Frontgrade Technologies Inc. awarded $11.15M for rotary joints, serving critical defense navigation systems

Contract Overview

Contract Amount: $11,152,885 ($11.2M)

Contractor: Frontgrade Technologies Inc.

Awarding Agency: Department of Defense

Start Date: 2006-12-28

End Date: 2014-10-31

Contract Duration: 2,864 days

Daily Burn Rate: $3.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ROTARY JOINT

Place of Performance

Location: EXETER, ROCKINGHAM County, NEW HAMPSHIRE, 03833

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $11.2 million to FRONTGRADE TECHNOLOGIES INC. for work described as: ROTARY JOINT Key points: 1. Contract value appears reasonable given the specialized nature of rotary joints for defense applications. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. Contract duration of nearly 8 years indicates a long-term need for these components. 4. The firm fixed-price contract type shifts performance risk to the contractor. 5. This contract supports the manufacturing of essential systems for military operations. 6. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector.

Value Assessment

Rating: good

The contract value of $11.15 million for rotary joints over an approximate 8-year period appears to be within a reasonable range for specialized defense components. Without specific per-unit cost data or direct comparisons to identical contracts, a precise value-for-money assessment is challenging. However, the firm fixed-price nature of the award suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government. The long duration implies a sustained need, and the award to a single entity under a competitive process suggests a considered selection.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be open, specific sources were excluded, possibly due to unique capabilities, prior performance, or specific technical requirements. The exact number of bidders is not provided, but the 'exclusion of sources' suggests a more tailored competition than a completely unrestricted one. This approach can sometimes lead to fewer bidders but may ensure the selection of a contractor with highly specific expertise.

Taxpayer Impact: The exclusion of sources in the competition may limit the potential for the lowest possible price if a broader range of suppliers could have offered competitive bids. However, it could also ensure that the selected contractor possesses the necessary specialized skills, potentially leading to better quality and reduced long-term costs.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units relying on advanced navigation and guidance systems. The contract delivers critical components (rotary joints) essential for the functioning of search, detection, and navigation equipment. The geographic impact is national, supporting defense readiness across various military branches and potentially global deployments. Workforce implications include supporting skilled manufacturing jobs within the aerospace and defense industry, likely concentrated where Frontgrade Technologies Inc. operates.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to exclusion of sources, impacting price discovery.
Long contract duration could lead to complacency or reduced incentive for innovation if not managed closely.
Dependence on a single contractor for critical components poses a supply chain risk.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Award to an established entity suggests a degree of proven capability.
Long-term contract indicates a stable and predictable need for the component.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically instruments for navigation, detection, and guidance. The market for such specialized components is often characterized by high technical barriers to entry, stringent quality requirements, and significant government procurement. Spending in this area is driven by national security needs and technological advancements in military systems. Comparable spending benchmarks would typically involve other contracts for similar high-precision electro-mechanical components used in defense platforms.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. This suggests the contract was likely awarded based on technical requirements and full and open competition principles, rather than a specific small business goal. There is no explicit information on subcontracting plans for small businesses, but given the specialized nature of rotary joints, it's possible that the prime contractor relies on a limited number of specialized suppliers, which may or may not include small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are embedded in the firm fixed-price structure, which incentivizes the contractor to meet cost and schedule targets. Transparency is facilitated through contract databases like FPDS, although detailed performance metrics are often not publicly disclosed. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Navigation Systems
Aerospace Component Manufacturing
Military Guidance Equipment
Search and Detection Systems
Aircraft Instrument Manufacturing

Risk Flags

Potential for limited competition
Long contract duration may lead to obsolescence risk
Supply chain dependency on a single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.2 million to FRONTGRADE TECHNOLOGIES INC.. ROTARY JOINT

Who is the contractor on this award?

The obligated recipient is FRONTGRADE TECHNOLOGIES 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 $11.2 million.

What is the period of performance?

Start: 2006-12-28. End: 2014-10-31.

What is the specific technical function and importance of the 'rotary joint' being procured?

A rotary joint is a device that allows for the transmission of power or data between stationary and rotating components. In the context of defense systems, rotary joints are critical for applications such as radar antennas (allowing them to rotate while maintaining signal integrity), weapon systems (enabling turret rotation), and sensor platforms. Their importance lies in enabling continuous operation and data flow in systems that require both rotational movement and electrical/data connectivity, which is fundamental for functions like surveillance, targeting, and navigation. Failure of a rotary joint can lead to the complete loss of functionality for the system it supports.

How does 'Full and Open Competition After Exclusion of Sources' differ from standard full and open competition, and what are its implications?

'Full and Open Competition After Exclusion of Sources' is a specific contracting method where the agency intends to compete the requirement broadly but has identified and excluded certain sources from the outset. This exclusion is typically based on specific justifications, such as the need for unique capabilities, proprietary technology, or prior successful performance with a particular system. Unlike standard full and open competition, which aims to solicit offers from all responsible sources, this method narrows the field. The implications can include a potentially smaller pool of bidders, which might affect price competition, but it also ensures that the competition is focused on entities possessing the precise qualifications deemed necessary for the requirement, potentially leading to a more suitable technical solution.

What are the risks associated with a nearly 8-year contract duration for specialized components like rotary joints?

A contract duration of approximately 8 years for specialized components like rotary joints presents several potential risks. Firstly, technological obsolescence is a significant concern; defense technology evolves rapidly, and a component designed and procured over such a long period might become outdated before the contract ends, requiring costly modifications or replacements. Secondly, market dynamics can change, potentially leading to better pricing or alternative solutions becoming available from competitors who were excluded or did not bid. Thirdly, long-term reliance on a single contractor can reduce the government's leverage over time and create supply chain vulnerabilities if the contractor faces financial difficulties or operational issues. Finally, maintaining consistent quality and performance over an extended period requires robust oversight.

Can we benchmark the value of this contract against similar procurements for defense navigation system components?

Benchmarking the value of this $11.15 million contract for rotary joints against similar procurements is challenging without access to detailed contract data for comparable items. Factors such as the specific technical specifications (size, weight, power handling, data rates, environmental resistance), quantity, and the specific defense platform influence pricing significantly. However, given that rotary joints are high-precision, mission-critical components within the specialized field of navigation, detection, and guidance systems manufacturing (NAICS 334511), the awarded amount over an extended period suggests a moderate to high unit cost, typical for such specialized defense hardware. Further analysis would require identifying contracts for rotary joints with similar technical parameters and durations.

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

Frontgrade Technologies Inc. (formerly part of Cobham Advanced Electronic Solutions) has a history of supplying components to the defense and aerospace industries. Their expertise typically lies in areas such as power solutions, RF, microwave, and microelectronics. While specific details on their performance for 'rotary joints' under this particular contract are not publicly detailed in the provided data, their established presence in the defense sector suggests a baseline capability. A comprehensive assessment of their track record would involve reviewing past performance evaluations, on-time delivery rates, quality metrics, and any history of contract disputes or awards for similar complex electro-mechanical or electronic components.

How does the firm fixed-price (FFP) contract type impact the government's financial risk and the contractor's incentives?

The Firm Fixed-Price (FFP) contract type is generally favored by the government when the scope of work is well-defined and the risks are understood. Under an FFP contract, the contractor agrees to a total price for a well-defined product or service, and is responsible for all costs incurred to complete the work. This significantly shifts the financial risk from the government to the contractor; if costs exceed the agreed-upon price, the contractor absorbs the loss. Conversely, if the contractor can complete the work for less than the agreed price, they retain the profit. This structure provides strong incentives for the contractor to control costs, improve efficiency, and deliver the product on time and to specification, as their profit is directly tied to their performance and cost management.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cobham PLC

Address: 11 CONTINENTAL DR, EXETER, NH, 03833

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,166,578

Exercised Options: $11,166,578

Current Obligation: $11,152,885

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline