DoD's $694M Aircraft Manufacturing Contract with Rockwell Collins: A 15-Year Fixed-Price Deal
Contract Overview
Contract Amount: $694,013,208 ($694.0M)
Contractor: Rockwell Collins, Inc.
Awarding Agency: Department of Defense
Start Date: 1999-10-21
End Date: 2014-12-31
Contract Duration: 5,550 days
Daily Burn Rate: $125.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Place of Performance
Location: CEDAR RAPIDS, LINN County, IOWA, 52498, UNITED STATES OF AMERICA
State: Iowa Government Spending
Plain-Language Summary
Department of Defense obligated $694.0 million to ROCKWELL COLLINS, INC. for work described as: Key points: 1. Significant long-term investment in aircraft manufacturing, totaling $694M. 2. Awarded to Rockwell Collins, a major player in the aerospace industry. 3. Contract duration of 15 years (1999-2014) suggests a stable, long-term need. 4. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces some cost variability. 5. No explicit mention of small business participation.
Value Assessment
Rating: fair
The contract value of $694M over 15 years averages approximately $46M annually. Without specific unit details or comparable contracts, a precise pricing assessment is difficult. However, the FPEPA clause suggests potential for cost increases beyond initial estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better value for the government.
Taxpayer Impact: The long duration and FPEPA clause mean taxpayers are exposed to potential cost escalations over the contract's life, though competition should have mitigated initial pricing.
Public Impact
Supports national defense capabilities through advanced aircraft manufacturing. Ensures continued operation and maintenance of critical aerospace systems. Potential for technological advancements in aircraft manufacturing driven by long-term investment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment introduces cost uncertainty.
- Lack of small business participation noted.
- Long contract duration may limit flexibility for future technological shifts.
Positive Signals
- Awarded through full and open competition.
- Long-term commitment suggests strategic importance.
- Established contractor with likely proven capabilities.
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is critical for national security. Benchmarks are difficult without specific system details, but large, long-term contracts are common for major defense platforms.
Small Business Impact
The provided data does not indicate any specific set-asides or participation goals for small businesses in this contract. This suggests that small businesses may not have been primary contractors or subcontractors on this significant award.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The long duration necessitates ongoing oversight to manage risks and ensure value.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to Economic Price Adjustment.
- Lack of transparency regarding small business participation.
- Long contract duration may lead to technological obsolescence.
- Limited insight into specific performance metrics and value realization.
Tags
aircraft-manufacturing, department-of-defense, ia, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $694.0 million to ROCKWELL COLLINS, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is ROCKWELL COLLINS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $694.0 million.
What is the period of performance?
Start: 1999-10-21. End: 2014-12-31.
What specific aircraft systems or components were covered by this contract, and how did their unit costs compare to industry benchmarks at the time of award?
The data identifies the North American Industry Classification System (NAICS) code 336411 for Aircraft Manufacturing, but lacks specifics on the exact systems or components. Without this detail, a direct comparison of unit costs to industry benchmarks is not feasible. The FPEPA clause also complicates direct cost analysis over the contract's lifespan.
What were the primary risks associated with the economic price adjustment (EPA) clause in this contract, and how were they mitigated?
The primary risk of an EPA clause is the potential for cost overruns due to fluctuations in labor, material, or other economic factors beyond the contractor's control. Mitigation strategies could include strict adherence to the index used for adjustment, clear definitions of economic factors, and robust government oversight to ensure adjustments are justified and reasonable.
How effectively did the full and open competition process ensure optimal value for the taxpayer over the 15-year contract period?
Full and open competition is designed to foster price discovery and encourage multiple bidders, theoretically leading to better value. However, the long duration and the FPEPA clause introduce complexities. While initial pricing may have been competitive, the economic adjustments over 15 years could erode some of that initial value if not carefully managed and monitored.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Contractor Details
Address: 400 COLLINS ROAD NE, CEDAR RAPIDS, IA, 52406
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 1999-10-21
Current End Date: 2014-12-31
Potential End Date: 2014-12-31 00:00:00
Last Modified: 2015-02-10
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