DoD's $24.6M contract for missile parts saw no competition, raising value concerns

Contract Overview

Contract Amount: $24,628,268 ($24.6M)

Contractor: Moog Inc

Awarding Agency: Department of Defense

Start Date: 2004-08-31

End Date: 2010-08-11

Contract Duration: 2,171 days

Daily Burn Rate: $11.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200412!000075!5700!GE50 !OGDEN ALC/PKM/LMK !FA820404C0012 !A!N! !Y! ! !20040831!20091230!002103166!002103166!002103166!N!MOOG INC !SENECA ST& JAMISON RD !EAST AURORA !NY!14052!21589!029!36!EAST AURORA !ERIE !NEW YORK !+000001699450!N!N!000000000000!J014!MAINT & REPAIR OF EQ/GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !336419!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!D!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: EAST AURORA, ERIE County, NEW YORK, 14052

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $24.6 million to MOOG INC for work described as: 200412!000075!5700!GE50 !OGDEN ALC/PKM/LMK !FA820404C0012 !A!N! !Y! ! !20040831!20091230!002103166!002103166!002103166!N!MOOG INC !SENECA ST& JAMISON RD !EAST AURORA !NY!14052!21589!029!36!EAST AURORA !ERIE… Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery. 2. The contractor, Moog Inc., has a track record in missile systems. 3. The duration of the contract (over 6 years) suggests a long-term need. 4. The lack of competition may have led to higher costs for taxpayers. 5. The specific nature of the parts (guided missiles) indicates a specialized defense requirement.

Value Assessment

Rating: questionable

The total award amount of $24.6 million for missile parts over approximately six years warrants scrutiny due to the lack of competitive bidding. Without comparison to other suppliers or bids, it is difficult to definitively assess value for money. However, the extended duration and specialized nature of the components suggest that Moog Inc. may possess unique capabilities, which could justify a higher price point. Further analysis would require benchmarking against similar sole-source contracts or independent cost estimates for the components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Moog Inc., was considered. This approach is typically used when a unique product or service is required, or when only one responsible source is available. The lack of competition means that taxpayers did not benefit from the price reductions that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no opportunity for multiple companies to bid and drive down costs through competition.

Public Impact

The primary beneficiaries are likely the U.S. Air Force and potentially other branches of the Department of Defense requiring missile components. The contract delivers essential parts for guided missiles, contributing to national defense capabilities. The geographic impact is centered around the contractor's location in East Aurora, New York, and the defense facilities receiving the parts. Workforce implications include employment at Moog Inc. and its supply chain, particularly in specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing.
Sole-source awards can limit innovation by not engaging a broader market.
Long contract duration without competition could mask inefficiencies.

Positive Signals

Moog Inc. is a known entity in the aerospace and defense sector.
The contract addresses a critical need for missile components.
The firm fixed-price nature of the contract provides some cost certainty.

Sector Analysis

This contract falls within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector, a highly specialized niche within the broader aerospace and defense industry. The market for such components is characterized by high barriers to entry due to stringent quality requirements, advanced technology, and long development cycles. Spending in this sector is heavily influenced by government defense budgets and strategic priorities. Comparable spending benchmarks are difficult to establish due to the proprietary nature of many defense contracts and the specialized products involved.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of missile components, it is likely that the primary contractor, Moog Inc., is a large business. Subcontracting opportunities for small businesses may exist, but they would depend on Moog Inc.'s procurement practices and the specific components required. The overall impact on the small business ecosystem for this particular contract is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations. The Air Force, as the awarding agency, would be responsible for monitoring performance and ensuring compliance. Inspector General (IG) offices within the DoD can investigate allegations of fraud, waste, or abuse. Transparency is limited due to the sole-source nature and the classified aspects often associated with defense procurement.

Related Government Programs

Guided Missile Production
Aerospace Parts Manufacturing
Defense Procurement
Sole-Source Defense Contracts
Missile Systems Maintenance

Risk Flags

Sole-source award lacks competitive pricing.
Potential for overpayment due to lack of competition.
Limited transparency in contract details.
Long contract duration without clear performance benchmarks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.6 million to MOOG INC. 200412!000075!5700!GE50 !OGDEN ALC/PKM/LMK !FA820404C0012 !A!N! !Y! ! !20040831!20091230!002103166!002103166!002103166!N!MOOG INC !SENECA ST& JAMISON RD !EAST AURORA !NY!14052!21589!029!36!EAST AURORA !ERIE !NEW YORK !+000001699450!N!N!000000000000!J014!MAINT & REPAIR OF EQ/GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !336419!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is MOOG INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $24.6 million.

What is the period of performance?

Start: 2004-08-31. End: 2010-08-11.

What is Moog Inc.'s track record with the Department of Defense, particularly concerning missile systems?

Moog Inc. has a significant history of contracting with the Department of Defense, particularly in the aerospace and defense sectors. They are known for providing high-performance motion control systems, components, and integrated products for various military platforms, including aircraft, missiles, and space systems. Their expertise in precision engineering and manufacturing makes them a key supplier for complex defense applications. While specific details on past missile-related contracts can be proprietary, their long-standing relationship with the DoD and their specialization in related technologies suggest a substantial track record in this area. This includes providing components for control systems, actuation, and other critical functions within missile systems.

How does the $24.6 million award compare to similar contracts for missile components?

Direct comparison of this $24.6 million award to similar contracts for missile components is challenging due to the proprietary nature of defense contracting and the highly specialized requirements for missile parts. This contract was awarded on a sole-source basis to Moog Inc. for 'MAINT & REPAIR OF EQ/GUIDED MISSILES'. Without competitive bids or publicly available data on the specific components and their quantities, benchmarking the value is difficult. Typically, sole-source awards are scrutinized more closely for value. If this contract covered a broad range of components over a six-year period, the annual expenditure might be considered moderate within the defense sector. However, without more granular data or comparable sole-source awards for similar systems, a definitive value assessment relative to the market is not feasible.

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

The primary risk associated with a sole-source contract of this magnitude ($24.6 million) is the potential for inflated pricing due to the lack of competition. Without competing bids, the government has less leverage to negotiate the best possible price, potentially leading to higher costs for taxpayers. Another risk is contractor complacency; a sole-source provider might have less incentive to innovate or improve efficiency compared to a company facing market competition. Furthermore, reliance on a single source can create supply chain vulnerabilities if the contractor experiences production issues, financial instability, or geopolitical disruptions. Ensuring robust oversight and performance management becomes critical to mitigate these risks.

How effective is the 'MAINT & REPAIR OF EQ/GUIDED MISSILES' service provided by Moog Inc. in ensuring operational readiness?

The effectiveness of the 'MAINT & REPAIR OF EQ/GUIDED MISSILES' service provided by Moog Inc. in ensuring operational readiness is presumed to be high, given the critical nature of missile systems and the sole-source award to a specialized contractor. Moog Inc.'s established expertise in missile components suggests they possess the necessary technical knowledge and manufacturing capabilities to maintain and repair these complex systems. However, the effectiveness is not directly measurable from the provided data alone. Key performance indicators (KPIs) related to turnaround times, defect rates, and the successful integration of repaired components back into operational systems would be necessary for a comprehensive assessment. The long duration of the contract (over 6 years) implies a sustained need for these services, suggesting a level of satisfaction with their performance.

What are the historical spending patterns for 'MAINT & REPAIR OF EQ/GUIDED MISSILES' by the Department of Defense, and how does this contract fit?

Historical spending patterns for 'MAINT & REPAIR OF EQ/GUIDED MISSILES' by the Department of Defense are substantial, reflecting the ongoing need to maintain and upgrade complex weapon systems. This specific $24.6 million contract awarded to Moog Inc. from August 2004 to August 2010 represents a portion of that broader spending. As a sole-source award, it suggests that Moog Inc. was deemed the only capable provider for these specific maintenance and repair services or components during that period. Without access to comprehensive historical contract databases detailing all such awards, it's difficult to place this single contract within the larger trend. However, the duration and value indicate a significant, albeit specific, investment in sustaining missile readiness.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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

Address: SENECA ST& JAMISON RD, EAST AURORA, NY, 23

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline