influenced by factors such as the number of aircraft in service, their age, operational tempo, and technological upgrades. This $14 million delivery order, awarded in 2008 for a period extending into 2011, represents a specific procurement within a broader, ongoing spending pattern. Analyzing aggregate spending data for NAICS code 336412 or specific engine programs would reveal if this award is consistent with overall trends. However, the sole-source nature of this particular award makes it an outlier compared to potentially more competitively sourced procurements within the larger spending picture.

Industry Classification

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

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 1 HAMILTON RD, WINDSOR LOCKS, CT, 06096

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,011,230

Exercised Options: $14,011,230

Current Obligation: $14,011,230

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T08DB411

IDV Type: IDC

Timeline