DoD spent $58M on C-37 aircraft preparation and delivery, awarded sole-source to Gulfstream Aerospace

Contract Overview

Contract Amount: $58,023,931 ($58.0M)

Contractor: Gulfstream Aerospace Corporation

Awarding Agency: Department of Defense

Start Date: 2010-03-08

End Date: 2012-04-11

Contract Duration: 765 days

Daily Burn Rate: $75.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PREPARATION AND DELIVERY OF C-37 AIRCRAFT

Place of Performance

Location: SAVANNAH, CHATHAM County, GEORGIA, 31408, UNITED STATES OF AMERICA

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $58.0 million to GULFSTREAM AEROSPACE CORPORATION for work described as: PREPARATION AND DELIVERY OF C-37 AIRCRAFT Key points: 1. Contract awarded without competition, raising questions about potential cost savings. 2. Sole-source award limits opportunities for market-driven pricing. 3. Fixed-price contract shifts some performance risk to the contractor. 4. Contract duration of 765 days suggests a significant project scope. 5. Awarded to a single bidder, indicating limited market engagement. 6. Geographic location of contractor in Georgia may influence local economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without competitive bids. The fixed-price nature provides some cost certainty, but the absence of competition means there's no direct market comparison to assess if the $58 million price represents optimal value for money. Without alternative quotes or historical data on similar sole-source C-37 aircraft preparations, it's difficult to definitively state if the pricing is competitive or if taxpayers received the best possible deal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Gulfstream Aerospace Corporation was the only vendor considered. The justification for not competing the award is not provided in the data. This approach bypasses the standard procurement process designed to foster competition and potentially drive down costs through multiple bids. The lack of competition means the government did not benefit from a range of proposals or price points that could have emerged from an open bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This limits the government's ability to leverage market forces for cost savings.

Public Impact

The primary beneficiary is the Department of Defense, receiving specialized aircraft preparation and delivery services. The contract ensures the readiness and operational capability of C-37 aircraft. Services are likely concentrated in Georgia, the contractor's location, with potential ripple effects on the local aerospace support industry. The contract supports specialized technical and logistical jobs within Gulfstream Aerospace Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competed contract.
Sole-source awards can set a precedent for future sole-source procurements, potentially reducing overall competition in the sector.
Limited transparency into the justification for sole-source award.
Absence of performance metrics or quality indicators in the provided data.
Contract duration is substantial, requiring sustained oversight.

Positive Signals

Fixed-price contract structure shifts some financial risk to the contractor.
Award to an established aerospace corporation suggests potential for specialized expertise.
Contract completion within the specified timeframe (765 days) would be a positive outcome.
The specific nature of 'preparation and delivery' implies a defined scope of work.

Sector Analysis

The aerospace manufacturing and support sector is characterized by high barriers to entry, specialized technology, and significant capital investment. Contracts for aircraft modification, preparation, and delivery are critical for maintaining military readiness. Gulfstream Aerospace Corporation is a well-established player in this market, known for its business jet manufacturing and related services. This contract fits within the broader category of defense procurement for specialized aviation assets, where sole-source awards may sometimes occur due to unique capabilities or existing platforms.

Small Business Impact

The data indicates this contract was not competed and does not specify any small business set-aside provisions or subcontracting goals. Given the sole-source nature and the prime contractor being Gulfstream Aerospace Corporation, a large entity, the direct impact on small businesses is likely minimal unless Gulfstream engages them for subcontracting work. There is no explicit information to suggest this contract was designed to benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's contracting and program management structures, likely involving the Defense Contract Management Agency (DCMA) given the 'sa' field. The fixed-price nature provides some accountability for cost, but the effectiveness of oversight would depend on detailed performance monitoring, quality assurance checks, and adherence to the contract's scope. Transparency is limited by the sole-source award, and specific Inspector General jurisdiction would depend on the nature of any potential issues arising from the contract.

Related Government Programs

Department of Defense Aircraft Procurement
Specialized Aviation Services
Aerospace Manufacturing Support
Fixed-Price Defense Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award without clear justification.
Potential for inflated pricing due to lack of competition.
Limited transparency into contract negotiation and award process.
Absence of performance metrics in provided data.
Contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.0 million to GULFSTREAM AEROSPACE CORPORATION. PREPARATION AND DELIVERY OF C-37 AIRCRAFT

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 $58.0 million.

What is the period of performance?

Start: 2010-03-08. End: 2012-04-11.

What is the track record of Gulfstream Aerospace Corporation in fulfilling similar sole-source defense contracts?

Gulfstream Aerospace Corporation, a subsidiary of General Dynamics, has a long history of producing and servicing aircraft, including for government and military clients. While specific data on their sole-source defense contracts for C-37 aircraft preparation is not detailed here, their general track record in the aerospace industry is strong, marked by quality manufacturing and service. However, the absence of competition in this specific $58 million contract means that direct comparisons of their performance against other potential bidders for this exact service are unavailable. Evaluating their track record would require examining past performance reviews, on-time delivery rates, and cost overruns on comparable government contracts, particularly those awarded without full and open competition.

How does the $58 million cost compare to market rates for similar aircraft preparation and delivery services?

Directly comparing the $58 million cost to market rates is difficult due to the sole-source nature of this award and the specific 'preparation and delivery' scope for C-37 aircraft, which may involve unique modifications or services. Without competitive bids, there's no direct market benchmark established for this particular contract. To assess value, one would typically look at historical data for similar sole-source awards, or if possible, compare the cost breakdown to industry standards for aircraft maintenance, modification, and logistics. Given the lack of competitive data, it's challenging to definitively state whether this price represents optimal value or if it is inflated due to the absence of competition.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of $58 million include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or offer cost efficiencies, and a lack of transparency in the procurement process. There's also a risk that the government may not be aware of alternative solutions or suppliers that could offer better value or performance. Furthermore, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single provider, which can create vulnerabilities if that provider faces operational issues. The government must ensure robust oversight to mitigate these risks.

How effective is a firm fixed-price contract in managing cost and performance risks for aircraft preparation?

A firm fixed-price (FFP) contract is generally considered effective in managing cost risks for the government because it shifts the responsibility for cost overruns to the contractor. The contractor agrees to a set price, and any costs incurred above that price are their responsibility. This incentivizes the contractor to manage their expenses efficiently. For performance risks, FFP contracts can be effective if the scope of work is clearly defined. However, if the scope is ambiguous or subject to change, it can lead to disputes or require contract modifications. For aircraft preparation, where technical specifications are crucial, clear definition of requirements is key to maximizing the benefits of an FFP structure.

What is the historical spending pattern for C-37 aircraft preparation and delivery within the Department of Defense?

The provided data only details a single contract for C-37 aircraft preparation and delivery totaling $58 million, awarded from March 2010 to April 2012. Without access to broader historical spending databases or specific line-item data for the DoD's aviation programs, it is impossible to establish a comprehensive spending pattern for this specific service. To understand historical trends, one would need to analyze multiple contracts over several fiscal years, looking at the frequency, value, and competitive nature of awards related to C-37 aircraft or similar platforms. This single data point does not provide sufficient information to discern any patterns.

What oversight mechanisms are in place for sole-source contracts awarded by the Department of Defense?

Oversight for sole-source contracts awarded by the Department of Defense typically involves multiple layers. The contracting officer is responsible for ensuring the justification for the sole-source award is adequate and properly documented. Program managers oversee the technical execution and performance of the contract. Contract administration, often handled by agencies like the Defense Contract Management Agency (DCMA), monitors contractor performance, ensures compliance with contract terms, and reviews invoices. Additionally, the DoD has internal audit functions and is subject to oversight by the Government Accountability Office (GAO) and the DoD Inspector General (IG) to ensure fairness, efficiency, and prevent fraud, waste, and abuse.

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, 31408

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

Financial Breakdown

Contract Ceiling: $58,023,931

Exercised Options: $58,023,931

Current Obligation: $58,023,931

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365702D2011

IDV Type: IDC

Timeline