DoD's $665M aircraft manufacturing contract with Gulfstream Aerospace Corporation awarded in 2000, ending in 2012

Contract Overview

Contract Amount: $664,930,855 ($664.9M)

Contractor: Gulfstream Aerospace Corporation

Awarding Agency: Department of Defense

Start Date: 2000-10-26

End Date: 2012-09-30

Contract Duration: 4,357 days

Daily Burn Rate: $152.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: SAVANNAH, CHATHAM County, GEORGIA, 31408

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $664.9 million to GULFSTREAM AEROSPACE CORPORATION for work described as: Key points: 1. The contract value of $665 million over 12 years suggests a significant investment in specialized aircraft. 2. The firm fixed-price structure indicates that cost risks were largely borne by the contractor. 3. Awarded under full and open competition, this suggests a robust market for the required aircraft. 4. The long duration of the contract implies a sustained need for these specific aviation assets. 5. The absence of small business set-asides may indicate a focus on large, specialized manufacturers. 6. The contract's completion date in 2012 means current relevance needs to be assessed against evolving defense needs.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the aircraft type and capabilities. However, a $665 million expenditure over 12 years for aircraft manufacturing, especially for defense purposes, requires careful scrutiny. The firm fixed-price nature shifts cost risk to the contractor, which can be beneficial for the government if managed effectively. Without comparable contract data for similar aircraft, a precise value-for-money assessment is difficult, but the scale suggests a substantial procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to drive better pricing and terms for the government. The number of bidders and the specific evaluation criteria would provide further insight into the strength of the competition. A well-competed contract suggests that the government sought the best value from the available market.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality goods or services.

Public Impact

The primary beneficiaries are likely the Department of Defense, which receives specialized aircraft for its operations. The contract supports the manufacturing sector, specifically aircraft production, contributing to the aerospace industry. The geographic impact is centered in Georgia, where Gulfstream Aerospace Corporation is headquartered and likely conducted much of the manufacturing. This contract would have supported a skilled workforce in aerospace engineering, manufacturing, and related fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm fixed-price contract did not adequately account for all eventualities.
Risk of obsolescence if the aircraft technology procured became outdated before the contract's end.
Dependence on a single contractor for a significant defense asset could pose supply chain risks.
Ensuring the aircraft met all stringent military specifications and performance requirements throughout the contract period.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor, potentially saving taxpayer money.
Full and open competition suggests a healthy market and potential for competitive pricing.
Long contract duration allowed for sustained production and potential economies of scale for the contractor.
The award to a known entity like Gulfstream Aerospace Corporation suggests a degree of confidence in their capabilities.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector. The market for specialized military aircraft is often characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Spending in this sector is heavily influenced by national security priorities and defense budgets. Comparable spending benchmarks would involve analyzing other large-scale aircraft procurement contracts within the DoD or allied nations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This is common for large, complex defense procurements that often require specialized capabilities and manufacturing capacity typically found in larger corporations. While there's no direct set-aside, the prime contractor may have subcontracting requirements that could involve small businesses, though this information is not detailed here.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of Defense, likely through the Defense Contract Management Agency (DCMA), given the agency's role in contract administration. Accountability measures would include adherence to contract specifications, delivery schedules, and quality standards. Transparency would depend on the DoD's reporting practices for such procurements, with potential oversight from Congress and Government Accountability Office (GAO) audits.

Related Government Programs

Military Aircraft Procurement
Aerospace Manufacturing Contracts
Department of Defense Major Acquisitions
Fixed-Price Defense Contracts

Risk Flags

Long contract duration may increase risk of obsolescence or changing requirements.
Lack of specific performance data makes value assessment difficult.
Firm Fixed Price shifts cost risk to contractor, but requires careful initial pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $664.9 million to GULFSTREAM AEROSPACE CORPORATION. See the official description on USAspending.

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 $664.9 million.

What is the period of performance?

Start: 2000-10-26. End: 2012-09-30.

What specific type of aircraft was procured under this contract, and what were its intended military applications?

The provided data does not specify the exact model or type of aircraft procured. However, given Gulfstream Aerospace Corporation's specialization in business jets, it is plausible that the contract involved the modification or production of aircraft for roles such as VIP transport, special mission platforms (e.g., surveillance, electronic warfare), or light cargo. The North American Industry Classification System (NAICS) code 336411, 'Aircraft Manufacturing,' confirms the general nature of the product. Without more specific contract details or documentation, the precise application remains inferred.

How did the final cost compare to the initial projected cost, and were there any significant cost overruns or savings?

The available data presents the total awarded amount ($664,930,854.56) but does not provide information on initial projections or any subsequent modifications that might have led to cost overruns or savings. As this was a firm fixed-price contract, the contractor, Gulfstream Aerospace Corporation, would have borne the primary responsibility for managing costs to stay within the agreed-upon price. Any deviations would typically be documented through contract modifications, which are not detailed in the provided summary.

What was the performance history of Gulfstream Aerospace Corporation on this contract, and were there any notable issues or successes?

The provided data does not include specific performance metrics or a qualitative assessment of Gulfstream Aerospace Corporation's performance on this contract. A thorough review would require access to contract performance reports, delivery records, and any official evaluations conducted by the Department of Defense or the Defense Contract Management Agency. Success would typically be measured by on-time delivery, adherence to specifications, and overall quality of the manufactured aircraft.

How does the per-unit cost of these aircraft compare to similar military or commercial aircraft procured around the same period?

Determining a precise per-unit cost is difficult without knowing the number of aircraft delivered under the $665 million contract. If, for example, 10 aircraft were delivered, the per-unit cost would be approximately $66.5 million. Comparing this to similar aircraft requires identifying comparable platforms. Military transport or special mission aircraft can vary widely in cost. High-end business jets, which Gulfstream specializes in, can also command prices in the tens of millions. A detailed comparison would necessitate identifying the specific aircraft model and its mission profile, then benchmarking against contemporary procurements by the DoD or international partners.

What was the rationale for awarding a definitive contract with such a long duration (over 10 years)?

A definitive contract with a long duration, such as this 12-year award (October 2000 to September 2012), is typically used for procurements involving complex manufacturing processes, specialized technology development, or sustained support services where a long-term commitment is necessary. For aircraft manufacturing, a lengthy period allows for production ramp-up, potential design refinements, and efficient utilization of manufacturing facilities. The firm fixed-price nature suggests the government sought price certainty over the extended period, while the contractor could plan production and investments accordingly.

Were there any significant technological advancements or changes in military requirements during the contract period that impacted its execution?

The contract spanned a period of significant technological evolution in aviation and evolving global security landscapes. While the data doesn't specify impacts, it's plausible that advancements in avionics, materials, or mission systems could have been incorporated via contract modifications, or that changing military needs might have led to adjustments in the aircraft's configuration or role. The firm fixed-price structure might have limited the contractor's incentive to incorporate costly upgrades unless contractually mandated or negotiated.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $629,670,314

Exercised Options: $629,670,314

Current Obligation: $664,930,855

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline