DoD awards $30.5M for target missiles, with FMS funds from Australia and Japan

Contract Overview

Contract Amount: $30,541,551 ($30.5M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2013-09-05

End Date: 2016-09-30

Contract Duration: 1,121 days

Daily Burn Rate: $27.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: REPLACEMENT IN KIND FOR USG INVENTORY FOR 3 GQM-163A TARGETS FOR FULL RATE PRODUCTION LOT 7, 2 PURCHASED WITH FMS AUSTRALIA FUNDS AND 1 PURCHASED WITH FMS JAPAN FUNDS.

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85286

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $30.5 million to ORBITAL SCIENCES LLC for work described as: REPLACEMENT IN KIND FOR USG INVENTORY FOR 3 GQM-163A TARGETS FOR FULL RATE PRODUCTION LOT 7, 2 PURCHASED WITH FMS AUSTRALIA FUNDS AND 1 PURCHASED WITH FMS JAPAN FUNDS. Key points: 1. Contract awarded for replacement inventory of target missiles. 2. Utilizes Foreign Military Sales funds, indicating international cooperation. 3. Sole-source award suggests limited market availability or specific requirements. 4. Firm Fixed Price contract type aims to control costs. 5. Long performance period of over three years. 6. Manufacturing sector focused on guided missiles and space vehicles.

Value Assessment

Rating: fair

The contract value of $30.5 million for three target missiles appears high on a per-unit basis, especially considering the 'replacement in kind' nature. Without specific technical details or comparable sole-source procurements, it's difficult to definitively benchmark value. However, the use of FMS funds might introduce complexities that influence pricing. Further analysis would require understanding the specific capabilities and production costs of the GQM-163A.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating that Orbital Sciences LLC was the sole provider for these specific GQM-163A target missiles. This could be due to proprietary technology, unique manufacturing capabilities, or a lack of alternative suppliers for this particular system. The absence of competition limits price discovery and may result in higher costs for the government.

Taxpayer Impact: Taxpayers may bear a higher cost due to the lack of competitive bidding. The government's ability to negotiate favorable terms is reduced when only one supplier is available.

Public Impact

The U.S. Department of Defense benefits from replenished inventory of critical target systems. Australia and Japan, through FMS, acquire essential training and testing capabilities. The contract supports the defense industrial base, specifically in missile manufacturing. Workforce in the guided missile and space vehicle manufacturing sector is supported.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs.
Lack of transparency in the sole-source justification.
Long contract duration could lead to cost overruns if not managed effectively.

Positive Signals

Firm Fixed Price contract type provides cost certainty.
Utilizes FMS funds, fostering international partnerships.
Addresses a critical need for replacement inventory.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of the aerospace and defense industry. This sector is characterized by high technological barriers to entry, significant R&D investment, and often limited numbers of qualified manufacturers. Spending in this sector is driven by national security requirements and technological advancements in defense capabilities. Comparable spending benchmarks would typically involve other advanced weapons systems procurement.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of guided missile manufacturing, it is unlikely that small businesses would be primary contractors for such a system. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides a degree of cost control. Transparency is limited due to the sole-source award, and specific accountability measures would be detailed in the contract itself.

Related Government Programs

Missile Systems Procurement
Target Drone Systems
Foreign Military Sales Programs
Defense Inventory Management

Risk Flags

Sole-source award
Potential for cost overruns
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.5 million to ORBITAL SCIENCES LLC. REPLACEMENT IN KIND FOR USG INVENTORY FOR 3 GQM-163A TARGETS FOR FULL RATE PRODUCTION LOT 7, 2 PURCHASED WITH FMS AUSTRALIA FUNDS AND 1 PURCHASED WITH FMS JAPAN FUNDS.

Who is the contractor on this award?

The obligated recipient is ORBITAL SCIENCES 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 $30.5 million.

What is the period of performance?

Start: 2013-09-05. End: 2016-09-30.

What is the historical spending pattern for GQM-163A target missiles by the Department of Defense?

Historical spending data for the GQM-163A target missile program is not explicitly provided in this data snippet. However, the contract indicates a 'replacement in kind' need, suggesting prior procurements. To understand historical patterns, one would need to access broader contract databases and analyze previous awards for this specific missile system. This would involve looking at the number of units procured, contract values over time, and the contracting agencies involved. Analyzing trends in unit costs and total program spending would offer insights into the long-term investment in this capability and identify any significant fluctuations or increases in demand.

How does the unit cost of these GQM-163A target missiles compare to similar systems or previous procurements?

The provided data does not offer sufficient information to compare the unit cost of these GQM-163A target missiles. The total award of $30.5 million for three units results in a nominal unit cost of approximately $10.17 million. However, this figure is for a sole-source procurement and includes a long performance period, which may encompass various support and production-related costs beyond the basic unit price. A meaningful comparison would require access to data on other sole-source or competed procurements of the GQM-163A, as well as data on comparable target missile systems from other manufacturers. Without such benchmarks, assessing the value-for-money of this specific award is challenging.

What are the specific risks associated with a sole-source award for critical defense inventory?

Sole-source awards for critical defense inventory carry several inherent risks. Foremost among these is the potential for inflated pricing due to the absence of competitive pressure, which can lead to inefficient use of taxpayer funds. There is also a risk of reduced innovation, as the sole provider may have less incentive to improve efficiency or develop more cost-effective solutions. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; any disruption in the contractor's operations could significantly impact the availability of critical inventory. Finally, the lack of competition can limit the government's leverage in contract negotiations and oversight.

What is the track record of Orbital Sciences LLC in delivering complex missile systems?

Orbital Sciences LLC, now part of Northrop Grumman, has a significant track record in aerospace and defense, including the development and production of various missile systems and space vehicles. They have been involved in numerous government contracts, demonstrating capabilities in complex manufacturing and program execution. Their experience with the GQM-163A specifically suggests a history of delivering this particular target missile. A comprehensive assessment of their track record would involve reviewing past performance evaluations, on-time delivery rates, and adherence to quality standards across their portfolio of defense contracts.

How do Foreign Military Sales (FMS) funds impact the cost and oversight of this contract?

The use of Foreign Military Sales (FMS) funds from Australia and Japan introduces specific considerations for cost and oversight. While the contract is managed by the U.S. Department of Defense, the FMS process involves agreements between the U.S. government and the partner nations. Pricing for FMS cases is determined based on U.S. government costs, including program management, and may include administrative surcharges. Oversight ensures that the delivered systems meet the requirements of both the U.S. and the partner nations. The FMS framework aims to provide these allies with defense articles and services while ensuring fair pricing and proper accountability throughout the acquisition process.

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: N0001913R0014

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 1575 SOUTH PRICE RD, CHANDLER, AZ, 85286

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

Financial Breakdown

Contract Ceiling: $30,541,551

Exercised Options: $30,541,551

Current Obligation: $30,541,551

Subaward Activity

Number of Subawards: 73

Total Subaward Amount: $52,949,902

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline