Textron Systems Corp awarded $541.9M for Afghan Army vehicle support, a sole-source contract

Contract Overview

Contract Amount: $541,934,732 ($541.9M)

Contractor: Textron Systems Corp

Awarding Agency: Department of Defense

Start Date: 2011-01-21

End Date: 2016-08-31

Contract Duration: 2,049 days

Daily Burn Rate: $264.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SUPPORT (TESTING PERSONNEL, REFURBISHMENT, SHIPPING) FOR PRODUCTION OF MASVS FOR THE AFGHAN NATIONAL ARMY

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70129

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $541.9 million to TEXTRON SYSTEMS CORP for work described as: SUPPORT (TESTING PERSONNEL, REFURBISHMENT, SHIPPING) FOR PRODUCTION OF MASVS FOR THE AFGHAN NATIONAL ARMY Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant duration of over 5 years suggests a long-term need for these services. 3. The contract covers a broad range of support, including testing, refurbishment, and shipping. 4. Focus on the Afghan National Army indicates a specific geopolitical and security objective. 5. The contract's value places it as a substantial investment in foreign military support. 6. Fixed-price contract type aims to control costs, but competition is key to realizing savings.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specific nature and sole-source award. The total value of over $541 million over five years indicates a significant investment. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for money. However, the firm fixed-price structure provides some cost certainty for the government.

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 among multiple vendors. This typically occurs when only one vendor possesses the necessary capabilities, technology, or is deemed essential for national security reasons. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiaries are the Afghan National Army, receiving critical support for their military vehicles. Services include testing, refurbishment, and shipping of MASVS (Mine-Resistant Ambush Protected Vehicles). The geographic impact is focused on Afghanistan, supporting U.S. foreign military aid objectives. Workforce implications may include Textron Systems employees and potentially subcontractors involved in the refurbishment and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential taxpayer savings.
Long contract duration may not adapt well to changing geopolitical needs or technological advancements.
Lack of transparency inherent in sole-source procurements can obscure true value for money.
Dependence on a single contractor for critical military support creates a single point of failure.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Textron Systems is a known entity in defense manufacturing, suggesting established capabilities.
Contract addresses a specific, critical need for allied military equipment sustainment.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically supporting military vehicle manufacturing and sustainment. The market for such specialized support services is often concentrated among a few key defense contractors. Spending in this sector is driven by geopolitical needs, military modernization programs, and foreign military sales. Comparable spending benchmarks would typically involve other large-scale sustainment contracts for military platforms.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Textron Systems actively engages them for subcontracting opportunities, which is not specified.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The firm fixed-price nature provides some level of cost control. Transparency is limited due to the sole-source nature. Further oversight details would depend on specific contract clauses and reporting requirements.

Related Government Programs

Foreign Military Sales Program
Afghanistan Security Forces Fund
Military Armored Vehicle Manufacturing
Defense Logistics and Sustainment Services

Risk Flags

Sole-source award
Lack of competitive bidding
Long contract duration
Geopolitical instability context

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $541.9 million to TEXTRON SYSTEMS CORP. SUPPORT (TESTING PERSONNEL, REFURBISHMENT, SHIPPING) FOR PRODUCTION OF MASVS FOR THE AFGHAN NATIONAL ARMY

Who is the contractor on this award?

The obligated recipient is TEXTRON SYSTEMS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $541.9 million.

What is the period of performance?

Start: 2011-01-21. End: 2016-08-31.

What is the specific justification for awarding this contract on a sole-source basis?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For defense contracts, this often relates to unique capabilities, proprietary technology, or urgent national security needs where competition is not feasible or would cause unacceptable delays. In this case, the specific nature of supporting MASVS for the Afghan National Army, potentially involving unique refurbishment processes or integration with existing systems, might have led the Department of Defense to identify Textron Systems Corp as the only viable provider. A detailed justification document, often classified or sensitive, would normally accompany such a determination.

How does the firm fixed-price (FFP) structure mitigate risk for the government in this sole-source context?

A Firm Fixed Price (FFP) contract shifts the majority of cost risk to the contractor. This means Textron Systems Corp is obligated to complete the work for the agreed-upon price, regardless of their actual costs. In a sole-source situation, while the initial price negotiation lacks competitive pressure, the FFP structure still provides cost certainty for the government. It prevents cost overruns from impacting the government's budget, unlike cost-reimbursement contracts. However, the government must still ensure the initial negotiated price is fair and reasonable, which is more challenging without competitive benchmarking.

What are the potential risks associated with a long-term, sole-source contract for military vehicle support?

Long-term, sole-source contracts carry several risks. Firstly, the lack of competition can lead to complacency and reduced innovation from the contractor, as there's no market pressure to improve efficiency or technology. Secondly, the government may overpay over the contract's life compared to what a competitive environment might yield. Thirdly, dependence on a single contractor creates a vulnerability; if Textron Systems faces financial difficulties, production issues, or geopolitical sanctions, the support for the Afghan National Army's vehicles could be severely disrupted. Finally, the contract's terms may become outdated relative to evolving military needs or technological advancements without regular renegotiation or competition.

Can Textron Systems Corp's track record provide insights into the likely performance of this contract?

Textron Systems Corp is a well-established defense contractor with a history of producing and supporting various military platforms. Their experience with armored vehicles, including the MASVS, suggests they possess the technical expertise and manufacturing capabilities required for this contract. Past performance on similar government contracts, if available and reviewed, would offer further insight. However, the specific context of supporting a foreign military partner in a complex operational environment like Afghanistan introduces unique challenges beyond standard production or domestic support contracts. Assessing their past performance in similar foreign military aid contexts would be crucial.

How does this contract's value compare to other similar foreign military support or vehicle sustainment contracts?

The $541.9 million value over approximately five years places this contract as a significant investment in foreign military sustainment. Direct comparisons are difficult without knowing the exact scope, number of vehicles, and specific services included. However, large-scale sustainment contracts for major military platforms (like tanks, aircraft, or ships) often run into hundreds of millions or even billions of dollars over their lifecycles. This contract appears substantial, reflecting the complexity and duration of supporting a fleet of specialized vehicles in a demanding operational theater. Benchmarking would require access to data on similar sole-source or competed contracts for MRAP-class vehicles or equivalent.

What are the implications of this contract being awarded in 2011 for current and future support needs?

Awarded in 2011 and ending in August 2016, this contract reflects support needs during a specific period of U.S. involvement in Afghanistan. The technology and operational requirements for military vehicles may have evolved since then. If the Afghan National Army still requires support for these specific MASVS, subsequent contracts would need to account for any technological obsolescence or updated requirements. The historical spending pattern shows a significant commitment during that timeframe, but it doesn't necessarily dictate current or future needs or the best approach to meet them, which might involve different platforms or support strategies.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

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: 19401 CHEF MENTEUR HWY, NEW ORLEANS, LA, 70129

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $544,336,890

Exercised Options: $541,934,732

Current Obligation: $541,934,732

Subaward Activity

Number of Subawards: 347

Total Subaward Amount: $89,159,255

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline