DoD's $56M AARGM LRIP II Contract Awarded to Alliant Techsystems Operations LLC
Contract Overview
Contract Amount: $56,175,425 ($56.2M)
Contractor: Alliant Techsystems Operations LLC
Awarding Agency: Department of Defense
Start Date: 2010-07-30
End Date: 2013-06-28
Contract Duration: 1,064 days
Daily Burn Rate: $52.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AARGM LRIP II - FY10 PROCUREMENT
Place of Performance
Location: WOODLAND HILLS, LOS ANGELES County, CALIFORNIA, 91367
Plain-Language Summary
Department of Defense obligated $56.2 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: AARGM LRIP II - FY10 PROCUREMENT Key points: 1. Contract awarded for Guided Missile and Space Vehicle Manufacturing. 2. Significant value of $56.18M over 3 years. 3. Sole-source award raises questions about price discovery. 4. Alliant Techsystems Operations LLC is the sole contractor. 5. Awarded by the Department of the Navy.
Value Assessment
Rating: questionable
The contract value is substantial, but without competition, it's difficult to assess if the pricing is optimal. Benchmarking against similar missile system procurements would be necessary for a thorough evaluation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning there was no competition. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition in this sole-source award may result in a higher cost to taxpayers than if multiple vendors had vied for the contract.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The Department of Defense continues to rely on a single supplier for this critical missile system. Potential for cost overruns exists without competitive pressure to drive efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
Positive Signals
- Awarded to a known entity
- Firm Fixed Price contract type
Sector Analysis
This contract falls under the Guided Missile and Space Vehicle Manufacturing sector within the Department of Defense. Spending in this area is critical for national security, but often involves high R&D costs and specialized manufacturing capabilities.
Small Business Impact
There is no indication that small businesses were involved in this sole-source contract award. Further analysis would be needed to determine if subcontracting opportunities were explored.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste. The Department of Defense should justify the lack of competition and monitor contract performance closely.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on price justification
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, ca, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $56.2 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. AARGM LRIP II - FY10 PROCUREMENT
Who is the contractor on this award?
The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $56.2 million.
What is the period of performance?
Start: 2010-07-30. End: 2013-06-28.
What is the justification for awarding this contract sole-source, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's presumed the Department of Defense determined Alliant Techsystems Operations LLC was the only source capable of meeting the requirements. However, rigorous price analysis, including cost breakdowns and comparisons to similar systems, should have been conducted to ensure fair and reasonable pricing despite the absence of competition.
What are the long-term risks associated with relying on a single supplier for this critical defense component?
The primary long-term risk is a lack of innovation and potential price gouging due to the absence of competitive pressure. Dependence on a sole supplier can also create supply chain vulnerabilities, making the program susceptible to disruptions if the contractor faces financial difficulties, production issues, or geopolitical challenges. This can lead to increased costs and potential delays in critical defense capabilities.
How does the firm fixed price contract type mitigate or exacerbate the risks associated with this sole-source award?
A firm fixed price (FFP) contract shifts most of the risk to the contractor, making them responsible for all costs and for delivering the product at the agreed-upon price. This can be beneficial for the government by providing cost certainty. However, in a sole-source scenario, the FFP might be set at a higher baseline price due to the lack of competition, potentially leading to the government paying more than necessary if the contractor's actual costs are lower.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001909R0262
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)
Address: 21301 BURBANK BLVD STE 100, WOODLAND HILLS, CA, 32
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $56,175,425
Exercised Options: $56,175,425
Current Obligation: $56,175,425
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2010-07-30
Current End Date: 2013-06-28
Potential End Date: 2013-06-28 00:00:00
Last Modified: 2013-05-09
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