DoD awards $79M for AGM-88E missiles to Alliant Techsystems, a sole-source procurement

Contract Overview

Contract Amount: $79,186,442 ($79.2M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2012-09-10

End Date: 2016-08-31

Contract Duration: 1,451 days

Daily Burn Rate: $54.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AGM-88E AARGM - ITALIAN COOPERATIVE PROCUREMENT OF ALL-UP-ROUNDS (AURS), WITH OPTION FOR CAPRIVE AIR TRAINING MISSILES (CATMS), AND RELATED SERVICES AND SUPPORT EQUIPMENT

Place of Performance

Location: NORTHRIDGE, LOS ANGELES County, CALIFORNIA, 91324

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $79.2 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: AGM-88E AARGM - ITALIAN COOPERATIVE PROCUREMENT OF ALL-UP-ROUNDS (AURS), WITH OPTION FOR CAPRIVE AIR TRAINING MISSILES (CATMS), AND RELATED SERVICES AND SUPPORT EQUIPMENT Key points: 1. High-value contract for advanced anti-radiation missiles. 2. Sole-source procurement limits competitive pricing. 3. Risk of overpayment due to lack of competition. 4. Defense sector spending on advanced weaponry.

Value Assessment

Rating: questionable

The contract value of $79.2 million for AGM-88E AARGM missiles and related services is significant. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar missile systems or potential alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Alliant Techsystems Operations LLC. This lack of competition limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The sole-source nature of this procurement raises concerns about potential overspending, as competitive pressures that typically drive down costs are absent.

Public Impact

Procurement of advanced missile technology for defense. Potential for increased costs due to sole-source award. Impact on military readiness and strategic capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competition
Potential for cost overruns

Positive Signals

Acquisition of critical defense technology
Firm fixed price contract

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of defense spending. Benchmarks for similar advanced missile systems are often proprietary and difficult to ascertain publicly, especially in sole-source situations.

Small Business Impact

The contract was awarded to Alliant Techsystems Operations LLC, a large business. There is no indication of small business participation in this specific award, which is common for highly specialized defense manufacturing.

Oversight & Accountability

The contract was awarded by the Department of Defense, with oversight likely managed by the Defense Contract Management Agency. The sole-source nature warrants scrutiny to ensure fair pricing and value for taxpayer dollars.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited transparency on pricing justification
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $79.2 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. AGM-88E AARGM - ITALIAN COOPERATIVE PROCUREMENT OF ALL-UP-ROUNDS (AURS), WITH OPTION FOR CAPRIVE AIR TRAINING MISSILES (CATMS), AND RELATED SERVICES AND SUPPORT EQUIPMENT

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $79.2 million.

What is the period of performance?

Start: 2012-09-10. End: 2016-08-31.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. To ensure fair and reasonable pricing, the government usually conducts market research, analyzes cost proposals, and may use historical pricing data or independent government cost estimates. However, without competition, the effectiveness of these measures is inherently limited.

What are the long-term risks associated with relying on a single supplier for critical defense assets like the AGM-88E AARGM?

Long-term risks include potential price escalation, reduced innovation due to lack of competitive pressure, supply chain vulnerabilities if the sole supplier faces disruptions, and a diminished ability to adapt to evolving threats if alternative technologies are not explored. This dependence can also impact national security if the supplier's capabilities become outdated or unavailable.

How does the firm fixed price (FFP) contract type mitigate or exacerbate the risks associated with this sole-source procurement?

A firm fixed price contract shifts most of the risk to the contractor, providing cost certainty for the government. In a sole-source situation, this is beneficial as it caps the government's liability. However, it doesn't guarantee the price is optimal; the contractor may build in higher contingency due to the lack of competition, potentially leading to a higher FFP than a competed contract.

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: N0001912R0029

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 21301 BURBANK BLVD STE 100, WOODLAND HILLS, CA, 91367

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $79,186,443

Exercised Options: $79,186,443

Current Obligation: $79,186,442

Subaward Activity

Number of Subawards: 75

Total Subaward Amount: $85,031,879

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline