DoD's $61.1M aircraft parts contract to Gulfstream Aerospace Corporation shows no competition, raising value concerns

Contract Overview

Contract Amount: $86,782,453 ($86.8M)

Contractor: Gulfstream Aerospace Corporation

Awarding Agency: Department of Defense

Start Date: 2004-12-10

End Date: 2008-09-30

Contract Duration: 1,390 days

Daily Burn Rate: $62.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200505!000047!5700!FA8625!ASC/GR !F3365702D2011 !A!N! !N!0050 ! !20041210!20061031!611792912!611792912!001381284!N!GULFSTREAM AEROSPACE CORPORATI!500 GULFSTREAM RD !SAVANNAH !GA!31408!69000!051!13!SAVANNAH !CHATHAM !GEORGIA !+000082848367!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!S! ! ! !20200930!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 $86.8 million to GULFSTREAM AEROSPACE CORPORATION for work described as: 200505!000047!5700!FA8625!ASC/GR !F3365702D2011 !A!N! !N!0050 ! !20041210!20061031!611792912!611792912!001381284!N!GULFSTREAM AEROSPACE CORPORATI!500 GULFSTREAM RD !SAVANNAH !GA!31408!69000!051!13!SAVANNAH !CHAT… Key points: 1. The contract was awarded on a sole-source basis, indicating a lack of competitive bidding. 2. The total value of the contract is substantial, suggesting a significant investment in aircraft parts. 3. The duration of the contract (1390 days) implies a long-term need for these specific parts or services. 4. The contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code. 5. The awarding agency is the Department of the Air Force, part of the Department of Defense. 6. The contract was awarded as Firm Fixed Price, which shifts some risk to the contractor.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable contract data. The firm fixed-price structure provides some cost certainty, but without competition, it's difficult to ascertain if the government received the best possible price. The total award amount of $61.1 million over approximately 3.8 years suggests a significant expenditure. Further analysis would require access to detailed cost breakdowns and market research conducted by the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Gulfstream Aerospace Corporation, was solicited. This typically occurs when a specific capability or product is only available from a single source, or in certain emergency situations. The lack of competition means there was no opportunity for other qualified vendors to bid, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may not have received the most competitive pricing due to the absence of a bidding process. This sole-source award warrants scrutiny to ensure the price paid was fair and reasonable.

Public Impact

The primary beneficiaries are likely the Department of Defense and specifically the Air Force, ensuring the availability of critical aircraft parts. The contract supports the maintenance and operational readiness of Air Force aircraft fleets. The geographic impact is centered around Savannah, Georgia, where Gulfstream Aerospace Corporation is headquartered. The contract supports jobs within Gulfstream Aerospace Corporation and potentially its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source awards can indicate potential vendor lock-in.
Limited transparency into the justification for sole-source award.

Positive Signals

Firm Fixed Price contract type can provide cost certainty.
Award to an established aerospace corporation suggests potential for reliable delivery.
Contract supports critical defense needs.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment. The aerospace industry is characterized by high barriers to entry, specialized manufacturing processes, and significant R&D investment. The market for defense aerospace parts is often influenced by government procurement policies, long-term sustainment needs, and technological advancements. Comparable spending benchmarks would typically involve analyzing other large sole-source or competitively awarded contracts for similar aircraft components or sustainment services within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component. As a sole-source award to a large corporation, there are no direct subcontracting opportunities mandated for small businesses within this specific award. The impact on the small business ecosystem is neutral in terms of direct set-aside benefits, though Gulfstream may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting officers and program managers. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to manage costs. Transparency is limited by the sole-source nature, but the contract details and justifications should be available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Defense Logistics Agency Contracts
Air Force Sustainment Contracts
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award lacks competition
Potential for non-competitive pricing
Limited transparency on justification for sole-sourcing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $86.8 million to GULFSTREAM AEROSPACE CORPORATION. 200505!000047!5700!FA8625!ASC/GR !F3365702D2011 !A!N! !N!0050 ! !20041210!20061031!611792912!611792912!001381284!N!GULFSTREAM AEROSPACE CORPORATI!500 GULFSTREAM RD !SAVANNAH !GA!31408!69000!051!13!SAVANNAH !CHATHAM !GEORGIA !+000082848367!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!B!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is GULFSTREAM AEROSPACE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $86.8 million.

What is the period of performance?

Start: 2004-12-10. End: 2008-09-30.

What specific aircraft platforms or systems does this contract support?

The provided data indicates the contract is for 'AIRCRAFT FIXED WING' and falls under the 'AIRFRAMES AND SPARES' product service code. While the specific aircraft platforms are not explicitly detailed in the abbreviated data, the nature of the contract suggests it supports the operational readiness and maintenance of Air Force fixed-wing aircraft. Gulfstream Aerospace Corporation is known for manufacturing and servicing business jets, but also has a history of producing military aircraft or components. Further investigation into the contract's detailed description or associated documentation would be necessary to identify the precise platforms.

What was the justification for awarding this contract on a sole-source basis?

The provided data explicitly states the contract type as 'NOT COMPETED', which aligns with a sole-source award. The specific justification for this sole-source award is not detailed in the abbreviated data. Typically, sole-source justifications are documented by the procuring agency and can include reasons such as only one responsible source being available, a compelling urgency, or a specific national defense requirement. Without access to the agency's justification documentation (e.g., a Justification and Approval document), the precise reason remains unknown. This lack of competition is a key area for further scrutiny.

How does the total contract value of $61.1 million compare to similar contracts for aircraft parts?

Comparing the $61.1 million total contract value requires context regarding the specific types of aircraft parts and the duration of the contract (1390 days, approximately 3.8 years). For large, long-term sustainment contracts involving complex components or a broad range of parts for military aircraft, this value might be within a typical range. However, without knowing the specific parts or platforms, a direct comparison is difficult. The sole-source nature also complicates value assessment, as competitive contracts often yield lower prices. Benchmarking would ideally involve analyzing other sole-source or competitively awarded contracts for similar parts from the same or different agencies.

What is Gulfstream Aerospace Corporation's track record with the Department of Defense?

Gulfstream Aerospace Corporation has a history of receiving contracts from the Department of Defense. While this specific contract is for aircraft parts, Gulfstream is primarily known for its business jet manufacturing. However, the company has also been involved in producing military aircraft, such as the C-20 (military version of the Gulfstream III) and the C-37 (military version of the Gulfstream V). Their track record with the DoD likely includes various sustainment, modification, and potentially production contracts. The 'NOT COMPETED' status on this particular award suggests a specific relationship or capability that led to this award method.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risk associated with a sole-source contract of this magnitude is the potential for inflated pricing due to the lack of competitive pressure. Taxpayers may be paying more than they would if multiple bidders had competed. Another risk is vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and negotiation power. There's also a risk of reduced innovation, as the sole provider may have less incentive to improve products or services. Finally, the justification for sole-sourcing needs to be robust to ensure it aligns with procurement regulations and serves the best interest of the government.

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: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: F3365702D2011

IDV Type: IDC

Timeline