DoD awards $243M engineering services contract to Textron Systems Corporation over 10 years

Contract Overview

Contract Amount: $243,171,398 ($243.2M)

Contractor: Textron Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2007-11-26

End Date: 2017-08-31

Contract Duration: 3,566 days

Daily Burn Rate: $68.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: A NEW ENGINEERING SERVICES CONTRACT FOR FY 08 - FY 10.

Place of Performance

Location: COCKEYSVILLE, BALTIMORE County, MARYLAND, 21030

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $243.2 million to TEXTRON SYSTEMS CORPORATION for work described as: A NEW ENGINEERING SERVICES CONTRACT FOR FY 08 - FY 10. Key points: 1. Contract awarded for engineering services over a decade-long period. 2. Significant duration suggests a long-term need for specialized engineering support. 3. Sole-source award raises questions about potential cost efficiencies and market alternatives. 4. Contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. The contract's value places it among substantial federal engineering procurements. 6. Performance period spans multiple fiscal years, indicating sustained program requirements.

Value Assessment

Rating: questionable

The contract's total value of approximately $243 million over 10 years averages to about $24.3 million annually. Without comparable contracts for similar engineering services from the Department of Defense or other agencies, it is difficult to benchmark the value for money. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation if the fixed fee is not adequately justified or if the cost estimates are inaccurate. Further analysis of the fixed fee percentage and the base costs would be necessary to assess true value.

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 approach is typically used when only one vendor possesses the necessary capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process, potentially leading to higher costs than if multiple offers had been considered.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The government missed an opportunity to explore innovative solutions or cost-saving approaches that might have been offered by other qualified contractors.

Public Impact

The Department of Defense benefits from specialized engineering services crucial for its operations. The contract supports the development, modification, or maintenance of defense systems and technologies. The geographic impact is likely concentrated around Textron Systems Corporation's facilities and relevant DoD installations. Workforce implications include employment opportunities for engineers and technical staff at Textron Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Cost Plus Fixed Fee structure carries risk of cost overruns.
Long duration (10 years) may not adapt well to rapidly changing technological needs.
Lack of transparency in the justification for sole-source award.

Positive Signals

Award to an established contractor (Textron Systems Corporation) suggests potential for reliable performance.
Long-term contract provides stability for critical engineering support.
Definitive contract type implies a clear scope of work, though details are not provided.

Sector Analysis

The engineering services sector is a critical component of the defense industrial base, providing essential expertise for the design, development, and sustainment of complex military systems. Federal spending in this area is substantial, driven by the need for advanced technological capabilities. This contract, valued at over $243 million, represents a significant investment within this sector. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the DoD or other federal agencies for similar types of services, considering factors like contract type, duration, and specific technical requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large corporation, it is unlikely to involve significant subcontracting opportunities for small businesses unless explicitly mandated by the prime contractor or the agency. This contract does not appear to directly support the small business ecosystem through set-asides.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management and administration functions, likely through the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures would be tied to the terms and conditions of the Cost Plus Fixed Fee contract, including performance metrics, cost reporting, and fee determination. Transparency is limited due to the sole-source nature of the award and the lack of publicly available detailed justifications or performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Engineering Services
Textron Systems Corporation Contracts
Department of Defense Major Contracts
Cost Plus Fixed Fee Contracts
Sole Source Defense Procurements

Risk Flags

Sole Source Award
Cost Plus Fixed Fee Contract Type
Long Contract Duration
Lack of Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $243.2 million to TEXTRON SYSTEMS CORPORATION. A NEW ENGINEERING SERVICES CONTRACT FOR FY 08 - FY 10.

Who is the contractor on this award?

The obligated recipient is TEXTRON SYSTEMS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $243.2 million.

What is the period of performance?

Start: 2007-11-26. End: 2017-08-31.

What specific engineering services does Textron Systems Corporation provide under this contract, and how do these align with current DoD priorities?

The provided data indicates the contract is for 'Engineering Services' (nd: 'Engineering Services') with the North American Industry Classification System (NAICS) code 541330, which specifically covers Engineering Services. However, the exact nature of these services is not detailed. Given the awardee is Textron Systems Corporation, a known defense contractor, and the awarding agency is the Department of Defense, it is highly probable that these services relate to the design, development, integration, testing, or sustainment of military platforms, weapon systems, or related technologies. These could encompass areas such as aerospace engineering, mechanical engineering, electrical engineering, systems engineering, or specialized research and development support. Alignment with current DoD priorities would depend on the specific projects undertaken, which are not disclosed in the provided data. These could range from modernizing existing platforms to developing next-generation capabilities in response to evolving geopolitical threats.

How was the fixed fee determined for this Cost Plus Fixed Fee (CPFF) contract, and what is the rationale for its adequacy?

The provided data specifies the contract type as 'COST PLUS FIXED FEE' (pt: 'COST PLUS FIXED FEE') but does not include details on how the fixed fee was determined or its specific percentage. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. The determination of this fixed fee is a critical negotiation point. Agencies typically establish the fee based on factors such as the complexity of the work, the level of risk assumed by the contractor, the contractor's experience, and market rates for similar services. A 'fair and reasonable' fixed fee is sought. Without access to the contract's negotiation documentation, including cost proposals, fee calculations, and the agency's justification for accepting the proposed fee, it is impossible to assess its adequacy. The long duration and sole-source nature of this contract further complicate this assessment, as competitive benchmarks for fee negotiation are absent.

What is the historical spending pattern for engineering services by the Department of Defense, and how does this contract compare?

The Department of Defense is consistently one of the largest federal agencies for procuring engineering services, driven by the complexity and scale of its weapon systems and infrastructure. Historical spending data would reveal significant annual outlays across various categories of engineering support, including research and development, systems integration, lifecycle support, and specialized technical services. This specific contract, valued at approximately $243 million over 10 years (averaging $24.3 million annually), represents a substantial, long-term commitment. To compare it effectively, one would need to analyze the average annual spending on similar engineering services contracts by the DoD, considering factors like contract type (e.g., CPFF, FFP), duration, and the specific technical domains involved. Given its sole-source nature and long duration, this contract might be for a highly specialized or critical capability where few alternatives exist, or it could represent a less competitive procurement compared to potentially more numerous, shorter-term, competed contracts within the broader engineering services portfolio.

What are the potential risks associated with a sole-source, Cost Plus Fixed Fee contract of this magnitude and duration?

A sole-source, Cost Plus Fixed Fee (CPFF) contract of this magnitude ($243 million over 10 years) presents several significant risks. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated costs and reduced innovation as the contractor faces less incentive to optimize performance or find efficiencies. Secondly, the CPFF structure reimburses the contractor for actual costs incurred plus a predetermined fixed fee. This can incentivize cost overruns, as the contractor is guaranteed their fee regardless of cost efficiency, provided costs are allowable. The agency bears the risk of cost increases. The long duration (10 years) increases the risk that the scope of work may become outdated, requirements may change significantly, or the fixed fee may become disproportionately high or low relative to the effort by the end of the contract term. Effective oversight and robust cost controls are paramount to mitigate these risks.

What is Textron Systems Corporation's track record with the Department of Defense, particularly concerning large engineering service contracts?

Textron Systems Corporation is a well-established defense contractor with a significant history of working with the Department of Defense across various programs and service areas. While the provided data focuses on this single contract, Textron Systems' broader portfolio includes advanced systems, unmanned systems, precision weapons, and marine craft, often requiring substantial engineering support. Their track record with the DoD would typically involve numerous contracts, ranging in value and complexity. Assessing their performance on large engineering service contracts would require reviewing past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues related to cost, schedule, or quality. Given their established presence, it is likely they have experience managing large, complex engineering efforts, but specific performance metrics for this type of contract would need independent verification beyond the scope of the provided data.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ07R0564

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc

Address: 124 INDUSTRY LN, HUNT VALLEY, MD, 21030

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $243,427,230

Exercised Options: $243,427,230

Current Obligation: $243,171,398

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline