DoD awards $238M for tactical UAVs, with Textron Systems Corporation as the sole provider

Contract Overview

Contract Amount: $238,363,386 ($238.4M)

Contractor: Textron Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2006-05-04

End Date: 2011-04-30

Contract Duration: 1,822 days

Daily Burn Rate: $130.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200608!003319!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0292 !A!N! !N! ! !20060504!20090430!003090198!003090198!001527852!N!AAI CORPORATION !124 INDUSTRY LN !HUNT VALLEY !MD!21031!41100!005!24!HUNT VALLEY !BALTIMORE !MARYLAND !+000087154526!N!N!000000000000!1550!DRONES !A1A!AIRFRAMES AND SPARES !272 !TACTICAL UAV !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: HUNT VALLEY, BALTIMORE County, MARYLAND, 21031

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $238.4 million to TEXTRON SYSTEMS CORPORATION for work described as: 200608!003319!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0292 !A!N! !N! ! !20060504!20090430!003090198!003090198!001527852!N!AAI CORPORATION !124 INDUSTRY LN !HUNT VALLEY !MD!21031!41100!005!24!HUNT VALLEY !BALT… Key points: 1. This contract represents a significant investment in tactical unmanned aerial vehicles (UAVs). 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited innovation. 3. A long contract duration of over 3 years suggests a sustained need for these specific UAV capabilities. 4. The award falls under the Aircraft Manufacturing industry, highlighting the defense sector's reliance on specialized aerospace components. 5. The absence of competition raises questions about the government's efforts to secure the best value for taxpayer dollars. 6. Performance metrics and delivery schedules will be critical to monitor for successful program execution.

Value Assessment

Rating: questionable

The total award amount of $238,363,385.68 for tactical UAVs is substantial. Without comparable sole-source contracts for similar systems, it is difficult to definitively benchmark value. However, the lack of competition inherently limits the government's ability to negotiate the most favorable pricing. The contract's fixed-price nature provides some cost certainty, but the absence of competitive pressure could lead to less efficient cost structures for the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Textron Systems Corporation, was solicited. This approach is typically used when a unique capability is required, or when only one source can fulfill the requirement. The lack of competition means that the government did not explore alternative solutions or pricing from other potential suppliers, which could limit price discovery and potentially lead to higher costs.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, there is less pressure on the contractor to offer the lowest possible price, potentially resulting in a less efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Army, which will receive advanced tactical UAV capabilities for reconnaissance and surveillance. The contract will deliver a fleet of tactical UAVs, enhancing the Army's operational effectiveness in various mission scenarios. The geographic impact is national, with potential deployment to various operational theaters. This contract supports jobs within the aerospace and defense manufacturing sector, particularly at Textron Systems Corporation and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of competitive bidding may stifle innovation by not encouraging alternative solutions.
Long contract duration could lead to complacency or reduced urgency in performance if not closely managed.
Reliance on a single provider creates a single point of failure for critical UAV capabilities.

Positive Signals

Award to an established defense contractor with likely experience in UAV development and production.
Definitive contract structure provides a clear framework for a long-term relationship.
Fixed-price contract type offers cost predictability for the government.

Sector Analysis

The defense industry's unmanned aerial vehicle (UAV) sector is a rapidly growing market driven by increasing demand for intelligence, surveillance, and reconnaissance (ISR) capabilities. This contract for tactical UAVs fits within this broader trend. The total addressable market for defense UAVs is in the tens of billions of dollars annually, with significant government investment. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of tactical UAVs and the sole-source award, but this contract represents a substantial portion of spending for this specific capability within the Army.

Small Business Impact

This contract does not appear to have a small business set-aside component. The award is made directly to Textron Systems Corporation, a large defense contractor. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem is likely minimal unless Textron actively engages small businesses in its supply chain for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards, delivery schedules, and quality assurance provisions. Transparency may be limited due to the sole-source nature, but contract awards are generally reported in federal databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Tactical Unmanned Aerial Vehicles
Unmanned Aircraft Systems
Defense Procurement
Aerospace Manufacturing
Intelligence, Surveillance, and Reconnaissance (ISR) Systems

Risk Flags

Sole-source award may indicate limited competition, potentially leading to higher costs.
Long contract duration increases exposure to technological obsolescence.
Lack of detailed performance metrics in summary data requires further investigation.
Reliance on a single contractor presents a single point of failure risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $238.4 million to TEXTRON SYSTEMS CORPORATION. 200608!003319!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0292 !A!N! !N! ! !20060504!20090430!003090198!003090198!001527852!N!AAI CORPORATION !124 INDUSTRY LN !HUNT VALLEY !MD!21031!41100!005!24!HUNT VALLEY !BALTIMORE !MARYLAND !+000087154526!N!N!000000000000!1550!DRONES !A1A!AIRFRAMES AND SPARES !272 !TACTICAL UAV !336411!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is TEXTRON SYSTEMS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $238.4 million.

What is the period of performance?

Start: 2006-05-04. End: 2011-04-30.

What is the specific type and capability of the tactical UAVs being procured under this contract?

The contract specifies 'TACTICAL UAV' under the Product Service Code (PSC) NAICS code 336411 (Aircraft Manufacturing). While the exact model or detailed specifications are not provided in the abbreviated data, 'tactical UAV' generally refers to smaller, often man-portable or rapidly deployable unmanned aircraft used for short-range reconnaissance, surveillance, target acquisition, and potentially light strike missions. These systems are designed to provide battlefield awareness to ground units. The 'AIRFRAMES AND SPARES' designation further indicates the procurement includes the physical structure of the drones and replacement parts.

Why was this contract awarded on a sole-source basis, and what alternatives were considered?

The provided data indicates the contract was 'NOT COMPETED' and awarded as a 'SOLE SOURCE'. Typically, sole-source awards are justified when only one responsible source is available or capable of meeting the agency's needs. This could be due to unique technology, proprietary rights, or a lack of other qualified vendors. Without further documentation from the Department of the Army, the specific justification for deeming Textron Systems Corporation the sole source remains unclear. Standard procurement regulations require agencies to conduct market research to determine if competitive sources exist before resorting to a sole-source award.

How does the $238 million contract value compare to historical spending on similar tactical UAV programs?

Comparing this $238 million contract value to historical spending on similar tactical UAV programs is challenging without more specific details on the UAVs' capabilities and quantities. However, the amount is substantial, reflecting a significant investment. Historical data from the Department of Defense shows consistent and growing investment in UAV technology across various classes (small, medium, and large). For tactical UAVs specifically, multi-year contracts can easily reach hundreds of millions of dollars, especially when including airframes, spares, training, and support. The sole-source nature here means this entire sum is directed to one provider, making direct comparisons to competitively bid programs less straightforward in terms of value for money.

What are the key performance indicators (KPIs) and delivery milestones outlined in the contract?

The provided abbreviated data does not detail the specific Key Performance Indicators (KPIs) or delivery milestones. However, for a contract of this nature (Definitive Contract, Firm Fixed Price), KPIs would typically revolve around factors such as on-time delivery of airframes and spares, system reliability (e.g., Mean Time Between Failures - MTBF), operational readiness rates, and potentially performance metrics related to flight endurance, range, and payload capacity. Delivery milestones would likely be phased throughout the contract period (May 4, 2006, to April 30, 2011) to ensure a steady supply of UAVs and components to meet the Army's operational requirements.

What is Textron Systems Corporation's track record with the U.S. Army and in the UAV market?

Textron Systems Corporation, a subsidiary of Textron Inc., has a well-established presence in the defense sector and a significant track record in developing and producing unmanned systems, including UAVs. They are known for platforms like the Shadow tactical UAV, which has seen extensive use by the U.S. Army. Their experience spans decades, encompassing design, manufacturing, and support services for various military applications. The U.S. Army has been a major customer for Textron's unmanned systems, indicating a strong existing relationship and a demonstrated capability to meet the service's requirements, which likely contributed to the sole-source award.

Are there any identified risks associated with this contract, such as technical obsolescence or contractor performance issues?

Potential risks associated with this contract include technical obsolescence, given the rapid pace of technological advancement in the UAV sector. If the procured systems are based on older technology, they may become outdated relatively quickly. Contractor performance is always a risk, although Textron Systems has a generally strong reputation. However, the sole-source nature means the Army is heavily reliant on Textron's ability to deliver on time, within budget, and to specification. Without competition, there's less external pressure to mitigate these risks proactively. The long duration also increases the potential for unforeseen issues to arise during the contract period.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: Textron Inc

Address: 124 INDUSTRY LN, HUNT VALLEY, MD, 21031

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $225,230,180

Exercised Options: $225,230,180

Current Obligation: $238,363,386

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline