DoD awards $55.4M for aircraft parts under sole-source contract, raising value-for-money questions

Contract Overview

Contract Amount: $55,410,000 ($55.4M)

Contractor: Simmonds Precision Products Inc

Awarding Agency: Department of Defense

Start Date: 2008-08-28

End Date: 2009-08-30

Contract Duration: 367 days

Daily Burn Rate: $151.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF IVHMS KITS AND GSE KITS UNDER THE FIVE YEAR IDIQ CONTRACT.

Place of Performance

Location: VERGENNES, ADDISON County, VERMONT, 05491

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $55.4 million to SIMMONDS PRECISION PRODUCTS INC for work described as: PROCUREMENT OF IVHMS KITS AND GSE KITS UNDER THE FIVE YEAR IDIQ CONTRACT. Key points: 1. Contract awarded without competition, potentially limiting price discovery and value. 2. Significant contract value for a single delivery order under an IDIQ. 3. Focus on aircraft parts suggests a critical but potentially niche defense need. 4. Limited duration of the delivery order (approx. 1 year) may indicate urgent or specific requirements. 5. The 'Not Competed' status warrants scrutiny regarding justification and alternatives. 6. Contractor's previous awards and performance history would be key to assessing value. 7. The specific nature of 'IVHMS KITS AND GSE KITS' requires understanding to gauge necessity.

Value Assessment

Rating: questionable

The contract value of $55.4 million for a single delivery order under an IDIQ is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition raises concerns about whether the government secured the best possible value. Further analysis would require understanding the specific components of the IVHMS and GSE kits and comparing their costs to industry standards or previous government procurements of similar items.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly marked as 'Not Competed,' indicating a sole-source award. The justification for this approach is not provided in the data. A sole-source award means only one vendor was considered, bypassing the standard competitive bidding process. This significantly limits the opportunity for price negotiation and may lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium for goods and services, as the lack of competition removes the incentive for vendors to offer their most competitive pricing.

Public Impact

The primary beneficiaries are likely entities within the Department of the Army requiring specific aircraft maintenance and operational support equipment. The contract delivers IVHMS (Integrated Vehicle Health Management System) kits and GSE (Ground Support Equipment) kits, crucial for aircraft maintenance and readiness. The geographic impact is likely concentrated around Army aviation facilities where these kits are deployed. Workforce implications may include specialized technicians for the installation and maintenance of these kits, though the primary impact is on equipment availability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant dollar amount raises concerns about potential overpayment.
The 'Not Competed' status requires a strong justification to ensure taxpayer funds are used efficiently.
Without competitive data, assessing the true market value of these specialized kits is challenging.

Positive Signals

The contract addresses specific needs for aircraft maintenance (IVHMS and GSE kits), indicating a focus on operational readiness.
Awarding under an existing IDIQ suggests a pre-established relationship and potentially streamlined procurement for known requirements.
The firm fixed-price contract type provides cost certainty for this delivery order.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for specialized aviation components like IVHMS and GSE kits is often characterized by high technical barriers to entry and a limited number of qualified suppliers. Comparable spending benchmarks would involve analyzing other DoD procurements for similar maintenance and support equipment, considering the specialized nature of the items.

Small Business Impact

The data indicates that small business participation was not a factor in this specific award (ss: false, sb: false). As a sole-source contract, there were likely no subcontracting opportunities set aside for small businesses unless explicitly mandated by the prime contractor or agency for specific components not covered by the primary award. This contract does not appear to contribute to the small business ecosystem through set-asides.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded in the contract terms, including delivery schedules and quality standards. Transparency is limited due to the sole-source nature; however, contract award data is generally made public. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Aircraft Maintenance Contracts
Integrated Vehicle Health Management Systems
Ground Support Equipment Procurement
Army Aviation Readiness Programs
Sole-Source Defense Procurements

Risk Flags

Sole-source award without clear justification.
Potential for inflated pricing due to lack of competition.
Limited transparency into the procurement decision.
Need for detailed performance data to assess value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.4 million to SIMMONDS PRECISION PRODUCTS INC. PROCUREMENT OF IVHMS KITS AND GSE KITS UNDER THE FIVE YEAR IDIQ CONTRACT.

Who is the contractor on this award?

The obligated recipient is SIMMONDS PRECISION PRODUCTS 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 $55.4 million.

What is the period of performance?

Start: 2008-08-28. End: 2009-08-30.

What is the specific justification provided by the Department of the Army for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements require a formal justification and approval (J&A) document outlining why competition is not feasible or advantageous. Reasons can include unique capabilities of a single source, urgent and compelling needs where only one source can meet the requirement, or specific circumstances where only one responsible source exists. Without the J&A, it is impossible to assess the validity of the sole-source determination and whether it truly served the government's best interest.

How does the $55.4 million value of this delivery order compare to other IVHMS and GSE kit procurements by the Department of the Army?

Direct comparison is challenging without access to detailed historical procurement data for similar IVHMS and GSE kits. However, $55.4 million is a substantial amount for a single delivery order, especially considering its relatively short duration (approx. 1 year). This suggests either a large quantity of kits, highly complex or expensive components, or a significant price premium due to the lack of competition. Benchmarking against other sole-source awards for specialized aerospace components could provide some context, but a true value assessment would require comparing it to competitively procured similar items, if available.

What is the track record of Simmonds Precision Products Inc. in fulfilling similar defense contracts, particularly sole-source awards?

The provided data does not detail Simmonds Precision Products Inc.'s track record. A comprehensive assessment would require reviewing their past performance ratings, contract history, and any past issues or successes with the Department of Defense or other federal agencies. Understanding their experience with sole-source awards, their ability to deliver on time and within budget, and the quality of their products is crucial for evaluating the risk associated with this contract. Information on past performance is often available through government contract databases like the Federal Procurement Data System (FPDS).

What are the specific components and functionalities of the IVHMS and GSE kits being procured, and how critical are they to Army aviation operations?

IVHMS kits are designed to monitor the health and performance of aircraft systems, providing diagnostic information to maintenance crews and potentially predicting failures. GSE kits refer to ground support equipment essential for the operation, maintenance, and servicing of aircraft on the ground. Both are critical for ensuring aircraft readiness, safety, and efficient maintenance operations. The specific components and functionalities would depend on the aircraft platforms they are intended for. Their criticality underscores the need for reliable supply, but also highlights the importance of ensuring value and availability through effective procurement strategies.

What is the historical spending trend for IVHMS and GSE kits by the Department of the Army over the past five years?

The provided data only pertains to a single delivery order under a five-year IDIQ contract initiated around August 2008. It does not offer historical spending trends for IVHMS and GSE kits. To analyze historical spending, one would need to aggregate data on all contracts awarded for these types of kits by the Army over several fiscal years. This would involve searching procurement databases for relevant product service codes (PSCs) and keywords, and then analyzing the total obligated amounts, number of awards, and competition levels over time.

Given the sole-source nature, what mechanisms are in place to ensure the contractor maintains competitive pricing and quality throughout the IDIQ contract's life?

While this specific delivery order was sole-source, the overarching IDIQ contract might have provisions for future competition or price adjustments. However, for a sole-source award, the primary mechanisms rely on the initial negotiation, contract clauses that allow for price reviews or audits, and the government's ability to exercise options or place future orders. The contracting officer's vigilance in monitoring performance, costs, and market conditions is paramount. If the IDIQ allows for future delivery orders to be competed, that would be a key mechanism. Otherwise, the government relies heavily on the initial justification and the contractor's good faith.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: 100 PANTON RD, VERGENNES, VT, 05491

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: $55,410,000

Exercised Options: $55,410,000

Current Obligation: $55,410,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ08D0224

IDV Type: IDC

Timeline