Alliant Techsystems received $52.9M for AN/AAR-47 systems, a sole-source procurement with limited competition

Contract Overview

Contract Amount: $52,909,090 ($52.9M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2012-11-08

End Date: 2016-08-31

Contract Duration: 1,392 days

Daily Burn Rate: $38.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY12 AND FY13 PRODUCTION PROCUREMENTS OF AN/AAR-47 A(V)2 AND B(V)2 IOSCS (SENSORS), CPS (PROCESSORS), CSSS (COUNTERMEASURE SIGNAL SIMULATORS), A-TO-B(V)2 RETROFITS AND REPAIRS.

Place of Performance

Location: NORTHRIDGE, LOS ANGELES County, CALIFORNIA, 91324

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $52.9 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: FY12 AND FY13 PRODUCTION PROCUREMENTS OF AN/AAR-47 A(V)2 AND B(V)2 IOSCS (SENSORS), CPS (PROCESSORS), CSSS (COUNTERMEASURE SIGNAL SIMULATORS), A-TO-B(V)2 RETROFITS AND REPAIRS. Key points: 1. The contract awarded to Alliant Techsystems Operations LLC for AN/AAR-47 systems and related components represents a significant investment in defense electronics. 2. The procurement was conducted on a sole-source basis, indicating a lack of competitive bidding for these specific defense systems. 3. The contract duration spans over three years, suggesting a sustained need for these components within the Department of Defense. 4. The firm-fixed-price contract type aims to provide cost certainty for the government, though the absence of competition may limit price negotiation. 5. The primary beneficiary of this contract is the Department of Defense, ensuring the continued operation and modernization of critical aircraft survivability equipment. 6. The manufacturing of these specialized systems falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. While the firm-fixed-price structure offers some cost predictability, the absence of competition raises questions about whether the government secured the best possible price. Without comparable contract data or market analysis for the AN/AAR-47 systems, it's difficult to definitively assess value for money. The total award amount of $52.9 million over several years suggests a substantial investment, but the efficiency of this spending cannot be fully evaluated without a competitive landscape.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Alliant Techsystems Operations LLC, was considered. This approach is typically employed when a unique capability or proprietary technology is required, or when only one source can fulfill the requirement. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a multi-bidder environment. This can potentially lead to higher costs compared to a competitively awarded contract.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price for the goods and services. The government relies on negotiation and justification of costs rather than market forces to determine fair pricing.

Public Impact

The Department of Defense benefits directly through the acquisition of essential aircraft survivability equipment, enhancing the safety and effectiveness of its aerial platforms. The contract supports the production of AN/AAR-47 systems, which are crucial for detecting and countering missile threats, thereby improving pilot and aircraft survivability. The contract's performance period extends from November 2012 to August 2016, indicating a multi-year commitment to equipping and maintaining defense assets. The manufacturing activities are likely to support a specialized workforce within Alliant Techsystems Operations LLC, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the bidding process due to single-bidder consideration.
Dependence on a single contractor for critical defense systems could pose supply chain risks.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Ensures the continued availability of vital aircraft survivability equipment.
Supports the defense industrial base and specialized manufacturing capabilities.

Sector Analysis

The defense electronics sector is characterized by high research and development costs, stringent quality requirements, and long product lifecycles. Contracts for systems like the AN/AAR-47 are critical for maintaining technological superiority and operational readiness. The market for such specialized components is often consolidated, with a few key players dominating. Spending in this area is driven by evolving threat landscapes and the need for advanced countermeasures. Comparable spending benchmarks are difficult to establish for sole-source procurements, but the total value of $52.9 million over several years indicates a significant, albeit non-competitive, investment in this niche.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to Alliant Techsystems Operations LLC, a large defense contractor. There is no explicit information regarding subcontracting plans for small businesses within this sole-source award. The absence of a set-aside suggests that the primary focus was on fulfilling the specific technical requirements of the Department of Defense with a known provider, rather than on promoting small business participation through this particular procurement vehicle.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions. The firm-fixed-price nature of the contract provides a degree of accountability by establishing a set cost. However, the sole-source aspect limits the government's leverage in cost oversight compared to a competitive scenario. Transparency is moderate, as contract awards are publicly reported, but the rationale and negotiation details of sole-source procurements are often less accessible.

Related Government Programs

Aircraft Survivability Equipment
Missile Warning Systems
Defense Electronics Manufacturing
Avionics Systems Procurement
Department of Defense Contracts

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for higher costs
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.9 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. FY12 AND FY13 PRODUCTION PROCUREMENTS OF AN/AAR-47 A(V)2 AND B(V)2 IOSCS (SENSORS), CPS (PROCESSORS), CSSS (COUNTERMEASURE SIGNAL SIMULATORS), A-TO-B(V)2 RETROFITS AND REPAIRS.

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 $52.9 million.

What is the period of performance?

Start: 2012-11-08. End: 2016-08-31.

What is the track record of Alliant Techsystems Operations LLC in delivering similar defense systems?

Alliant Techsystems Operations LLC, now part of Northrop Grumman, has a long-standing history of providing complex defense systems and components to the U.S. military. The company has been a significant player in areas such as aerospace, defense electronics, and munitions. For the AN/AAR-47 system specifically, Alliant Techsystems has been a primary or sole provider for many years, indicating a deep understanding of the system's requirements and a proven ability to manufacture and deliver these critical components. Their extensive experience in this domain suggests a reliable track record for fulfilling such specialized defense contracts, although the lack of competition in this instance means performance is assessed against internal capabilities and contract terms rather than against competing vendors.

How does the value of this contract compare to similar procurements for aircraft survivability equipment?

Direct comparison of this $52.9 million sole-source contract to similar procurements is challenging due to the unique nature of sole-source awards and the specific technical requirements of the AN/AAR-47 system. In a competitive market, similar systems might be procured at varying price points depending on the number of bidders, technological advancements, and production volumes. However, sole-source contracts inherently lack the price discovery mechanism of competition, which can lead to higher unit costs. Without access to detailed cost breakdowns or data on comparable systems procured competitively, it's difficult to definitively state whether this contract represents optimal value for money. The duration of the contract (over three years) and the firm-fixed-price structure suggest an effort to manage costs predictably, but the absence of competition remains a key factor in value assessment.

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

The primary risks associated with this sole-source contract stem from the lack of competition. Firstly, there is a significant risk of paying a premium price, as Alliant Techsystems Operations LLC was the only bidder, potentially leading to reduced value for taxpayer money. Secondly, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers in the future if needed. Thirdly, without competitive pressure, there might be less incentive for the contractor to innovate or aggressively pursue cost efficiencies. Finally, reliance on a single supplier for critical defense components can introduce supply chain vulnerabilities if the contractor faces production issues or business disruptions.

How effective is the AN/AAR-47 system in providing aircraft survivability?

The AN/AAR-47 system is a crucial component of modern aircraft survivability equipment, designed to detect and alert aircrews to incoming missile threats. It typically integrates with countermeasures to help defeat these threats, thereby significantly increasing the chances of aircraft and crew survival in hostile environments. Its effectiveness is well-documented in military applications, where it serves as a primary defense against infrared-guided missiles. The continued procurement and retrofitting of these systems by the Department of Defense underscore their perceived effectiveness and ongoing importance in protecting military aviation assets across various platforms and mission types.

What are the historical spending patterns for the AN/AAR-47 system or similar aircraft survivability equipment?

Historical spending on the AN/AAR-47 system and similar aircraft survivability equipment (ASE) by the Department of Defense has been substantial over the years, reflecting the continuous need to protect military aircraft. Procurements often involve multi-year contracts for production, upgrades, and sustainment. While specific historical spending figures for the AN/AAR-47 prior to this $52.9 million award are not detailed here, it is understood that such systems represent a consistent line item in defense budgets due to evolving threats and the critical nature of survivability. Spending patterns are influenced by geopolitical factors, technological advancements in threat systems, and the operational tempo of military forces.

What is the significance of the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code in relation to this contract?

The NAICS code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' is highly relevant to this contract as it precisely categorizes the type of products being procured. This code encompasses establishments primarily engaged in manufacturing instruments and related devices for air and space navigation, as well as search, detection, and guidance equipment. The AN/AAR-47 system, being an advanced threat detection and warning system for aircraft, falls squarely within this classification. It signifies that the contract supports a specialized segment of the defense industrial base focused on high-technology manufacturing for aerospace and defense applications.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001912R0052

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 13133 34TH ST N, CLEARWATER, FL, 33762

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: $52,909,090

Exercised Options: $52,909,090

Current Obligation: $52,909,090

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline