DOT's $247M Aeronautical Mobile Communication Services Contract Awarded to ARINC Inc. without Competition

Contract Overview

Contract Amount: $246,743,125 ($246.7M)

Contractor: Arinc Incorporated

Awarding Agency: Department of Transportation

Start Date: 2016-08-18

End Date: 2023-08-31

Contract Duration: 2,569 days

Daily Burn Rate: $96.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AERONAUTICAL MOBILE COMMUNICATION SERVICES CONTRACT IGF::CL,CT::IGF

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21401

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $246.7 million to ARINC INCORPORATED for work described as: AERONAUTICAL MOBILE COMMUNICATION SERVICES CONTRACT IGF::CL,CT::IGF Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and lack of market pressure. 2. Significant duration of the contract (over 7 years) suggests a long-term need for these services. 3. The firm-fixed-price structure aims to control costs, but the absence of competition limits benchmarking. 4. Engineering services sector (NAICS 541330) is broad; specific application to aeronautical communications needs further detail. 5. The contract's value is substantial, warranting close scrutiny of performance and value for money. 6. No small business set-aside or subcontracting was indicated, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this $247 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to assess if ARINC Incorporated's pricing reflects fair market value or if taxpayers are receiving optimal value for money. The firm-fixed-price contract type provides some cost certainty, but the lack of competition means there's no direct comparison to similar contracts or market rates to gauge efficiency. Further analysis would require understanding the specific services provided and their criticality to aeronautical operations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning ARINC Incorporated was the only bidder considered. The justification for not competing this requirement is not provided in the data. This lack of competition prevents any assessment of the number of potential bidders or the dynamics of price discovery that would typically occur in a competitive procurement. Consequently, it is impossible to determine if the government secured the best possible price or terms.

Taxpayer Impact: The absence of competition means taxpayers may have paid a premium for these services, as there was no incentive for ARINC Incorporated to offer the lowest possible price. Without a competitive process, the government has limited leverage to negotiate favorable terms.

Public Impact

Aeronautical operations and safety are directly supported by the communication services provided under this contract. Air traffic control and communication systems rely on the reliability and performance of these services. The Federal Aviation Administration (FAA) is the primary beneficiary, ensuring its operational capabilities. The contract supports the broader aviation ecosystem by maintaining critical communication infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential for cost savings through competition.
Long contract duration without clear performance metrics makes oversight critical.
Lack of small business involvement may miss opportunities for innovation and economic inclusion.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
ARINC Incorporated is a known entity in aviation communications, suggesting potential for reliable service delivery.
The contract duration implies a stable, long-term need, potentially indicating a well-defined requirement.

Sector Analysis

The aeronautical mobile communication services sector is a critical component of the aviation industry, supporting everything from air traffic control to passenger connectivity. This contract falls within the broader engineering services (NAICS 541330) category. The market for such specialized communication services is often dominated by a few key players due to high barriers to entry, including regulatory requirements and technological expertise. Comparable spending benchmarks are difficult to establish without more specific details on the services rendered and the competitive landscape.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements. This suggests that ARINC Incorporated, likely a large business, is performing the entirety of the work. Consequently, there may be limited direct impact on the small business ecosystem in this specific procurement, and opportunities for small businesses to participate as prime contractors or subcontractors appear to be absent.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration (FAA), a division of the Department of Transportation. As a sole-source definitive contract, accountability measures would focus on performance against the contract's terms and conditions, rather than on the procurement process itself. Transparency may be limited due to the non-competitive award. The Inspector General of the Department of Transportation would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Air Traffic Control Communications
Aviation Systems Engineering
Federal Communications Commission (FCC) Spectrum Management
Department of Defense Aeronautical Communications

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $246.7 million to ARINC INCORPORATED. AERONAUTICAL MOBILE COMMUNICATION SERVICES CONTRACT IGF::CL,CT::IGF

Who is the contractor on this award?

The obligated recipient is ARINC INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $246.7 million.

What is the period of performance?

Start: 2016-08-18. End: 2023-08-31.

What specific aeronautical mobile communication services are being provided under this contract?

The provided data identifies the contract as 'AERONAUTICAL MOBILE COMMUNICATION SERVICES CONTRACT IGF::CL,CT::IGF' awarded to ARINC INCORPORATED. While the specific services are not detailed, this typically encompasses a range of communication solutions essential for aviation operations. This could include voice and data communication systems for air traffic control, aircraft operational control, passenger information systems, and potentially satellite-based communication services. The 'IGF' designation might refer to specific internal government classifications or programs related to infrastructure and global communications. Understanding the precise nature of these services is crucial for assessing their criticality, cost-effectiveness, and the justification for a sole-source award.

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

The provided data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. However, the specific justification for this determination is not included. Typically, sole-source awards are made when only one responsible source is available or capable of providing the required service, or in cases of urgent and compelling need where competition is not feasible. Without the official justification document, it is impossible to ascertain the rationale. This could range from unique technical capabilities possessed by ARINC INCORPORATED, proprietary technology, or a critical, time-sensitive requirement that precluded a full and open competition. The lack of competition raises concerns about potential lack of price discovery and value for money.

How does the $246.7 million contract value compare to historical spending on similar services?

Direct historical spending comparisons for this specific 'Aeronautical Mobile Communication Services Contract' are not available in the provided data. However, the contract value of $246.7 million over its duration (2016-2023, approximately 7 years) represents a significant investment by the Department of Transportation, specifically the Federal Aviation Administration. To benchmark this spending, one would need to analyze historical contract awards for similar communication services within the FAA or other aviation-related government agencies. Factors such as inflation, technological advancements, and changes in operational requirements would need to be considered for a meaningful comparison. The sole-source nature of this award makes direct price comparisons with competitive contracts even more challenging.

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

A sole-source award of $246.7 million carries several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved in a competitive environment, as the contractor faces less pressure to offer the most cost-effective solution. Secondly, it limits the government's ability to explore innovative solutions or alternative technologies that other vendors might offer. Thirdly, there's a risk of vendor lock-in, where the government becomes overly reliant on a single provider, potentially hindering future flexibility. Finally, without competitive benchmarking, assessing the true value for money and ensuring efficient use of taxpayer funds becomes more difficult, necessitating robust performance monitoring and oversight.

What is ARINC INCORPORATED's track record with the Federal Aviation Administration or similar contracts?

ARINC INCORPORATED (now part of Collins Aerospace) has a long-standing history and significant presence in providing aviation communication and information systems. They have been a key player in developing and managing critical infrastructure for the aviation industry, including air-to-ground communications, flight information services, and air traffic management systems. Their track record with the FAA likely includes numerous contracts, some of which may have been sole-source due to the specialized nature of the services. While specific details of past performance on contracts of this exact nature are not in the provided data, ARINC's established role suggests a deep understanding of aviation communication needs and a capacity to deliver complex solutions. However, past performance does not negate the inherent risks of sole-source awards.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

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: RTX Corp

Address: 2551 RIVA RD, ANNAPOLIS, MD, 21401

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

Financial Breakdown

Contract Ceiling: $246,743,125

Exercised Options: $246,743,125

Current Obligation: $246,743,125

Actual Outlays: $108,866,667

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline