Navy awards $111M for helicopter parts, citing sole-source justification for critical components

Contract Overview

Contract Amount: $48,855,469 ($48.9M)

Contractor: Maritime Helicopter Support Company LLC

Awarding Agency: Department of Defense

Start Date: 2004-10-18

End Date: 2006-09-30

Contract Duration: 712 days

Daily Burn Rate: $68.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: 200512!046386!1700!N00383!NAVAL INVENTORY CONTROL POINT !N0038304D028N !A!N! !N!0002 ! !20041018!20050930!111018748!111018748!111018748!N!MARITIME HELICOPTER SUPPORT CO!2510 HUNTER PLACE !WOODBRIDGE !VA!22192!74592!059!51!SPRINGFIELD !FAIRFAX !VIRGINIA !+000039502056!N!N!000000000000!1615!HELICOPTER ROTOR BLADES, DRIVE MECHANISMS & COMPON!A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!A!S! ! ! !20200930!B! ! !B! !D!U!L!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! !1700!N00383!0001! !

Place of Performance

Location: MANASSAS, MANASSAS CITY County, VIRGINIA, 20110

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $48.9 million to MARITIME HELICOPTER SUPPORT COMPANY LLC for work described as: 200512!046386!1700!N00383!NAVAL INVENTORY CONTROL POINT !N0038304D028N !A!N! !N!0002 ! !20041018!20050930!111018748!111018748!111018748!N!MARITIME HELICOPTER SUPPORT CO!2510 HUNTER PLACE !WOODBRIDGE !VA!22192!74592!059!51!SPRINGFIELD !FAIR… Key points: 1. Contract value of $111,018,748 awarded for helicopter rotor blades and drive mechanisms. 2. Sole-source justification raises concerns about potential lack of competitive pricing. 3. Contract duration of approximately two years suggests a need for ongoing support. 4. Focus on critical aircraft components highlights potential supply chain vulnerabilities. 5. Limited competition may impact the government's ability to secure the best value. 6. The award falls under the 'Aircraft Manufacturing' sector, indicating specialized industry involvement.

Value Assessment

Rating: questionable

The total contract value of $111,018,748 for helicopter parts appears substantial. Without comparable sole-source awards or detailed cost breakdowns, it is difficult to benchmark the value for money. The lack of competition inherently limits the government's ability to negotiate the most favorable pricing, potentially leading to higher costs than if the contract had been competed. The pricing structure, likely a fixed-price incentive, suggests an attempt to manage costs but the absence of competitive pressure is a primary concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not conduct a competitive bidding process. The justification for this approach is not detailed in the provided data, but sole-source awards are typically made when only one responsible source can provide the required supplies or services. This lack of competition means that the government did not benefit from multiple vendors vying for the contract, which can limit price discovery and potentially lead to higher costs.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to leverage competition to drive down prices. This increases the risk that the government may be paying more than necessary for these critical helicopter components.

Public Impact

The primary beneficiaries are likely the military units operating helicopters that require these specific parts for maintenance and operational readiness. The services delivered include the provision of essential helicopter rotor blades and drive mechanisms, crucial for aircraft functionality. The geographic impact is primarily within the Department of Defense's operational theaters where these helicopters are deployed. Workforce implications may include supporting specialized manufacturing jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification makes it difficult to assess necessity.
Reliance on a single source for critical components could pose supply chain risks.
Contract duration and value warrant scrutiny to ensure continued best value.

Positive Signals

Award ensures availability of critical helicopter components for naval aviation.
Fixed-price incentive contract type aims to align contractor and government cost objectives.
Contract supports specialized manufacturing within the defense industrial base.

Sector Analysis

The contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft components. This sector is characterized by high technological requirements, stringent quality standards, and often involves specialized suppliers. The market for critical helicopter parts can be concentrated, sometimes leading to situations where sole-source or limited competition awards are deemed necessary due to proprietary technology or unique manufacturing capabilities. Benchmarking this contract's value is challenging without specific data on similar sole-source procurements for these specialized parts.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award. However, the prime contractor, Maritime Helicopter Support Company LLC, may engage small businesses as subcontractors, but this information is not detailed here. The absence of a small business set-aside suggests the requirement was either not suitable or not pursued for small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the contract terms, particularly with a Fixed Price Incentive (FPI) structure, which links contractor profit to performance against cost targets. Transparency is limited due to the sole-source nature of the award; however, contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Aviation Maintenance Programs
Department of Defense Aircraft Component Procurement
Helicopter Fleet Support Contracts
Defense Logistics Agency (DLA) Aviation

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price inflation
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.9 million to MARITIME HELICOPTER SUPPORT COMPANY LLC. 200512!046386!1700!N00383!NAVAL INVENTORY CONTROL POINT !N0038304D028N !A!N! !N!0002 ! !20041018!20050930!111018748!111018748!111018748!N!MARITIME HELICOPTER SUPPORT CO!2510 HUNTER PLACE !WOODBRIDGE !VA!22192!74592!059!51!SPRINGFIELD !FAIRFAX !VIRGINIA !+000039502056!N!N!000000000000!1615!HELICOPTER ROTOR BLADES, DRIVE MECHANISMS & COMPON!A1A!AIRFRAMES AND SPARES !000 !* !336411!E! !5!A!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is MARITIME HELICOPTER SUPPORT COMPANY LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $48.9 million.

What is the period of performance?

Start: 2004-10-18. End: 2006-09-30.

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

The provided data indicates the contract was awarded as 'NOT COMPETED' (ct: NOT COMPETED), signifying a sole-source or limited competition procurement. While the specific justification is not detailed in the abbreviated data, sole-source awards are typically justified under circumstances such as the unique capability of a single contractor, urgent and compelling needs where competition is not feasible, or when only one source is capable of meeting the requirement. For critical aircraft components like rotor blades and drive mechanisms, the justification might stem from proprietary designs, specialized manufacturing processes, or existing support infrastructure that only one company possesses. A full justification would typically be documented by the agency and may be subject to review.

How does the pricing of this contract compare to similar helicopter component procurements, especially those competed?

Direct comparison of pricing is challenging due to the sole-source nature of this award and the limited data provided. Competed contracts for similar helicopter components would likely yield a wider range of pricing, allowing for better benchmarking against market rates and demonstrating the impact of competition on price. Sole-source awards, by definition, lack this competitive pressure. The 'FIXED PRICE INCENTIVE' (pt: FIXED PRICE INCENTIVE) structure suggests that while there are target costs and potential incentives for the contractor to meet or exceed them, the absence of competing bids means the initial target price might be higher than it would be in a competitive scenario. Without access to the detailed cost breakdown or comparable competed contract data, a precise value-for-money assessment is difficult.

What are the potential risks associated with relying on a sole-source provider for critical helicopter parts?

Relying on a sole-source provider for critical helicopter parts presents several risks. Firstly, there is a heightened risk of price escalation over time, as the contractor faces no competitive pressure to reduce costs. Secondly, supply chain disruptions can be more impactful; if the sole-source provider experiences production issues, the government may have limited alternative options, potentially impacting aircraft availability. Thirdly, there's a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility in sourcing or technology upgrades. Finally, the lack of competition can sometimes lead to complacency in quality or service, although contract performance clauses aim to mitigate this.

What is the historical spending pattern for this specific type of helicopter component by the Department of the Navy?

The provided data snippet focuses on a single contract award (NAICS 336411, Aircraft Manufacturing) for helicopter components. To understand historical spending patterns, one would need to analyze procurement data over several fiscal years for similar National Stock Numbers (NSN) or Product Service Codes (PSC) related to helicopter rotor blades and drive mechanisms. This would involve querying databases like FPDS or SAM.gov for all contracts awarded by the Department of the Navy (or DoD broadly) for these items, noting the award types (competed vs. sole-source), contract values, and durations. Without this broader dataset, it's impossible to establish a historical spending trend for this specific component category.

How does the contract duration (712 days) align with the typical lifecycle support needs for these helicopter components?

The contract duration of 712 days (approximately 23.4 months, from 2004-10-18 to 2005-09-30) covers a period of roughly two years. For critical helicopter components like rotor blades and drive mechanisms, which are subject to wear and tear and require regular replacement or overhaul, a two-year support period is a reasonable timeframe for ensuring operational readiness. This duration likely reflects the anticipated demand and lead times for manufacturing or supplying these specialized parts. It allows for consistent support without committing to an excessively long period, which could be problematic if requirements change or if a more competitive sourcing opportunity arises later.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 2655 INTERPLEX DRIVE SUITE 103, TREVOSE, PA, 19053

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership

Financial Breakdown

Contract Ceiling: $428,822

Exercised Options: $428,822

Current Obligation: $48,855,469

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038304D028N

IDV Type: IDC

Timeline