DoD's $18.5M contract for aircraft parts awarded to Hamilton Sundstrand Corporation, a sole-source acquisition

Contract Overview

Contract Amount: $18,467,576 ($18.5M)

Contractor: Hamilton Sundstrand Corporation

Awarding Agency: Department of Defense

Start Date: 2023-11-15

End Date: 2024-11-14

Contract Duration: 365 days

Daily Burn Rate: $50.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GENERATOR,DIRECT CU

Place of Performance

Location: WINDSOR LOCKS, HARTFORD County, CONNECTICUT, 06096

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $18.5 million to HAMILTON SUNDSTRAND CORPORATION for work described as: GENERATOR,DIRECT CU Key points: 1. The contract's value of $18.5 million represents a significant investment in specialized aircraft components. 2. Sole-source award indicates potential lack of market competition or unique supplier capabilities. 3. The fixed-price contract structure shifts cost risk to the contractor. 4. This award falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code. 5. The contract duration of one year suggests a need for immediate or short-term supply. 6. The awardee, Hamilton Sundstrand Corporation, is a known entity in the aerospace sector.

Value Assessment

Rating: questionable

Benchmarking the value of this $18.5 million contract is challenging without specific part details and market comparisons. However, sole-source awards often carry a higher risk of inflated pricing due to the absence of competitive pressure. The firm fixed-price nature provides cost certainty for the government, but the overall value for money is questionable without a competitive process to validate pricing against market rates. Further analysis would require understanding the criticality and uniqueness of the parts procured.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Hamilton Sundstrand Corporation, was solicited. This typically occurs when a product or service is unique, proprietary, or only available from a single source. The lack of competition means the government did not benefit from a bidding process that could drive down prices or encourage innovation from multiple suppliers. The rationale for this sole-source award needs to be clearly documented and justified.

Taxpayer Impact: Taxpayers may be paying a premium for this contract due to the absence of competitive bidding. Without multiple offers, there is less assurance that the price reflects the best possible value.

Public Impact

The Department of the Navy benefits from the acquisition of critical aircraft parts, ensuring operational readiness. This contract supports the maintenance and operational capabilities of naval aviation assets. The geographic impact is primarily within Connecticut, where Hamilton Sundstrand Corporation is based. The award sustains jobs and economic activity within the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition raises concerns about whether the government secured the best possible value.
Absence of a competitive process may indicate a reliance on a single supplier, creating potential future dependency.
The specific nature of the 'Other Aircraft Parts' is not detailed, making it difficult to assess uniqueness or availability from other sources.

Positive Signals

Hamilton Sundstrand Corporation is a reputable contractor with established experience in aerospace.
The firm fixed-price contract provides cost certainty for the government.
The award supports critical defense needs for the Department of the Navy.
The contract duration is clearly defined, allowing for predictable budgeting.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant R&D investment. Contracts for aircraft parts are crucial for maintaining fleet readiness and operational capabilities. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category encompasses a wide range of components. Spending in this area is often driven by specific aircraft models and their maintenance schedules. Comparable spending benchmarks would depend heavily on the specific parts being procured and the overall fleet size and age.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a large corporation like Hamilton Sundstrand Corporation suggests that the components procured are likely specialized and may require capabilities not readily available from smaller firms. This could limit opportunities for small businesses to participate in this specific contract's supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited by the sole-source nature of the award; however, contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Naval Aviation Maintenance Programs
Aerospace Component Manufacturing
Defense Supply Chain Management

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Supply chain risk due to single-source dependency.
Lack of transparency regarding specific parts procured.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.5 million to HAMILTON SUNDSTRAND CORPORATION. GENERATOR,DIRECT CU

Who is the contractor on this award?

The obligated recipient is HAMILTON SUNDSTRAND CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.5 million.

What is the period of performance?

Start: 2023-11-15. End: 2024-11-14.

What specific aircraft parts are being procured under this contract, and what is their criticality to naval operations?

The provided data does not specify the exact aircraft parts being procured under this $18.5 million contract. The NAICS code '336413 - Other Aircraft Parts and Auxiliary Equipment Manufacturing' is broad and can encompass a wide array of components, from engine parts to avionics or structural elements. The criticality of these parts to naval operations is a key factor in assessing the justification for a sole-source award. If these parts are unique, proprietary, or essential for the continued operation of specific naval aircraft platforms with no viable alternatives, a sole-source award might be justifiable. However, without this specific information, it is difficult to definitively assess the necessity and potential risks associated with the procurement.

What is the historical spending pattern for similar aircraft parts procured by the Department of the Navy, and how does this contract compare?

Analyzing historical spending patterns for similar aircraft parts is crucial for benchmarking value. Without specific part details, a direct comparison is difficult. However, the Department of the Navy procures a vast quantity of aircraft parts annually, often through competitive solicitations. A sole-source award of $18.5 million for a one-year period suggests a potentially significant procurement. If similar parts have been competitively procured in the past for substantially less, or if the unit costs for comparable items are lower, this contract's value could be questioned. Conversely, if these are highly specialized or newly developed components, historical data might be less relevant, and the sole-source justification would need to be robust.

What is Hamilton Sundstrand Corporation's track record with sole-source contracts, particularly with the Department of Defense?

Hamilton Sundstrand Corporation, now part of RTX Corporation (formerly Raytheon Technologies), has a long history of supplying complex systems and components to the aerospace and defense industry, including the Department of Defense. As a major aerospace manufacturer, they are often a sole or primary source for proprietary components integrated into various aircraft platforms. Their track record with sole-source contracts would likely show a pattern of fulfilling requirements for specialized, high-technology parts where competition is limited due to intellectual property, design control, or unique manufacturing processes. Evaluating their performance on past sole-source awards, including on-time delivery, quality, and adherence to negotiated prices, would provide context for this current contract.

What are the potential risks associated with relying on a sole-source supplier for critical aircraft parts?

Relying on a sole-source supplier for critical aircraft parts presents several risks. Firstly, there is a significant risk of price escalation over time, as the government lacks the leverage of competitive bidding to negotiate favorable terms. Secondly, dependency on a single supplier can create vulnerabilities in the supply chain; any disruption at the supplier's end (e.g., production issues, financial instability, or geopolitical factors) can directly impact the government's ability to maintain its aircraft. Thirdly, it can stifle innovation, as there is less incentive for the supplier to improve products or processes when competition is absent. Finally, it can lead to a loss of technical knowledge within the government regarding alternative solutions or repair capabilities.

How does the firm fixed-price contract type mitigate or exacerbate risks in this sole-source scenario?

The firm fixed-price (FFP) contract type is generally favored by the government as it places the majority of the cost risk on the contractor. This means Hamilton Sundstrand Corporation is obligated to deliver the specified aircraft parts for the agreed-upon price, regardless of their actual costs incurred. In a sole-source scenario, FFP provides cost certainty for the government, preventing cost overruns if the contractor's expenses increase. However, it does not inherently guarantee the 'best' price; the initial negotiated price might still be high due to the lack of competition. Therefore, while FFP mitigates cost overrun risk for the government, it doesn't solve the potential issue of an inflated baseline price in a sole-source situation.

Industry Classification

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

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1 HAMILTON RD, WINDSOR LOCKS, CT, 06096

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: $18,467,576

Exercised Options: $18,467,576

Current Obligation: $18,467,576

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038321DZQ01

IDV Type: IDC

Timeline