DoD awards $54.7M for aircraft parts, with limited competition and a high unit cost

Contract Overview

Contract Amount: $54,745,988 ($54.7M)

Contractor: Simmonds Precision Products Inc

Awarding Agency: Department of Defense

Start Date: 2010-06-29

End Date: 2011-06-03

Contract Duration: 339 days

Daily Burn Rate: $161.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER 0011

Place of Performance

Location: VERGENNES, ADDISON County, VERMONT, 05491

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $54.7 million to SIMMONDS PRECISION PRODUCTS INC for work described as: DELIVERY ORDER 0011 Key points: 1. The contract value of $54.7 million for aircraft parts suggests a significant procurement. 2. The 'NOT COMPETED' status raises concerns about potential overpayment and lack of market testing. 3. The contract duration of 339 days indicates a relatively short-term need for these parts. 4. The North American Industry Classification System (NAICS) code 336413 points to specialized manufacturing. 5. The contract was awarded as a Delivery Order under a larger agreement. 6. The absence of small business set-aside flags indicates this was not specifically targeted for small businesses.

Value Assessment

Rating: questionable

The total award of $54.7 million for aircraft parts requires further benchmarking against similar procurements. Without specific unit details or comparison data, assessing value for money is difficult. The fixed-firm price contract type suggests price certainty, but the lack of competition could have inflated the final cost. The high per-unit cost, if applicable, would be a significant concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a Delivery Order under a 'NOT COMPETED' status, indicating a sole-source or limited competition procurement. This approach bypasses the standard competitive bidding process, which typically ensures the government receives the best possible pricing and quality through market forces. The lack of multiple bidders means the government did not benefit from price discovery and potential innovation that a competitive environment fosters.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not be getting the most competitive price available in the market.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential aircraft parts. The services delivered are the manufacturing and supply of specialized aircraft components. The geographic impact is likely concentrated around military bases or maintenance facilities that utilize these aircraft. Workforce implications may include skilled manufacturing labor within the supplier's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices for taxpayers.
Limited transparency in the procurement process due to sole-source award.
Potential for vendor lock-in if this is a recurring need.
Difficulty in assessing true market value without competitive bids.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Awarded as a Delivery Order, suggesting it's part of a pre-existing framework.
The contractor, SIMMONDS PRECISION PRODUCTS INC, is likely experienced in this specialized manufacturing area.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high technological barriers to entry and specialized production capabilities. This contract falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' a segment that supports the broader aviation industry. Spending in this area is critical for maintaining military readiness and operational capabilities. Benchmarking would involve comparing this award to other sole-source or limited-competition contracts for similar aircraft components within the Department of Defense.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was either awarded to a large business or the specific requirements of the contract did not lend themselves to a small business set-aside. There is no information provided regarding subcontracting plans, so the impact on the small business ecosystem is currently unknown.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. As a Delivery Order, it likely operates under a larger contract vehicle with its own oversight provisions. Accountability measures would stem from the terms of the Delivery Order and the underlying contract. Transparency is limited due to the sole-source nature of the award, making detailed public scrutiny of the price discovery process challenging.

Related Government Programs

Department of Defense Aircraft Procurement
Aircraft Parts Manufacturing
Defense Logistics Agency Contracts
Military Aircraft Maintenance Support

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.7 million to SIMMONDS PRECISION PRODUCTS INC. DELIVERY ORDER 0011

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 $54.7 million.

What is the period of performance?

Start: 2010-06-29. End: 2011-06-03.

What is the specific type of aircraft parts being procured under this delivery order?

The provided data indicates the contract falls under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' While the specific part is not detailed, this classification suggests components such as engine parts, fuselage sections, landing gear, or other specialized auxiliary equipment for aircraft. Further investigation into the specific contract line items or the parent contract would be necessary to identify the exact parts being supplied.

What is the historical spending pattern for SIMMONDS PRECISION PRODUCTS INC with the Department of Defense?

To assess the historical spending pattern for SIMMONDS PRECISION PRODUCTS INC with the Department of Defense, one would need to query federal procurement databases for all contracts awarded to this entity. This would reveal the total value of contracts, the types of goods and services provided, the agencies involved, and the duration of their engagements. Without access to this broader dataset, it's impossible to determine if this $54.7 million award represents a typical engagement, a significant increase, or a decrease in their business with the DoD.

What are the risks associated with a 'NOT COMPETED' award for aircraft parts?

The primary risk associated with a 'NOT COMPETED' award for critical items like aircraft parts is the potential for inflated pricing. Without the pressure of competition, the sole-source provider may not offer the most cost-effective solution. This can lead to taxpayers overpaying for necessary equipment. Additionally, a lack of competition can stifle innovation and reduce the incentive for the contractor to improve efficiency or quality over time. It also raises concerns about transparency and fairness in the procurement process.

How does the unit cost of these aircraft parts compare to industry benchmarks?

The provided data does not include specific unit costs or quantities, making a direct comparison to industry benchmarks impossible. The total award is $54.7 million over 339 days. To perform a unit cost analysis, we would need to know the exact part number, the quantity procured, and the price per unit. This information would then be compared against publicly available pricing data for similar components, or against prices paid by other government agencies or commercial entities for the same or comparable parts.

What is the significance of the contract being awarded as a Delivery Order?

A Delivery Order (DO) is typically issued under a previously awarded Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar type of basic ordering agreement. This means that the terms, conditions, and often the pricing structure have been established in the parent contract. Awarding this as a DO suggests that SIMMONDS PRECISION PRODUCTS INC likely had a pre-existing contract vehicle with the Department of the Army. The 'NOT COMPETED' status likely applies to the decision to issue this specific DO, rather than the establishment of the parent contract itself, though the parent contract could also have been sole-sourced.

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: $54,745,988

Exercised Options: $54,745,988

Current Obligation: $54,745,988

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ08D0224

IDV Type: IDC

Timeline