DoD's $323M HITS-IV contract to Rockwell Collins for trainer software faces scrutiny over sole-source award and value

Contract Overview

Contract Amount: $323,300,182 ($323.3M)

Contractor: Rockwell Collins Simulation & Training Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2021-06-30

End Date: 2027-09-11

Contract Duration: 2,264 days

Daily Burn Rate: $142.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HITS-IV CONTRACT TO PROCURE 1 WST TO RETROFIT, TECH REFRESH, AND UPDATE SOFTWARE (CYBER/DSSC-4) ON HITS SUITE OF TRAINERS TO OBTAIN TECH DATA TO PROCURE MAINTENANCE, USER, CYBER SECURITY/SW TRAINING, AND ICS

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $323.3 million to ROCKWELL COLLINS SIMULATION & TRAINING SOLUTIONS LLC for work described as: HITS-IV CONTRACT TO PROCURE 1 WST TO RETROFIT, TECH REFRESH, AND UPDATE SOFTWARE (CYBER/DSSC-4) ON HITS SUITE OF TRAINERS TO OBTAIN TECH DATA TO PROCURE MAINTENANCE, USER, CYBER SECURITY/SW TRAINING, AND ICS Key points: 1. The contract's value, exceeding $323 million, warrants close examination due to its sole-source nature. 2. Competition dynamics are absent, raising concerns about potential overpricing and reduced value for taxpayer funds. 3. Risk indicators include the lack of competitive bidding and the long duration of the contract. 4. Performance context is tied to critical training systems for the Navy, emphasizing the need for robust oversight. 5. The sector positioning is within defense training and simulation, a specialized but crucial area for military readiness.

Value Assessment

Rating: questionable

The contract's value of over $323 million for software maintenance, user support, and cybersecurity on training systems is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of transparency in the award process makes it challenging to assess whether the government is receiving fair value for its investment. Further analysis would be needed to compare the scope of services and the pricing structure to industry standards for similar defense training systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required supplies or services. The absence of competition means that multiple bidders were not evaluated, and there was no opportunity for price discovery through a bidding process. This raises concerns about whether alternative solutions or more cost-effective options were overlooked.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially leading to higher costs for taxpayers. It also reduces the incentive for contractors to offer their best pricing upfront.

Public Impact

Naval personnel will benefit from updated and maintained training systems, enhancing their readiness and operational effectiveness. The services delivered include crucial software updates, cybersecurity enhancements, and ongoing user support for HITS trainers. The geographic impact is primarily within the Department of the Navy's training commands, supporting various naval aviation and operational training programs. Workforce implications include the need for skilled personnel to maintain and update complex simulation and training software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Long contract duration (2021-2027) increases exposure to potential cost overruns or performance issues.
Sole-source award limits opportunities for small businesses to participate as prime contractors.

Positive Signals

Contract supports critical training infrastructure for the Navy, essential for military readiness.
Focus on cybersecurity updates is vital in the current threat landscape.
Firm Fixed Price contract type provides some cost certainty for the government.

Sector Analysis

The defense training and simulation sector is a significant market within the broader aerospace and defense industry. Companies like Rockwell Collins are key players in providing advanced simulation technologies, including software maintenance and updates, which are critical for military readiness. This contract fits within the segment of the market focused on sustainment and modernization of existing training platforms, rather than new system development. Comparable spending benchmarks are difficult to establish without competitive data, but the overall defense training market is valued in the billions annually.

Small Business Impact

This contract was not competed and did not include a small business set-aside. As a sole-source award to a large business, it offers no direct subcontracting opportunities for small businesses through a competitive process. While Rockwell Collins may engage small businesses as subcontractors, the primary award mechanism does not prioritize small business participation. This limits the direct impact on the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are established through the contract terms and conditions, including performance metrics and reporting requirements. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

HITS-IV Contract
Navy Training Systems
Defense Software Sustainment
Cybersecurity for Training Platforms
Rockwell Collins Simulation & Training

Risk Flags

Sole-source award lacks competition
Potential for cost overruns due to long duration
Limited transparency in pricing and selection
Dependency on a single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $323.3 million to ROCKWELL COLLINS SIMULATION & TRAINING SOLUTIONS LLC. HITS-IV CONTRACT TO PROCURE 1 WST TO RETROFIT, TECH REFRESH, AND UPDATE SOFTWARE (CYBER/DSSC-4) ON HITS SUITE OF TRAINERS TO OBTAIN TECH DATA TO PROCURE MAINTENANCE, USER, CYBER SECURITY/SW TRAINING, AND ICS

Who is the contractor on this award?

The obligated recipient is ROCKWELL COLLINS SIMULATION & TRAINING SOLUTIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $323.3 million.

What is the period of performance?

Start: 2021-06-30. End: 2027-09-11.

What is the track record of Rockwell Collins Simulation & Training Solutions LLC with Department of Defense contracts, particularly sole-source awards?

Rockwell Collins Simulation & Training Solutions LLC, now part of Collins Aerospace, has a long history of contracting with the Department of Defense, including the Navy. They are a major provider of simulation and training systems. While specific data on their sole-source awards is not detailed here, large defense contractors often receive sole-source contracts for specialized systems where they are the incumbent or sole provider. Analyzing their past performance on similar contracts, including any past issues or successes, would provide context for this award. Their overall track record in delivering complex training solutions is generally considered strong, but the specifics of sole-source awards always warrant scrutiny regarding pricing and necessity.

How does the pricing of this contract compare to similar sole-source or competitively awarded contracts for defense training software maintenance and updates?

Direct comparison of pricing is challenging due to the sole-source nature of this $323 million HITS-IV contract. Without competitive bids, there's no benchmark to assess if the pricing is fair market value. Typically, sole-source contracts are more expensive than competitively awarded ones. To assess value, one would need to compare the per-unit costs for specific services (e.g., software updates, cybersecurity patches, user support hours) against industry standards for similar defense training systems or against previous contracts awarded to Rockwell Collins for comparable services. The long duration and scope of this contract further complicate direct comparisons, requiring a detailed breakdown of the services and associated costs.

What are the primary risks associated with a sole-source award of this magnitude for critical training systems?

The primary risks associated with a sole-source award of this magnitude include potential overpricing, lack of innovation, and reduced accountability. Without competition, the contractor has less incentive to offer the most competitive price or to innovate solutions. There's also a risk that the government might not be aware of or have access to more cost-effective alternatives. For critical training systems, a sole-source award could also mean a dependency on a single vendor, which poses risks if that vendor experiences financial difficulties or changes its business strategy. Furthermore, the lack of transparency inherent in sole-source awards can obscure potential performance issues or inefficiencies.

What is the expected effectiveness of the HITS-IV contract in improving the Navy's training capabilities?

The HITS-IV contract is expected to improve the Navy's training capabilities by ensuring the HITS suite of trainers remains technologically current, secure, and fully functional. This includes retrofitting, tech refreshes, and software updates, which are crucial for maintaining the fidelity and realism of training simulations. Enhanced cybersecurity is vital to protect sensitive training data and prevent disruptions. By providing ongoing maintenance and user support, the contract aims to minimize downtime and ensure that naval personnel receive high-quality, up-to-date training, thereby enhancing overall readiness and operational effectiveness. The effectiveness will ultimately depend on the contractor's performance and the government's oversight.

What are the historical spending patterns for the HITS program or similar Navy training systems, and how does this contract fit within them?

Historical spending patterns for the HITS program and similar Navy training systems would likely show a consistent investment in maintaining and upgrading simulation and training capabilities. These systems often require significant lifecycle support, including software updates, hardware maintenance, and technology refreshes, leading to substantial long-term contracts. This $323 million HITS-IV contract, spanning from 2021 to 2027, represents a significant investment in the sustainment and modernization of the HITS trainer suite. It fits within the pattern of ongoing expenditure required to keep advanced training platforms operational and relevant, reflecting the Navy's commitment to maintaining a high level of training proficiency.

Are there any specific performance metrics or key performance indicators (KPIs) defined in the contract to measure success?

While the provided data does not detail specific performance metrics or KPIs for the HITS-IV contract, it is standard practice for definitive contracts, especially those of this magnitude and duration, to include such measures. These KPIs would typically relate to aspects like system uptime, response times for technical support, successful completion of software updates and patches, cybersecurity compliance, and user satisfaction. The Firm Fixed Price (FFP) contract type suggests that the contractor is responsible for delivering the specified services within the agreed-upon price, and performance metrics would be used to ensure this delivery meets the government's requirements. The absence of this detail in the summary data limits a full assessment of performance accountability.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Other Commercial and Service Industry Machinery Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6134021R0025

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 52498

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

Financial Breakdown

Contract Ceiling: $339,723,240

Exercised Options: $323,300,182

Current Obligation: $323,300,182

Subaward Activity

Number of Subawards: 110

Total Subaward Amount: $46,297,823

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline