Department of the Army awards $375M contract for C-12 replacement aircraft to Beechcraft Corporation

Contract Overview

Contract Amount: $37,493,000 ($37.5M)

Contractor: Beechcraft Corporation

Awarding Agency: Department of Defense

Start Date: 2010-02-25

End Date: 2011-07-29

Contract Duration: 519 days

Daily Burn Rate: $72.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-12 REPLACEMENT AIRCRAFT

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67206

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $37.5 million to BEECHCRAFT CORPORATION for work described as: C-12 REPLACEMENT AIRCRAFT Key points: 1. Contract awarded on a firm fixed-price basis, indicating clear cost expectations. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation. 3. The contract duration of 519 days suggests a focused, short-term requirement. 4. The absence of small business set-asides may limit opportunities for smaller firms. 5. This procurement falls under the Aircraft Manufacturing sector, a critical component of defense logistics. 6. The contract's value is substantial, reflecting the importance of reliable aircraft for military operations.

Value Assessment

Rating: fair

The contract value of $374.93 million for 1 C-12 replacement aircraft is difficult to benchmark without more specific aircraft model details and configuration. However, given the firm fixed-price nature, the Army has established a clear ceiling. The base award amount of $72.24 million for the initial delivery order suggests a significant per-unit cost, which should be compared against similar military or commercial aircraft acquisitions of comparable capability and age.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Beechcraft Corporation was the only vendor considered. This approach bypasses the competitive bidding process, which typically drives down prices and fosters innovation. Without competition, there is a reduced incentive for the contractor to offer the most cost-effective solution.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price, as the usual market pressures of competition are absent.

Public Impact

The primary beneficiaries are the Department of the Army, which receives updated aircraft for its operations. The contract delivers essential aircraft manufacturing services, ensuring the readiness of military transport and support capabilities. The geographic impact is primarily centered in Kansas, where Beechcraft Corporation is located, potentially supporting local jobs and the regional economy. Workforce implications include employment opportunities within Beechcraft Corporation and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
No small business participation noted, potentially excluding smaller, specialized firms.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Procurement addresses a specific need for aircraft replacement, ensuring operational continuity.
Award to an established manufacturer like Beechcraft suggests a focus on reliability and proven performance.

Sector Analysis

The Aircraft Manufacturing sector is a vital part of the aerospace and defense industry. This contract for C-12 replacement aircraft fits within the broader category of military aircraft production. Spending in this sector is often characterized by high R&D costs, long production cycles, and significant government oversight due to national security implications. Comparable spending benchmarks would involve looking at other military aircraft acquisition programs, though direct comparisons are challenging due to unique specifications and mission requirements.

Small Business Impact

This contract does not appear to include any small business set-asides, nor is there an indication of subcontracting requirements specifically targeting small businesses. This means that opportunities for small businesses to participate in this significant defense contract are likely limited. The absence of such provisions could impact the broader small business ecosystem within the defense industrial base, as larger prime contractors may not be incentivized to engage them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to internal review and potentially audits by the Defense Contract Audit Agency (DCAA). Transparency is limited due to the non-competitive nature, but accountability rests on the Army's ability to demonstrate the necessity and fair pricing of the award.

Related Government Programs

Military Aircraft Procurement
Defense Logistics Support Aircraft
Fixed-Wing Aircraft Manufacturing
US Army Aviation Programs

Risk Flags

Sole-source award lacks competitive justification.
High per-unit cost requires further validation.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.5 million to BEECHCRAFT CORPORATION. C-12 REPLACEMENT AIRCRAFT

Who is the contractor on this award?

The obligated recipient is BEECHCRAFT 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 $37.5 million.

What is the period of performance?

Start: 2010-02-25. End: 2011-07-29.

What specific C-12 aircraft model is being replaced, and what are its key performance characteristics?

The provided data does not specify the exact C-12 aircraft model being replaced. The C-12 is a general aviation workhorse used by the U.S. military for various roles, including transport, utility, and special missions. Models include the C-12A, C-12B, C-12C, C-12D, C-12E, C-12F, C-12R, and C-12T, often based on Beechcraft King Air or Super King Air airframes. Key performance characteristics vary by model but generally include range, payload capacity, speed, and endurance. Understanding the specific model and its mission requirements is crucial for evaluating the necessity and value of its replacement. Without this detail, a precise assessment of the $374.93 million award is challenging.

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

The data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. Government contracts are typically competed to ensure fair pricing and maximize value for taxpayers. Sole-source awards are exceptions, usually justified by factors such as urgent and compelling needs, unique capabilities of a single source, or when only one responsible source can fulfill the requirement. The specific justification for this C-12 replacement aircraft contract would typically be documented in a Justification and Approval (J&A) document, which would detail why competitive procedures were not feasible or not in the government's best interest. Without access to this J&A, the rationale remains unclear.

How does the $72.24 million initial delivery order value compare to market rates for similar aircraft?

The initial delivery order value of $72.24 million for one C-12 replacement aircraft is a significant figure. To benchmark this against market rates, one would need to compare it with the acquisition costs of comparable new or remanufactured turboprop aircraft used for military or demanding civilian operations. Factors such as avionics suites, interior configurations, engine upgrades, and specific performance modifications heavily influence price. Without knowing the exact specifications of the replacement aircraft and comparing it to publicly available pricing for similar platforms from manufacturers like Textron Aviation (Beechcraft's parent company) or competitors like Pilatus or Daher, a definitive market comparison is difficult. However, this figure suggests a high-end, potentially specialized configuration.

What is Beechcraft Corporation's track record with Department of Defense aircraft contracts?

Beechcraft Corporation, now part of Textron Aviation, has a long and established history of supplying aircraft to the U.S. military, including the Department of Defense. The C-12 itself is a platform that Beechcraft has produced and supported for decades, indicating a deep familiarity with the platform and the military's requirements. Their track record includes numerous contracts for various aircraft types, often for transport, training, and special mission roles. While specific performance metrics for all past contracts are not detailed here, their continued role as a supplier suggests a generally positive relationship and capability in meeting DoD needs, though individual contract performance can vary.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk associated with a sole-source award of this magnitude ($374.93 million) is the potential for inflated pricing due to the lack of competition. Without competing bids, the government loses the leverage to negotiate the best possible price. There's also a risk that the chosen contractor may not be the most innovative or efficient provider available. Furthermore, sole-source awards can sometimes indicate a lack of strategic planning or market analysis, potentially leading to suboptimal long-term solutions. Ensuring robust oversight and negotiation by the contracting agency is critical to mitigate these risks.

How does this contract align with broader trends in military aircraft modernization?

This contract aligns with the ongoing trend of military branches modernizing their fleets to maintain operational readiness and incorporate technological advancements. The C-12, while versatile, represents an older generation of aircraft. Replacing them with newer models, even if based on proven platforms like Beechcraft's, allows for improved fuel efficiency, enhanced avionics, better communication systems, and potentially greater reliability. This procurement reflects the DoD's continuous effort to update its support and transport aircraft to meet evolving mission demands and reduce long-term sustainment costs associated with aging platforms.

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

Solicitation ID: W58RGZ09R0429

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hawker Beechcraft, Inc. (UEI: 800097615)

Address: 9709 E CENTRAL AVE, WICHITA, KS, 04

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

Financial Breakdown

Contract Ceiling: $37,493,000

Exercised Options: $37,493,000

Current Obligation: $37,493,000

Contract Characteristics

Cost or Pricing Data: NO

Timeline