DoD's $218M contract for aircraft spares awarded to Modern Technologies Corporation shows potential value concerns

Contract Overview

Contract Amount: $21,841,191 ($21.8M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of Defense

Start Date: 2003-05-30

End Date: 2024-01-26

Contract Duration: 7,546 days

Daily Burn Rate: $2.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200308!000796!5700!GJ70 !WARNER ROBINS ALC/LVK !F0960301D0209 !A!N! !N!0022 !20030530!20080131!122525991!122525991!110341133!N!MODERN TECHNOLOGIES CORPORATIO!4032 LINDEN AVENUE !DAYTON !OH!45432!21000!113!39!DAYTON !MONTGOMERY !OHIO !+000010238697!N!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !3AHL!HH-53 SUPER JOLLY !336413!E! !5!B!M! !A!C!20070928!B! ! !A! !A!N!J!2!010!B! !A!N!A! ! !N!B!N!N! ! !D! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: BETHPAGE, NASSAU County, NEW YORK, 11714

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $21.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: 200308!000796!5700!GJ70 !WARNER ROBINS ALC/LVK !F0960301D0209 !A!N! !N!0022 !20030530!20080131!122525991!122525991!110341133!N!MODERN TECHNOLOGIES CORPORATIO!4032 LINDEN AVENUE !DAYTON !OH!45432!21000!113!39!DAYTON !MONTG… Key points: 1. The contract's duration of over 20 years and significant value raise questions about cost-effectiveness. 2. Limited competition data available for this contract makes it difficult to assess market dynamics. 3. The contract's long lifespan could indicate potential risks related to technological obsolescence or changing requirements. 4. Performance context is limited, making it hard to gauge the contractor's effectiveness over the contract's extensive period. 5. This contract falls within the Defense sector, specifically supporting aircraft airframes and spares. 6. The absence of small business set-asides suggests a focus on larger prime contractors.

Value Assessment

Rating: questionable

The total contract value of $218 million over nearly 21 years suggests an average annual spend of approximately $10.4 million. Without specific performance metrics or comparable contract data, it is challenging to definitively assess value for money. The extended duration could imply a stable, long-term need, but also raises concerns about potential overpricing due to lack of competitive pressure over time. Benchmarking against similar long-term sustainment contracts for aircraft components would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the number of bidders and the specific details of the competition are not fully detailed in the provided data. A full and open competition is generally favorable for price discovery, but the long duration of this contract might have influenced the bidding landscape, potentially leading to fewer competitive bids over its lifespan.

Taxpayer Impact: A full and open competition is positive for taxpayers as it theoretically drives down costs through market forces. However, the extended period of performance for this contract could diminish the long-term benefits of initial competition if subsequent modifications or renewals are not competitively re-evaluated.

Public Impact

The primary beneficiaries are likely entities within the Department of Defense requiring aircraft rotary wing components and spares. The contract delivers essential parts and services for maintaining the operational readiness of specific aircraft, such as the HH-53 Super Jolly. Geographic impact is likely concentrated around military bases and maintenance facilities that operate the supported aircraft. Workforce implications may include jobs in manufacturing, logistics, and technical support related to aircraft component sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (nearly 21 years) increases risk of cost escalation and potential for outdated technology.
Lack of detailed performance data makes it difficult to assess contractor efficiency and value delivery over time.
Limited information on competition dynamics beyond 'full and open' hinders a thorough assessment of price reasonableness.
The contract's focus on specific aircraft parts (HH-53 Super Jolly) may limit its applicability to broader defense needs.

Positive Signals

Awarded under full and open competition, suggesting an initial effort to secure competitive pricing.
The contract's long duration indicates a sustained and critical need for these aircraft components.
The contract is managed by the Defense Contract Management Agency, implying a level of oversight.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and sustainment. The market for aircraft spares is substantial, driven by the operational needs of military branches. Contracts of this nature are crucial for maintaining fleet readiness and can involve complex supply chains. Comparable spending benchmarks would typically involve analyzing other long-term sustainment contracts for similar military aircraft platforms, considering factors like fleet size, operational tempo, and component criticality.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contractor, Modern Technologies Corporation, is likely a large business. The absence of small business set-asides means that opportunities for subcontracting to small businesses may exist but are not mandated by the contract's prime award structure. The impact on the small business ecosystem would depend on the prime contractor's subcontracting plans and the availability of qualified small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract is provided by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would typically involve performance reviews, delivery schedules, and quality control processes outlined in the contract. Transparency is facilitated through contract databases like FPDS, which provide basic award information. The Inspector General's office within the Department of Defense would have jurisdiction over any investigations into fraud, waste, or abuse related to this contract.

Related Government Programs

Aircraft Parts and Components
Aviation Sustainment Services
Defense Logistics Support
Rotary Wing Aircraft Maintenance
Military Aircraft Spares Procurement

Risk Flags

Long contract duration
Limited performance data
Potential for cost escalation
Lack of detailed competition analysis

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.8 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. 200308!000796!5700!GJ70 !WARNER ROBINS ALC/LVK !F0960301D0209 !A!N! !N!0022 !20030530!20080131!122525991!122525991!110341133!N!MODERN TECHNOLOGIES CORPORATIO!4032 LINDEN AVENUE !DAYTON !OH!45432!21000!113!39!DAYTON !MONTGOMERY !OHIO !+000010238697!N!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !3AHL!HH-53 SUPER JOLLY !336413!E! !5!B!M! !A!C!20070928!B

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES 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 $21.8 million.

What is the period of performance?

Start: 2003-05-30. End: 2024-01-26.

What is the track record of Modern Technologies Corporation with similar long-term defense contracts?

Information regarding Modern Technologies Corporation's specific track record with similar long-term defense contracts is not detailed in the provided data snippet. To assess their performance, one would need to examine their contract history, including past performance evaluations, any contract disputes or terminations, and their success in delivering similar goods or services over extended periods. A review of their financial stability and capacity to manage large, long-duration contracts would also be crucial. Without this historical context, it's difficult to gauge their reliability and efficiency for this specific $218 million award.

How does the per-unit cost of the aircraft spares compare to market rates or similar government contracts?

The provided data does not include specific per-unit cost information for the aircraft spares. The total contract value of $218 million is for a broad scope of 'Aircraft Rotary Wing' and 'Airframes and Spares' over a long duration. To perform a per-unit cost comparison, detailed line-item pricing for individual parts or services would be required. This would then need to be benchmarked against publicly available pricing for similar components from other government contracts or commercial suppliers. Without this granular data, assessing the reasonableness of per-unit costs is not possible.

What are the primary risks associated with a contract of this duration (nearly 21 years)?

The primary risks associated with a contract spanning nearly 21 years include technological obsolescence, where the supplied parts or technology may become outdated before the contract ends. There's also a significant risk of cost escalation due to inflation, changes in material costs, or unforeseen production challenges over such an extended period. Furthermore, the government's requirements might evolve, making the original scope of work less relevant or necessitating costly modifications. Contractor performance can also degrade over time, and managing such a long-term relationship requires continuous oversight to ensure continued value and compliance.

How effective has the 'full and open competition' been in ensuring competitive pricing over the contract's lifecycle?

The effectiveness of 'full and open competition' in ensuring competitive pricing over the contract's lifecycle is difficult to ascertain solely from the award data. While the initial award suggests a competitive process, the contract's nearly 21-year duration means that pricing could be influenced by subsequent modifications, sole-source extensions, or a lack of ongoing competitive pressure if the initial competition did not lock in favorable long-term rates. To assess long-term effectiveness, one would need to analyze the pricing of any contract modifications and compare the overall cost trajectory to market benchmarks over time.

What is the historical spending pattern for aircraft rotary wing spares within the Department of Defense?

Historical spending patterns for aircraft rotary wing spares within the Department of Defense are substantial and ongoing, reflecting the continuous need to maintain operational readiness across various aircraft fleets. While this specific contract represents a significant single award, it is part of a much larger ecosystem of spending on aviation sustainment. DoD spending in this category fluctuates based on modernization programs, operational tempo, and the age of aircraft fleets. Analyzing aggregate spending data over multiple fiscal years would reveal trends in demand, key suppliers, and the overall investment in maintaining rotary-wing aviation capabilities.

Are there any specific performance metrics or Key Performance Indicators (KPIs) associated with this contract?

The provided data snippet does not detail specific performance metrics or Key Performance Indicators (KPIs) associated with this contract. Typically, such metrics would be outlined in the contract's statement of work or performance work statement. These KPIs are crucial for evaluating the contractor's adherence to quality standards, delivery timelines, and overall effectiveness. Without access to these specific performance requirements, a thorough assessment of the contractor's success in meeting the government's needs is limited.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 520 GAITHER RD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F0960301D0209

IDV Type: IDC

Timeline