Army awards $41.9M for Black Hawk helicopter parts, with limited competition impacting price discovery

Contract Overview

Contract Amount: $41,865,714 ($41.9M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2000-12-28

End Date: 2005-10-31

Contract Duration: 1,768 days

Daily Burn Rate: $23.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200103!000626!2100!AE07 !TACOM - WARREN !DAAE0701CM003 !A!N!*!N! !20001228!20021030!006265466!006265466!122604846!N!SYSTEMS & ELECTRONICS INC !201 EVANS LANE !SAINT LOUIS !MO!63121!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000013092412!N!N!000000000000!AC44!RDTE/TANK - AUTOMOTIVE-DEMO/VALID !A1A!AIRFRAMES AND SPARES !1AIA!BLACKHAWK (UH-60) UTTAS !332912!*!*!3! ! ! !*!*!*!B!*!*!A! !D !U!J!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63121, UNITED STATES OF AMERICA

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $41.9 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: 200103!000626!2100!AE07 !TACOM - WARREN !DAAE0701CM003 !A!N!*!N! !20001228!20021030!006265466!006265466!122604846!N!SYSTEMS & ELECTRONICS INC !201 EVANS LANE !SAINT LOUIS !MO!63121!65000!510!29!ST. LOUIS !ST. L… Key points: 1. Contract awarded for critical helicopter components, highlighting the importance of aviation readiness. 2. Limited competition suggests potential for higher costs compared to a fully open market. 3. The contract's duration and value indicate a significant investment in maintaining the Black Hawk fleet. 4. Performance risk appears moderate given the specialized nature of the components. 5. This contract positions the awardee as a key supplier within the Army's aviation maintenance sector. 6. The fixed-price structure aims to transfer some cost risk to the contractor.

Value Assessment

Rating: fair

The awarded amount of $41.9 million for Black Hawk helicopter parts appears substantial, but a direct value-for-money assessment is challenging without detailed cost breakdowns and comparisons to similar sole-source or limited-competition procurements. The contract was not competed, which inherently limits the ability to benchmark pricing against market alternatives. While the price is fixed, the lack of competition raises questions about whether the government secured the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to full and open competition. This approach is typically used when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of multiple bidders means there was no competitive pressure to drive down prices, potentially leading to a higher cost for the government.

Taxpayer Impact: The sole-source nature of this award means taxpayers did not benefit from the price reductions typically achieved through competitive bidding processes.

Public Impact

The primary beneficiaries are the U.S. Army aviation units relying on the UH-60 Black Hawk helicopter for critical missions. The contract delivers essential components for the maintenance and operational readiness of the Black Hawk fleet. The geographic impact is national, supporting Army operations across various installations. Workforce implications include supporting specialized manufacturing and logistics jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can create dependency on a single supplier.
Potential for cost overruns if initial pricing assumptions were inaccurate.

Positive Signals

Ensures availability of critical components for a vital military asset.
Fixed-price contract provides cost certainty once awarded.
Awardee likely possesses specialized knowledge for these components.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the sustainment and maintenance of rotary-wing aircraft. The market for specialized helicopter components is often characterized by high barriers to entry due to technical expertise, stringent quality control, and established relationships with the military. Comparable spending benchmarks would involve other contracts for Black Hawk or similar military helicopter parts, which are often awarded through limited or sole-source channels due to the unique specifications and safety requirements.

Small Business Impact

This contract was not set aside for small businesses, nor is there information indicating significant subcontracting opportunities for small businesses. The nature of specialized aerospace components often favors larger, established manufacturers with the necessary certifications and production capabilities. This could limit the direct impact on the small business ecosystem within this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is generally maintained through contract award databases, though detailed cost justifications for sole-source awards may be less publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Black Hawk Helicopter Sustainment
Rotary Wing Aircraft Component Procurement
Department of the Army Aviation Maintenance
Defense Logistics Agency Aviation Support

Risk Flags

Sole-source award limits price competition.
Potential for higher costs due to lack of competitive bidding.
Dependency on a single supplier for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.9 million to DRS SUSTAINMENT SYSTEMS, INC. 200103!000626!2100!AE07 !TACOM - WARREN !DAAE0701CM003 !A!N!*!N! !20001228!20021030!006265466!006265466!122604846!N!SYSTEMS & ELECTRONICS INC !201 EVANS LANE !SAINT LOUIS !MO!63121!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000013092412!N!N!000000000000!AC44!RDTE/TANK - AUTOMOTIVE-DEMO/VALID !A1A!AIRFRAMES AND SPARES !1AIA!BLACKHAWK (UH-60) UTTAS !332912!*!*!3! ! ! !*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is DRS SUSTAINMENT SYSTEMS, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $41.9 million.

What is the period of performance?

Start: 2000-12-28. End: 2005-10-31.

What is the track record of Systems & Electronics Inc. in supplying components for the Black Hawk helicopter program?

Systems & Electronics Inc. (SEI) has a history of supplying various components and systems for defense applications. While specific details on their track record solely for Black Hawk UH-60 helicopter parts require deeper investigation into historical contract awards and performance reviews, their involvement in this contract suggests they possess the necessary technical capabilities and certifications. SEI's broader experience in aerospace and defense manufacturing likely underpins their ability to meet the stringent requirements for critical helicopter components. Further analysis would involve examining past performance metrics, any reported issues, and their overall contribution to the Black Hawk supply chain over time.

How does the awarded price compare to similar sole-source procurements for Black Hawk components?

Direct comparison of the $41.9 million award to similar sole-source procurements for Black Hawk components is challenging without access to proprietary cost data and detailed specifications of the parts procured. Sole-source awards inherently lack the price discovery mechanism of competition. However, benchmarks can be estimated by examining the average price per unit (if identifiable) or by comparing the total contract value against the duration and scope of work for other limited-competition contracts for similar high-value, specialized aerospace parts. The 'br' field indicates a benchmark of 23680, which might represent a per-unit cost or a related metric, but its precise meaning and comparability are unclear without further context.

What are the primary risks associated with this sole-source contract for the Department of the Army?

The primary risks associated with this sole-source contract for the Department of the Army revolve around cost and supplier dependency. Without competition, there's a heightened risk that the awarded price may not be the most economical, potentially leading to cost overruns or inefficient use of taxpayer funds. Furthermore, relying on a single supplier for critical components can create vulnerabilities in the supply chain. Any disruption in the supplier's operations, such as production issues, financial instability, or geopolitical factors, could directly impact the Army's ability to maintain its Black Hawk fleet, potentially affecting operational readiness.

How does the awarded value of $41.9 million fit within the historical spending for Black Hawk helicopter parts?

The awarded value of $41.9 million for Black Hawk helicopter parts represents a significant, but not necessarily outlier, investment. Historical spending on the Black Hawk program, which has been in service for decades, encompasses a vast array of components, upgrades, and sustainment efforts. This particular contract's value should be viewed in the context of the specific components being procured and the contract's duration (2000-12-28 to 2005-10-31, approximately 5 years). Annual spending on helicopter parts can fluctuate significantly based on fleet readiness needs, modernization programs, and the availability of competitive bids. Without a breakdown of the specific parts and quantities, it's difficult to definitively categorize this award relative to the entire historical spending profile, but it signifies a substantial commitment to maintaining a key asset.

What is the significance of the Product Service Code (PSC) '332912' in relation to this contract?

The Product Service Code (PSC) '332912' signifies 'Fluid Power Valve and Hose Fitting Manufacturing'. This code indicates that the contract is for the production or supply of components related to fluid power systems, which are crucial for the operation of many mechanical systems, including aircraft. For the Black Hawk helicopter, fluid power systems are essential for flight controls, landing gear actuation, and other critical functions. Therefore, this PSC highlights that the contract is for highly specialized and vital components that ensure the safe and effective operation of the aircraft, underscoring the technical requirements and potential complexity involved in manufacturing these parts.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Fluid Power Valve and Hose Fitting Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 201 EVANS LANE, SAINT LOUIS, MO, 63121

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Contract Characteristics

Cost or Pricing Data: YES

Timeline