DoD's $61.1M aircraft parts contract awarded to Gulfstream Aerospace Corp. lacked competition

Contract Overview

Contract Amount: $87,937,974 ($87.9M)

Contractor: Gulfstream Aerospace Corporation

Awarding Agency: Department of Defense

Start Date: 2003-11-21

End Date: 2006-12-29

Contract Duration: 1,134 days

Daily Burn Rate: $77.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200403!000018!5700!GU04 !ASC/GR !F3365702D2011 !A!N! !N!0031 ! !20031121!20041231!611792912!611792912!001381284!N!GULFSTREAM AEROSPACE CORP !500 GULFSTREAM ROAD, M/S B!SAVANNAH !GA!31407!69000!051!13!SAVANNAH !CHATHAM !GEORGIA !+000084133017!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!S! ! ! !99990909!B! ! !N!Z!D!N!J!1!001!N!1A!Z!N!Z! ! !Y!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SAVANNAH, CHATHAM County, GEORGIA, 31408

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $87.9 million to GULFSTREAM AEROSPACE CORPORATION for work described as: 200403!000018!5700!GU04 !ASC/GR !F3365702D2011 !A!N! !N!0031 ! !20031121!20041231!611792912!611792912!001381284!N!GULFSTREAM AEROSPACE CORP !500 GULFSTREAM ROAD, M/S B!SAVANNAH !GA!31407!69000!051!13!SAVANNAH !CHAT… Key points: 1. The contract awarded to Gulfstream Aerospace Corp. for aircraft parts was not competed, raising questions about potential overpayment and value for money. 2. Lack of competition suggests potential for higher prices than if multiple vendors had bid. 3. The contract's duration of over three years and significant value indicate a substantial commitment by the Department of Defense. 4. The specific parts procured fall under the 'Aircraft Fixed Wing' and 'Airframes and Spares' categories, crucial for aviation readiness. 5. The award to a single, established manufacturer like Gulfstream may indicate a reliance on specialized or proprietary components. 6. Performance context is limited due to the non-competitive nature, making it difficult to assess efficiency or effectiveness against market alternatives.

Value Assessment

Rating: questionable

The total award value of $61.1 million for aircraft parts over approximately three years warrants scrutiny due to the lack of competitive bidding. Without a competitive process, it is difficult to benchmark the pricing against market rates or compare it to similar contracts awarded through open competition. This non-competitive award raises concerns about whether the government secured the best possible price and value for these essential aircraft components. Further analysis would be needed to determine if the price paid was reasonable in the absence of market-driven price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that the Department of Defense did not benefit from the price reductions and innovation that can arise from multiple bidders vying for the contract. This approach limits the government's ability to explore alternative solutions or negotiate more favorable terms.

Taxpayer Impact: Taxpayers may have paid a premium for these aircraft parts due to the absence of competitive pressure. The government's negotiating position is weakened when there is no alternative supplier to compare pricing against.

Public Impact

The primary beneficiaries are likely military aviation units relying on Gulfstream aircraft for operational readiness. The contract delivers essential aircraft parts, including airframes and spares, ensuring the continued functionality of fixed-wing aircraft. The geographic impact is centered around the Department of Defense's aviation maintenance and logistics operations, with potential downstream effects on bases utilizing these aircraft. The contract supports the workforce at Gulfstream Aerospace Corporation and its supply chain, maintaining jobs in aerospace manufacturing and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source awards can reduce transparency and accountability in government spending.
Dependence on a single supplier can create supply chain risks.
Difficulty in assessing true market value without competitive bids.

Positive Signals

Award to a known and established manufacturer like Gulfstream suggests a level of reliability and quality.
Ensures the availability of critical parts for specific aircraft platforms, supporting operational readiness.
Contract provides a stable demand for the contractor, supporting their manufacturing capabilities.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. Contracts for aircraft parts, especially for specialized platforms like those likely manufactured by Gulfstream, often involve proprietary technology and stringent quality requirements. This contract fits within the 'Aircraft Fixed Wing' and 'Airframes and Spares' sub-sector, which is critical for maintaining military aviation fleets. Spending in this area is substantial, driven by the need for continuous modernization and operational readiness. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar aircraft components across different branches of the military.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded directly to Gulfstream Aerospace Corporation, a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The lack of a set-aside suggests that opportunities for small businesses to participate in this specific contract may be limited, unless they are part of Gulfstream's broader supply chain. Further investigation into Gulfstream's subcontracting practices would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the contract terms, though the lack of competition limits the ability to hold the contractor accountable to market-based pricing. Transparency is somewhat limited due to the sole-source nature, but contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Military Aviation Maintenance and Repair
Aerospace Parts Manufacturing
Defense Logistics Agency Contracts
Air Force Aircraft Sustainment
Navy Aviation Support

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Limited transparency in cost justification
Risk of vendor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $87.9 million to GULFSTREAM AEROSPACE CORPORATION. 200403!000018!5700!GU04 !ASC/GR !F3365702D2011 !A!N! !N!0031 ! !20031121!20041231!611792912!611792912!001381284!N!GULFSTREAM AEROSPACE CORP !500 GULFSTREAM ROAD, M/S B!SAVANNAH !GA!31407!69000!051!13!SAVANNAH !CHATHAM !GEORGIA !+000084133017!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!S! ! ! !999

Who is the contractor on this award?

The obligated recipient is GULFSTREAM AEROSPACE CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $87.9 million.

What is the period of performance?

Start: 2003-11-21. End: 2006-12-29.

What is Gulfstream Aerospace Corporation's track record with the federal government, particularly in fulfilling aircraft parts contracts?

Gulfstream Aerospace Corporation has a significant history of contracting with the U.S. federal government, primarily the Department of Defense, for aircraft and related parts. Their track record generally reflects a capability to produce and deliver high-quality aerospace components. However, the specific performance metrics for this $61.1 million contract, awarded non-competitively, are not detailed here. While Gulfstream is a reputable manufacturer, the absence of competition makes it challenging to assess their performance against potential alternatives or to determine if the pricing was optimized through a competitive process. Historical data on other Gulfstream contracts, especially those awarded competitively, would provide a more robust comparison point for evaluating their overall value proposition to the government.

How does the $61.1 million value of this contract compare to similar aircraft parts procurements by the DoD?

Direct comparison of this $61.1 million contract is difficult without knowing the specific types and quantities of aircraft parts procured. However, as a sole-source award, its value is inherently less benchmarkable than a competitively awarded contract. Typically, the DoD procures aircraft parts through various mechanisms, including competitive bids for common parts and sole-source awards for specialized or proprietary components. If this contract covers a broad range of common parts, $61.1 million over three years might be considered high without competitive pressure. Conversely, if it involves highly specialized or custom-manufactured components unique to specific Gulfstream aircraft platforms, the value might be more justifiable, though still subject to price reasonableness checks. Analyzing other sole-source awards for similar high-value, specialized parts could offer some context.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a $61.1 million contract on a sole-source basis include potential overpayment due to the lack of price competition, reduced incentive for the contractor to innovate or offer cost efficiencies, and increased vulnerability to supply chain disruptions if the sole provider faces issues. There's also a risk of vendor lock-in, making it difficult and costly to switch suppliers in the future. Furthermore, the lack of transparency inherent in sole-source awards can obscure potential inefficiencies or questionable pricing strategies. The government's negotiating power is significantly diminished, potentially leading to less favorable terms and conditions compared to a competitive environment. Ensuring fair and reasonable pricing requires rigorous justification and oversight in such cases.

What is the expected program effectiveness or outcome for this contract, given its non-competitive nature?

The expected program effectiveness for this contract is primarily centered on ensuring the availability of critical aircraft parts for Gulfstream-equipped platforms within the Department of Defense. Given the sole-source award, the government is relying on Gulfstream's established manufacturing capabilities and quality control to deliver the necessary components. The outcome is expected to be the sustained operational readiness of the affected aircraft. However, the non-competitive nature means that 'effectiveness' cannot be easily measured against alternative solutions or cost-efficiency benchmarks. The success hinges on Gulfstream's ability to meet delivery schedules and quality standards, rather than on achieving superior value or performance compared to a competitive market.

How does this contract's spending pattern compare to historical federal spending on aircraft parts from Gulfstream Aerospace?

To accurately compare this contract's spending pattern to historical federal spending on Gulfstream parts, detailed historical data would be required. This includes the total dollar amounts, contract types (competitive vs. sole-source), and the specific parts procured over previous periods. However, the $61.1 million awarded over approximately three years represents a significant, albeit potentially recurring, investment in maintaining specific aircraft fleets. If Gulfstream is the sole or primary manufacturer for critical components of certain DoD aircraft, consistent spending on their parts is expected. Analyzing trends in sole-source awards versus competitive bids for similar items from Gulfstream over time would reveal whether the government is increasingly relying on non-competitive arrangements or if this award is in line with historical procurement strategies for these types of parts.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: General Dynamics Corp (UEI: 001381284)

Address: 500 GULFSTREAM RD, SAVANNAH, GA, 01

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

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F3365702D2011

IDV Type: IDC

Timeline