DoD's $13M contract with Sterling Software for Apache helicopter electronics management support awarded without competition

Contract Overview

Contract Amount: $13,015,066 ($13.0M)

Contractor: Sterling Software (U.S.), Inc.

Awarding Agency: Department of Defense

Start Date: 2000-03-23

End Date: 2005-09-30

Contract Duration: 2,017 days

Daily Burn Rate: $6.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200010!2100!005118!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0100CA105 !A!*!* !20000323!20000930!041158320!041158320!008255408!N!0G5P5!STERLING SOFTWARE (U.S.), INC.!1650 TYSONS BOULEVARD, SUI!MCLEAN !VA!22102!53000!095!12!ORLANDO !ORANGE !FLORIDA !0001!+000000366000!N!N!000000000000!AC66!RDTE/ELECTRONICS & COMMUNICATION EQ-MGMT SUPPORT !A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !3562!3!*!*!*!B!B!*!D !N!U!1!001!N!1G!A!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $13.0 million to STERLING SOFTWARE (U.S.), INC. for work described as: 200010!2100!005118!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0100CA105 !A!*!* !20000323!20000930!041158320!041158320!008255408!N!0G5P5!STERLING SOFTWARE (U.S.), INC.!1650 TYSONS BOULEVARD, SUI!MCLEAN !VA!22102!53000!095!12!ORLANDO !ORA… Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings through competition. 2. Significant portion of contract value allocated to research, development, testing, and evaluation (RDT&E). 3. Contract duration of over 2000 days suggests a long-term need for these specialized support services. 4. Sterling Software, Inc. is the sole awardee, indicating a potential lack of market alternatives or a strategic choice. 5. The contract falls under the 'Electronics & Communication Equipment-Management Support' category, highlighting its technical nature.

Value Assessment

Rating: questionable

The contract's value of $13,015,066 for electronics management support for Apache helicopters warrants scrutiny. Without competitive bidding, it's difficult to benchmark the pricing against market rates or similar contracts. The cost-plus-fixed-fee structure, while common for RDT&E, can sometimes lead to higher costs if not managed tightly. Further analysis would be needed to determine if this price represents good value for the services rendered, especially given the sole-source nature of the award.

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. This suggests that the Department of Defense identified Sterling Software (U.S.), Inc. as the only capable source for the required services. The lack of competition means there was no opportunity for price discovery through a bidding process, which could potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, the government had less leverage to negotiate the lowest possible price for these essential support services.

Public Impact

The primary beneficiaries are the U.S. Army aviation units operating the Apache (AH-64) attack helicopters. The contract delivers crucial management support for electronics and communication equipment integral to the Apache's operational effectiveness. Services are likely concentrated within the operational theater or support bases where Apache helicopters are deployed. The contract supports specialized technical roles, potentially impacting a workforce skilled in electronics and aviation systems management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely monitored.
Long contract duration may indicate a lack of readily available alternative solutions.
Specific details on performance metrics and contractor accountability are not readily available in the provided data.

Positive Signals

Contract addresses a critical need for specialized electronics management for a key military asset (Apache helicopter).
Sterling Software (U.S.), Inc. is identified as the awardee, suggesting established capability in this niche.
The contract is for RDT&E, indicating investment in improving or maintaining advanced technological capabilities.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on the sustainment and enhancement of aviation platforms. The market for specialized aerospace electronics management and support is often characterized by high barriers to entry due to technical expertise, security clearances, and established relationships with defense agencies. Spending in this area is critical for maintaining the operational readiness of advanced military hardware like the Apache helicopter. Comparable spending benchmarks would typically involve other contracts for similar platform support, RDT&E services, or specialized electronics maintenance within the DoD.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. Sterling Software (U.S.), Inc. is a large business. Therefore, this contract does not appear to directly benefit the small business ecosystem through set-asides. Further investigation into subcontracting requirements would be needed to assess any indirect impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contract management and acquisition oversight bodies, such as the Defense Contract Management Agency (DCMA). The cost-plus-fixed-fee structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency is often limited for sole-source defense contracts, but reporting requirements under the Federal Acquisition Regulation (FAR) would apply. Inspector General investigations could be initiated if performance or cost issues arise.

Related Government Programs

Apache Helicopter Program
Aviation Electronics Systems
Missile and Fire Control Systems
Defense RDT&E Spending
Aerospace Electronics Manufacturing
Military Aircraft Sustainment

Risk Flags

Sole-source award
Potential for cost overruns (CPFF)
Lack of competitive benchmarking
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.0 million to STERLING SOFTWARE (U.S.), INC.. 200010!2100!005118!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0100CA105 !A!*!* !20000323!20000930!041158320!041158320!008255408!N!0G5P5!STERLING SOFTWARE (U.S.), INC.!1650 TYSONS BOULEVARD, SUI!MCLEAN !VA!22102!53000!095!12!ORLANDO !ORANGE !FLORIDA !0001!+000000366000!N!N!000000000000!AC66!RDTE/ELECTRONICS & COMMUNICATION EQ-MGMT SUPPORT !A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !3562!3!*!*!*!B!B!*!D !N!U!

Who is the contractor on this award?

The obligated recipient is STERLING SOFTWARE (U.S.), INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $13.0 million.

What is the period of performance?

Start: 2000-03-23. End: 2005-09-30.

What is Sterling Software's track record with similar sole-source defense contracts?

Sterling Software (U.S.), Inc. has a history of receiving defense contracts, including those awarded without full and open competition. Analyzing their past performance on sole-source awards for RDT&E or specialized support services is crucial. This includes examining contract modifications, cost overruns, and timely delivery of services. A review of their financial health and any past performance issues reported by agencies like the Government Accountability Office (GAO) or through contract performance assessments would provide further insight into their reliability and capability as a sole-source provider in this sensitive defense sector.

How does the $13M value compare to similar electronics management support contracts for attack helicopters?

Benchmarking the $13,015,066 contract value for Apache helicopter electronics management support against similar contracts is challenging without access to a broader dataset of sole-source awards or detailed cost breakdowns. However, contracts for RDT&E and specialized sustainment services for major weapon systems often run into millions of dollars over their lifecycle. The cost-plus-fixed-fee structure suggests that the final cost could fluctuate based on actual effort expended. A comparative analysis would ideally look at contracts for other attack helicopters (e.g., Cobra, Black Hawk variants) or similar complex electronic systems management, considering factors like contract duration, scope of work, and the specific technological requirements involved.

What are the primary risks associated with awarding a sole-source contract of this magnitude?

The primary risks associated with a sole-source award of this magnitude ($13M) include potential overpayment due to lack of competitive pricing, reduced incentive for the contractor to innovate or control costs, and a potential lack of transparency in the procurement process. There's also a risk that the government might be locked into a solution that is not the most technologically advanced or cost-effective if alternative vendors were not adequately considered. Furthermore, reliance on a single contractor can create vulnerabilities if that contractor experiences financial difficulties, operational issues, or decides to exit the market.

How effective is the Cost Plus Fixed Fee (CPFF) contract type for RDT&E in this context?

The Cost Plus Fixed Fee (CPFF) contract type is often used for Research, Development, Test, and Evaluation (RDT&E) efforts where the scope of work is not precisely defined at the outset, making it difficult to establish a firm fixed price. In this context, it allows the contractor to incur costs deemed reasonable and allocable, plus a predetermined fixed fee representing profit. While it facilitates RDT&E by accommodating uncertainties, it carries risks for the government, including potential cost overruns if the contractor's cost estimating or control is weak, and a reduced incentive for cost efficiency compared to fixed-price contracts. Effective oversight is critical to manage these risks.

What is the historical spending trend for Apache helicopter electronics management support?

Historical spending on Apache helicopter electronics management support, particularly for RDT&E and sustainment, has been substantial and ongoing, reflecting the platform's long service life and continuous upgrades. While this specific $13M contract represents a single award, the overall trend indicates consistent government investment in maintaining and enhancing the electronic systems of this critical asset. Analyzing aggregated spending data over several fiscal years for similar contract line items (CLINs) or product service codes (PSCs) related to Apache sustainment and upgrades would reveal the scale and pattern of this investment. This specific contract, awarded in 2000, is part of a larger, sustained effort.

What are the implications of the contract's duration (over 2000 days) for long-term program strategy?

A contract duration exceeding 2000 days (approximately 5.5 years) for electronics management support suggests a long-term strategic commitment by the Department of Defense to Sterling Software (U.S.), Inc. for this specific capability. This extended period implies that the services are critical and likely not easily replaceable or subject to frequent re-competition. It could indicate a stable, ongoing requirement for specialized expertise that the government believes is best met by this contractor. However, such long durations also raise questions about flexibility; if technology evolves rapidly or new solutions emerge, the government might be constrained by the existing contract, potentially hindering adaptation.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 1650 TYSONS BOULEVARD, SUI, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline