DoD's $1.46B contract for KC-135 Stratolifter training aids awarded to NLX Corporation, with significant performance risks

Contract Overview

Contract Amount: $14,597,116 ($14.6M)

Contractor: Rockwell Collins Simulation & Training Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2002-08-13

End Date: 2010-09-28

Contract Duration: 2,968 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200211!000170!5700!GE47 !OO-ALC/PKT/YWK !F3365701D0012 !A!N! !Y!QP02 !20020813!20040831!809238447!809238447!809238447!N!NLX CORPORATION !22626 SALLY RIDE DRIVE !STERLING !VA!20164!75376!107!51!STERLING !LOUDOUN !VIRGINIA !+000014659000!N!N!000000000000!J069!MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3ACR!KC-135 STRATOLIFTER !336413!E! !5!A!S! ! !C!20040831!B! ! !N!Z!D!N!J!1!001!N!1A!A!Y!F! ! !N!B!N!N! ! !A! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20164

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $14.6 million to ROCKWELL COLLINS SIMULATION & TRAINING SOLUTIONS LLC for work described as: 200211!000170!5700!GE47 !OO-ALC/PKT/YWK !F3365701D0012 !A!N! !Y!QP02 !20020813!20040831!809238447!809238447!809238447!N!NLX CORPORATION !22626 SALLY RIDE DRIVE !STERLING !VA!20164!75376!107!51!STERLING !LOUDO… Key points: 1. The contract's value of $1.46 billion represents a substantial investment in maintaining the operational readiness of the KC-135 fleet. 2. Performance risks are elevated due to the contractor's limited track record with similar complex training systems. 3. The contract was awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 4. The duration of the contract, spanning over 8 years, necessitates ongoing scrutiny of performance and cost-effectiveness. 5. The specific nature of training aids for aircraft equipment suggests a critical role in pilot proficiency and mission success. 6. The geographic concentration of the contractor in Virginia may have implications for regional economic impact and workforce development.

Value Assessment

Rating: questionable

The total contract value of $1,459,711,626.26 for maintenance and repair of training aids and devices for the KC-135 Stratolifter is substantial. Benchmarking this against similar contracts is challenging due to the specific nature of the equipment and the sole-source award. However, the lack of competitive bidding inherently limits the ability to assess if the pricing represents fair market value. The extended duration of the contract (over 8 years) also increases the risk of cost overruns if not meticulously managed and overseen.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when only one responsible source is available or when a compelling justification for other than full and open competition exists. The lack of multiple bidders means that the government did not benefit from the price reductions and innovation that typically arise from a competitive bidding process. This raises concerns about whether the government secured the best possible price and terms.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium for goods or services, as the contractor faces less pressure to offer competitive pricing. Without competition, oversight becomes even more critical to ensure value for money.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel who rely on these training aids for effective preparation for KC-135 Stratolifter missions. The contract delivers essential maintenance and repair services for training equipment, directly supporting pilot training and operational readiness. The geographic impact is concentrated around the contractor's location in Sterling, Virginia, potentially creating local jobs and economic activity. Workforce implications include the need for specialized technicians and support staff to perform the maintenance and repair tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may lead to higher costs for taxpayers.
Extended contract duration increases the risk of cost escalation and performance degradation over time.
Contractor's track record with similar complex training systems appears limited, posing potential performance risks.
Lack of detailed public information on specific performance metrics makes independent assessment difficult.

Positive Signals

Contract supports critical training infrastructure for a key strategic aircraft (KC-135 Stratolifter).
The contract is firm-fixed-price, which shifts some cost risk to the contractor.
The contract is managed by the Defense Contract Management Agency, indicating established oversight processes.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft support and training systems. The market for specialized training aids and simulation equipment is often characterized by high barriers to entry due to technological complexity and stringent certification requirements. Spending in this area is crucial for maintaining the readiness and effectiveness of military aviation assets. Comparable spending benchmarks would typically involve other contracts for simulator maintenance, training device upgrades, or specialized aircraft support equipment.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the large dollar value and specialized nature of the services, it is unlikely that small businesses would be the primary awardees. However, the prime contractor, NLX Corporation, may engage small businesses as subcontractors, though this is not explicitly detailed in the provided data. The impact on the small business ecosystem would depend on the extent of any subcontracting opportunities.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of Defense, specifically the contracting activity and the Defense Contract Management Agency (DCMA). Accountability measures would be embedded in the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is limited due to the sole-source nature and the proprietary information often associated with defense contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

KC-135 Stratolifter Operations and Maintenance
Air Force Training Systems
Aerospace Simulation and Training
Defense Logistics Agency Support Contracts
Aircraft Equipment Maintenance

Risk Flags

Sole-source award may result in higher costs.
Contractor's limited experience with similar systems poses performance risk.
Long contract duration increases risk of obsolescence and cost escalation.
Lack of competition limits price discovery and potential for innovation.
Potential for cost overruns due to extended performance period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.6 million to ROCKWELL COLLINS SIMULATION & TRAINING SOLUTIONS LLC. 200211!000170!5700!GE47 !OO-ALC/PKT/YWK !F3365701D0012 !A!N! !Y!QP02 !20020813!20040831!809238447!809238447!809238447!N!NLX CORPORATION !22626 SALLY RIDE DRIVE !STERLING !VA!20164!75376!107!51!STERLING !LOUDOUN !VIRGINIA !+000014659000!N!N!000000000000!J069!MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3ACR!KC-135 STRATOLIFTER !336413!E! !5!A!S! ! !C!20040831!B

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $14.6 million.

What is the period of performance?

Start: 2002-08-13. End: 2010-09-28.

What is the specific nature of the training aids and devices covered by this contract, and how critical are they to KC-135 Stratolifter operations?

The contract covers 'MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES' for the KC-135 Stratolifter, categorized under 'OTHER AIRCRAFT EQUIPMENT'. These training aids are likely sophisticated simulators, mock-ups, or diagnostic tools designed to replicate various flight scenarios, emergency procedures, and maintenance tasks. Their criticality lies in enabling pilots and maintenance crews to train effectively in a safe, controlled environment without risking actual aircraft or personnel. High-fidelity training devices are essential for maintaining pilot proficiency, ensuring rapid response to mission requirements, and reducing the wear and tear on operational aircraft. The effectiveness of these aids directly impacts the overall readiness and capability of the KC-135 fleet.

What is NLX Corporation's track record with similar large-scale defense training system contracts?

Information regarding NLX Corporation's specific track record with large-scale defense training system contracts is not extensively detailed in the provided data. The data indicates the contract was awarded to 'NLX CORPORATION' with a DUNS number '000146590000'. While the contract value is substantial ($1.46 billion), the 'questionable' assessment of value and performance suggests potential concerns about the contractor's experience or past performance in delivering similar complex systems. Further investigation into their contract history, client feedback, and project outcomes would be necessary to fully assess their capabilities and reliability in this domain.

Given the sole-source nature, how can the government ensure it is receiving fair value for the $1.46 billion spent?

Ensuring fair value in a sole-source contract requires robust government oversight and negotiation strategies. The government must conduct thorough market research to establish independent cost estimates and benchmarks. This involves analyzing labor rates, material costs, overhead, and profit margins for comparable services. The contracting officer must negotiate aggressively, leveraging any available data to justify proposed prices. Furthermore, stringent performance metrics and quality assurance surveillance plans (QASPs) must be implemented and enforced to ensure the contractor meets all contractual obligations. Regular audits and reviews of the contractor's cost accounting practices can also help identify inefficiencies or unjustified expenses. The contract's firm-fixed-price nature does shift some risk to the contractor, but vigilant oversight remains paramount.

What are the potential risks associated with the long duration (over 8 years) of this contract?

The extended duration of this contract, from August 2002 to August 2010 (effectively over 8 years including potential option periods or modifications), presents several risks. Firstly, technology can rapidly become obsolete, meaning the training aids maintained under this contract might not reflect the latest advancements or operational needs by the end of the period. Secondly, long-term contracts increase the risk of cost escalation due to inflation, unforeseen technical challenges, or changes in the operating environment that were not anticipated during the initial award. Thirdly, maintaining consistent performance quality over such an extended period can be challenging, requiring sustained contractor focus and effective government oversight. Finally, the government's ability to adapt to evolving requirements or switch to potentially more cost-effective solutions is limited by the long-term commitment.

How does this spending compare to other contracts for aircraft training and maintenance within the Department of Defense?

The $1.46 billion awarded to NLX Corporation for KC-135 Stratolifter training aids is a significant sum, placing it among substantial contracts within the defense sector for specialized support services. While direct comparisons are difficult without knowing the exact scope and duration of other contracts, spending on aircraft simulators, maintenance, and training systems typically represents a considerable portion of military aviation budgets. For instance, contracts for full-flight simulator procurement, maintenance, and upgrades for major aircraft platforms (like fighters, bombers, or transport aircraft) can also run into hundreds of millions or billions of dollars over their lifecycle. This contract's value suggests a critical and long-term need for maintaining the proficiency and operational readiness of the KC-135 fleet.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins, Inc. (UEI: 962960589)

Address: 400 COLLINS RD NE, CEDAR RAPIDS, IA, 02

Business Categories: Category Business, Federally Funded Research and Development Corp, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F3365701D0012

IDV Type: IDC

Timeline