DoD awards $18.8M contract for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $18,826,681 ($18.8M)

Contractor: Simmonds Precision Products Inc

Awarding Agency: Department of Defense

Start Date: 2024-07-01

End Date: 2027-11-30

Contract Duration: 1,247 days

Daily Burn Rate: $15.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CV AND MV MAO VSLED

Place of Performance

Location: VERGENNES, ADDISON County, VERMONT, 05491

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $18.8 million to SIMMONDS PRECISION PRODUCTS INC for work described as: CV AND MV MAO VSLED Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. The contract duration of over three years suggests a long-term need for these aircraft parts. 3. Fixed-price contract type aims to control costs, but the lack of competition is a concern. 4. The specific aircraft parts are crucial for maintaining operational readiness within the Navy. 5. The award to SIMMONDS PRECISION PRODUCTS INC warrants scrutiny regarding their track record and pricing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids. Without comparison to other offers, it's difficult to ascertain if the $18.8 million represents a fair market price. The fixed-price nature of the contract provides some cost certainty, but the absence of competition means the government cannot leverage market forces to secure the best possible pricing. Further analysis of historical pricing for similar components would be necessary to provide a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, SIMMONDS PRECISION PRODUCTS INC, was solicited. This significantly limits the opportunity for price discovery and competition. Without multiple bidders vying for the contract, the government may not be receiving the most cost-effective solution. The justification for a sole-source award would need to be thoroughly reviewed to understand why other potential suppliers were not considered.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as the government lacks the leverage that competition provides. This can result in less efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of the Navy, ensuring the continued operation and maintenance of its aircraft fleet. Services delivered include the provision of essential aircraft parts, critical for aviation readiness. The geographic impact is primarily within the Department of Defense's operational areas, supporting naval aviation activities. Workforce implications may include the need for skilled personnel to install and maintain these parts, supporting jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award raises concerns about the availability of alternative suppliers or potential for collusion.
Limited transparency in the procurement process due to non-competitive nature.
Potential for cost overruns if pricing is not adequately scrutinized.
Dependence on a single supplier could create supply chain risks.

Positive Signals

Fixed-price contract type helps to establish cost certainty.
The contract is for essential aircraft parts, supporting critical defense operations.
The award is to an established entity, SIMMONDS PRECISION PRODUCTS INC, suggesting some level of expertise.
The duration of the contract allows for consistent supply and planning.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components is often characterized by high barriers to entry due to technical expertise, certifications, and proprietary technology. While the overall defense spending is substantial, the market for specific, niche components like those likely supplied under this contract can be concentrated among a few qualified manufacturers. Benchmarking spending in this sub-sector requires detailed knowledge of specific part numbers and their associated production costs.

Small Business Impact

There is no indication that this contract includes a small business set-aside. The award to SIMMONDS PRECISION PRODUCTS INC, a presumably larger entity, suggests that subcontracting opportunities for small businesses may be limited unless explicitly mandated. The impact on the small business ecosystem would depend on whether SIMMONDS PRECISION PRODUCTS INC has a robust subcontracting plan that includes small businesses. Without such a plan, this contract may not directly benefit the small business sector.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management offices. Accountability measures are inherent in the fixed-price contract type, which aims to cap costs. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance or execution.

Related Government Programs

Aircraft Maintenance and Repair
Defense Procurement
Aerospace Component Manufacturing
Naval Aviation Support
Sole-Source Contracts

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.8 million to SIMMONDS PRECISION PRODUCTS INC. CV AND MV MAO VSLED

Who is the contractor on this award?

The obligated recipient is SIMMONDS PRECISION PRODUCTS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $18.8 million.

What is the period of performance?

Start: 2024-07-01. End: 2027-11-30.

What is the track record of SIMMONDS PRECISION PRODUCTS INC in fulfilling similar defense contracts?

Assessing the track record of SIMMONDS PRECISION PRODUCTS INC is crucial for understanding their reliability and past performance. A review of their contract history with the Department of Defense and other federal agencies would reveal their ability to meet delivery schedules, quality standards, and budgetary constraints. Information on past performance evaluations, any contract disputes, or corrective actions taken would provide valuable insights into their capabilities. Without specific data on their past performance, it is difficult to definitively assess their suitability for this critical $18.8 million contract.

How does the awarded price compare to historical pricing for similar aircraft parts?

Direct comparison of the awarded price to historical data for identical or highly similar aircraft parts is essential for value assessment. However, such data is often proprietary or not publicly available, especially for specialized components. If available, analyzing trends in pricing for these parts over time, considering inflation and material cost fluctuations, would be informative. The absence of competitive bidding makes this comparison even more critical, as it serves as a proxy for market validation. Without this benchmark, the $18.8 million figure lacks context regarding its fairness.

What are the specific risks associated with a sole-source award for critical aircraft components?

Sole-source awards for critical aircraft components carry several inherent risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most competitive bid. Secondly, it creates a dependency on a single supplier, which can be problematic if the supplier experiences production issues, financial instability, or decides to discontinue the product line. This dependency can also limit the government's leverage in negotiating future contracts or modifications. Furthermore, it raises concerns about the thoroughness of the market research conducted to justify the sole-source determination.

What is the expected impact of these aircraft parts on the operational effectiveness of the Navy's fleet?

The procurement of these aircraft parts is directly linked to the operational effectiveness of the Navy's fleet. These components are likely essential for maintaining the airworthiness and functionality of specific aircraft models. Ensuring a steady and reliable supply of these parts through this contract helps to minimize aircraft downtime, reduce maintenance backlogs, and maintain the readiness of naval aviation assets. The timely delivery and quality of these parts directly contribute to the Navy's ability to conduct its missions effectively, whether for combat, surveillance, or logistical support.

What is the historical spending pattern for this specific type of aircraft part or similar components by the Department of Defense?

Analyzing historical spending patterns for these or similar aircraft parts by the Department of Defense provides crucial context for the current $18.8 million award. Understanding the volume of purchases, the average price paid over time, and the number of suppliers utilized in the past can reveal trends and potential anomalies. Significant deviations from historical spending, especially in the absence of clear justifications like increased demand or technological upgrades, could signal issues with the current procurement. This historical data is vital for assessing whether the current contract represents a reasonable investment.

Were alternative procurement methods considered, and why was a sole-source approach deemed necessary?

The necessity of a sole-source approach for this contract requires thorough justification. Federal acquisition regulations typically mandate full and open competition unless specific exceptions apply. These exceptions might include the availability of only one responsible source, urgent and compelling needs, or specific national security requirements. Understanding the rationale behind bypassing competitive bidding is critical. This involves reviewing the justification documentation provided by the agency, which should detail why other potential sources were not viable and why this specific contractor was the only option.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001924R0038

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 100 PANTON RD, VERGENNES, VT, 05491

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: $18,826,681

Exercised Options: $18,826,681

Current Obligation: $18,826,681

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $3,041,400

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline