Army awards $47.9M contract for Apache helicopter airframes and spares to Primex Technologies

Contract Overview

Contract Amount: $47,897,009 ($47.9M)

Contractor: General Dynamics Ordnance & Tactical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2000-06-26

End Date: 2011-02-11

Contract Duration: 3,882 days

Daily Burn Rate: $12.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200009!2100!000626!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0900C0001 !A!*!* !20000626!20010228!006317473!194860813!194860813!N!14578!PRIMEX TECHNOLOGIES, INC.. !8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !0001!+000001653175!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !2399!3!*!*!*!B!A!*!D !N!J!1!001!N!1G!A!Y!A!* !* !N!C!*!B!B!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $47.9 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC. for work described as: 200009!2100!000626!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0900C0001 !A!*!* !20000626!20010228!006317473!194860813!194860813!N!14578!PRIMEX TECHNOLOGIES, INC.. !8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WIL… Key points: 1. Contract awarded for critical Apache helicopter components, indicating sustained demand for this platform. 2. The award to Primex Technologies suggests a focus on established suppliers for specialized defense needs. 3. A firm-fixed-price contract type generally transfers risk to the contractor, potentially stabilizing costs. 4. The duration of the contract (over 10 years) points to a long-term requirement for these parts. 5. Geographic concentration in Illinois for the contractor may have local economic implications. 6. The absence of small business participation raises questions about broader economic inclusion.

Value Assessment

Rating: fair

The contract value of $47.9 million over its extended period appears reasonable for specialized aviation components. However, without direct comparisons to similar airframe and spare part contracts for the Apache or comparable helicopters, a definitive value-for-money assessment is challenging. The firm-fixed-price structure suggests cost certainty for the government, but the long performance period could mask potential inefficiencies if not closely monitored. Benchmarking against industry standards for similar components would provide a clearer picture of pricing.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or proprietary rights to fulfill the requirement. While it ensures access to specific expertise, it limits the potential for price competition and may result in higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as the government lacks the leverage of competitive bidding to drive down costs.

Public Impact

The U.S. Army benefits from the continued availability of essential components for its Apache attack helicopter fleet. This contract ensures the supply of airframes and spares, critical for maintaining the operational readiness of Apache helicopters. The primary geographic impact is within Illinois, where Primex Technologies is located, potentially supporting local jobs and the regional economy. The contract supports the defense industrial base, specifically within the aerospace and defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Long contract duration could obscure cost efficiencies.
Sole-source award limits opportunities for new entrants or smaller businesses.
Dependence on a single supplier for critical components poses a supply chain risk.

Positive Signals

Ensures continued availability of critical Apache helicopter parts.
Firm-fixed-price contract provides cost predictability.
Contract awarded to a known entity within the defense sector.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on aircraft components and maintenance. The market for military aircraft parts is characterized by high technical requirements, stringent quality control, and often long product lifecycles. Spending in this area is driven by the need to maintain and modernize existing fleets, as well as develop new platforms. Comparable spending benchmarks would typically involve other contracts for major aircraft components or sustainment services for similar military aircraft.

Small Business Impact

This contract does not appear to have a small business set-aside. The sole-source nature of the award further limits opportunities for small businesses to participate, either as prime contractors or potentially as subcontractors unless specifically included by the prime. This could represent a missed opportunity to foster small business growth within the defense supply chain for critical components.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be embedded in the contract's performance clauses and reporting requirements. Transparency may be limited due to the sole-source nature, but contract award data is publicly available through federal procurement databases. The Inspector General's office could investigate any allegations of fraud, waste, or abuse.

Related Government Programs

Apache AH-64 Attack Helicopter Program
Army Aviation Sustainment
Defense Contract Management Agency (DCMA) oversight
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.9 million to GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, INC.. 200009!2100!000626!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0900C0001 !A!*!* !20000626!20010228!006317473!194860813!194860813!N!14578!PRIMEX TECHNOLOGIES, INC.. !8820 ROUTE 148 !MARION !IL!62959!46916!199!17!MARION !WILLIAMSON !ILLINOIS !0001!+000001653175!N!N!000000000000!1305!AMMUNITION, THROUGH 30 MM !A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !2399!3!*!*!*!B!A!*!D !N!J!

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS ORDNANCE & TACTICAL SYSTEMS, 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 $47.9 million.

What is the period of performance?

Start: 2000-06-26. End: 2011-02-11.

What is the track record of Primex Technologies, Inc. in fulfilling defense contracts, particularly for aircraft components?

Information regarding Primex Technologies, Inc.'s specific track record for fulfilling defense contracts, especially for aircraft components like airframes and spares, is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance ratings, any history of contract modifications, delivery performance, and quality control metrics on similar government contracts. Without this historical data, it's difficult to definitively assess their reliability and capability for this specific award beyond the fact that they were selected for this sole-source requirement.

How does the awarded price of $47.9 million compare to market rates for similar Apache helicopter airframes and spares?

The provided data does not include specific unit costs or detailed breakdowns of the $47.9 million award, making a direct comparison to market rates for similar Apache helicopter airframes and spares impossible. To assess value, one would need to benchmark against historical contract awards for the same or comparable components, analyze the contractor's cost structure (if available), and consider prevailing industry prices. Given the sole-source nature, the government may not have achieved the most competitive pricing achievable through open competition.

What are the primary risks associated with this sole-source contract for the U.S. Army?

The primary risks associated with this sole-source contract include potential overpricing due to the lack of competition, limited leverage for negotiating favorable terms, and a potential for complacency from the contractor regarding innovation or cost reduction. There's also a risk of supply chain disruption if Primex Technologies faces production issues or financial instability, as there are no immediate alternative suppliers identified through competition. Furthermore, the long duration of the contract could mask inefficiencies that might be exposed in a more competitive environment.

How effective is the firm-fixed-price contract type in managing costs for this long-term supply of Apache components?

The firm-fixed-price (FFP) contract type is generally effective in managing costs by transferring most of the cost risk to the contractor. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For a long-term supply of components like airframes and spares, FFP provides budget predictability for the U.S. Army. However, the effectiveness can be diminished if the initial price was not rigorously negotiated or if unforeseen circumstances arise that necessitate contract modifications, which could increase the overall cost.

What is the historical spending trend for Apache helicopter airframes and spares by the Department of the Army?

The provided data only pertains to a single contract award of $47.9 million to Primex Technologies for Apache airframes and spares. It does not offer historical spending trends for these specific components or for the Apache program overall. To understand historical spending, one would need to analyze procurement data over multiple fiscal years, identifying all contracts related to Apache sustainment, component manufacturing, and upgrades. This would reveal patterns in spending levels, major contractors, and the evolution of requirements.

What are the implications of the contract's long duration (2000-2011) on its overall value and risk?

A contract duration spanning from 2000 to 2011 (over 10 years) for aircraft components like airframes and spares has significant implications. On the positive side, it offers long-term supply stability for a critical platform. However, it also introduces risks: potential for price escalation if not adequately capped, the possibility of the contractor becoming less efficient over time, and the risk of obsolescence if technology or requirements change significantly during the contract period. Assessing the overall value requires evaluating if the price remained competitive throughout this extended period and if the components remained relevant to the Army's needs.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 8820 ROUTE 148, MARION, IL, 12

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline