DoD awards $122.8M for Peace Dragon program aircraft manufacturing, with no competition

Contract Overview

Contract Amount: $122,860,394 ($122.9M)

Contractor: Beechcraft Corporation

Awarding Agency: Department of Defense

Start Date: 2011-01-01

End Date: 2016-09-15

Contract Duration: 2,084 days

Daily Burn Rate: $59.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 9 MONTH CLS FOR PEACE DRAGON PROGRAM

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67207

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $122.9 million to BEECHCRAFT CORPORATION for work described as: 9 MONTH CLS FOR PEACE DRAGON PROGRAM Key points: 1. The contract's value of over $122 million for aircraft manufacturing raises questions about cost-effectiveness given the lack of competition. 2. Sole-source procurement limits price discovery and potentially increases costs for taxpayers. 3. The long duration of the contract (over 5 years) warrants scrutiny of performance and potential cost overruns. 4. The absence of small business set-asides or subcontracting plans may limit opportunities for smaller firms in this sector. 5. The contract's focus on aircraft manufacturing places it within a critical but often high-cost segment of defense spending.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable data. However, a contract of this magnitude, awarded without competition, inherently carries a higher risk of not achieving optimal value for money. The firm-fixed-price structure provides some cost certainty, but the absence of competitive pressure means the pricing may not reflect the most economical options available in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when only one responsible source can provide the required goods or services. The lack of bidders means that the government did not benefit from the price reductions and innovation that typically arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as the contractor faces no competitive pressure to offer the most cost-effective solution. This limits the government's ability to negotiate favorable terms and potentially overpays for the acquired goods or services.

Public Impact

The primary beneficiaries are the Department of Defense, which receives the manufactured aircraft for the Peace Dragon program. The contract supports the production of specialized aircraft, contributing to national defense capabilities. The contract is managed by the Defense Contract Management Agency, indicating a focus on oversight and compliance. The contract's duration and value suggest a significant impact on the workforce within Beechcraft Corporation and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Sole-source award raises concerns about transparency and fairness in procurement.
Long contract duration increases risk of cost overruns and performance issues.
No indication of small business participation could limit economic opportunities.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established manufacturer like Beechcraft Corporation suggests potential for reliable delivery.
Contract supports a specific defense program (Peace Dragon), indicating strategic alignment.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a key component of the broader aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and stringent regulatory requirements. Spending in this area is often driven by national security needs and technological advancements. Comparable spending benchmarks would typically involve other large-scale defense aircraft procurements, which are often sole-sourced due to specialized requirements.

Small Business Impact

The contract details indicate that small business participation was not a stated requirement or set-aside. This means that opportunities for small businesses to participate as prime contractors or significant subcontractors are likely limited. Without specific subcontracting plans mandated, the direct impact on the small business ecosystem in this sector may be minimal, potentially concentrating the economic benefits with the prime contractor.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. The firm-fixed-price nature of the award provides a degree of cost control. However, the sole-source aspect means that transparency in the negotiation process and the justification for the price are critical areas for oversight. Further details on specific accountability measures and Inspector General involvement would require deeper access to contract documentation.

Related Government Programs

Peace Dragon Program
Aircraft Manufacturing Contracts
Department of Defense Procurement
Sole-Source Defense Contracts

Risk Flags

Sole-source procurement
Lack of competition
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $122.9 million to BEECHCRAFT CORPORATION. 9 MONTH CLS FOR PEACE DRAGON PROGRAM

Who is the contractor on this award?

The obligated recipient is BEECHCRAFT 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 $122.9 million.

What is the period of performance?

Start: 2011-01-01. End: 2016-09-15.

What is the specific nature of the Peace Dragon program and why was this aircraft manufacturing contract awarded on a sole-source basis?

The Peace Dragon program is a classified initiative within the Department of Defense, likely focused on intelligence, surveillance, and reconnaissance (ISR) or electronic warfare capabilities, given the typical use of specialized aircraft. The sole-source award suggests that Beechcraft Corporation (or a predecessor/subsidiary) possessed unique intellectual property, specialized manufacturing capabilities, or existing airframes that were deemed essential and irreplaceable by other potential vendors. This could be due to proprietary technology, unique integration expertise, or the need for seamless compatibility with existing classified systems. Without access to the specific justification documentation for the sole-source award, the precise reasons remain speculative but are typically rooted in national security imperatives and the unavailability of alternative solutions.

How does the $122.8 million contract value compare to similar aircraft manufacturing contracts awarded by the DoD, particularly sole-source ones?

Comparing this $122.8 million contract value requires context regarding the specific type of aircraft and its intended role. For specialized ISR or electronic warfare platforms, this figure can be within the expected range, especially considering the long development and manufacturing timelines. However, sole-source contracts, by their nature, often command a premium compared to competitively bid programs. Without knowing the exact specifications and quantity of aircraft, a direct comparison is difficult. Generally, sole-source awards for complex defense systems tend to be higher than their competitive counterparts due to the lack of price pressure. Benchmarking would ideally involve looking at other sole-source awards for similar complexity and mission profiles, adjusted for inflation and program duration.

What are the primary risks associated with a sole-source contract of this magnitude and duration for aircraft manufacturing?

The primary risks associated with this sole-source contract include potential cost overruns, suboptimal performance, and a lack of innovation. Without competitive pressure, Beechcraft Corporation may have less incentive to control costs rigorously, potentially leading to the $122.8 million figure escalating. The long duration (over 5 years) increases the exposure to these risks, as well as the possibility of technological obsolescence or changing mission requirements that are harder to adapt to without competitive alternatives. Furthermore, the lack of transparency inherent in sole-source procurements can obscure potential inefficiencies or questionable pricing strategies, making robust government oversight crucial.

What is the expected performance outcome and effectiveness of the aircraft to be manufactured under the Peace Dragon program?

The expected performance outcome and effectiveness of the aircraft manufactured under the Peace Dragon program are directly tied to the program's objectives, which are classified. However, given the substantial investment and the nature of defense contracts, the expectation is that these aircraft will fulfill critical national security missions, likely involving intelligence gathering, surveillance, or electronic warfare. The effectiveness will be measured by their ability to operate reliably in intended environments, meet specific performance metrics (e.g., range, endurance, sensor capabilities), and provide actionable intelligence or support to other military operations. The firm-fixed-price contract structure aims to ensure that the contractor delivers the specified capabilities within the agreed budget, though actual effectiveness also depends on operational deployment and integration.

How has historical spending on aircraft manufacturing by the Department of Defense trended, and does this contract align with those trends?

Historical spending by the Department of Defense on aircraft manufacturing has been substantial, consistently representing a significant portion of the defense budget. Trends show a continuous demand for advanced platforms, including fighters, bombers, transport, and specialized ISR aircraft. Spending often fluctuates based on geopolitical conditions, technological advancements, and specific program lifecycles. This $122.8 million contract for the Peace Dragon program aligns with the DoD's ongoing investment in maintaining and modernizing its aerial capabilities, particularly in specialized roles. The prevalence of sole-source or limited-competition awards in this high-technology sector is also a historical trend, driven by the unique capabilities and long development cycles involved.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 10511 E CENTRAL AVE, WICHITA, KS, 67206

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

Financial Breakdown

Contract Ceiling: $124,162,632

Exercised Options: $124,162,632

Current Obligation: $122,860,394

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Timeline