DoD awards $37.1M for MC-130W fleet logistics support to Sierra Nevada Company

Contract Overview

Contract Amount: $37,129,876 ($37.1M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2012-01-01

End Date: 2014-03-31

Contract Duration: 820 days

Daily Burn Rate: $45.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: CONTRACT LOGISTICS SUPPORT TO ADD PRECISION STRIKE PACKAGE (PSP) AND INTELLIGENCE, SURVEILLANCE AND RECONNAISSANCE CAPABILITIES TO THE MC-130W FLEET.

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $37.1 million to SIERRA NEVADA COMPANY, LLC for work described as: CONTRACT LOGISTICS SUPPORT TO ADD PRECISION STRIKE PACKAGE (PSP) AND INTELLIGENCE, SURVEILLANCE AND RECONNAISSANCE CAPABILITIES TO THE MC-130W FLEET. Key points: 1. Contract provides essential logistics and ISR capabilities for the MC-130W fleet. 2. Sole-source award raises questions about potential cost efficiencies and market alternatives. 3. Contract duration of 820 days suggests a need for sustained support. 4. Engineering services (NAICS 541330) indicate a focus on technical and specialized support. 5. The contract's value is moderate within the context of defense logistics. 6. Lack of competition may limit opportunities for price discovery and innovation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific technical requirements. The total award of $37.1 million over approximately 2.2 years suggests an average annual spend of around $16.8 million. Without comparable sole-source contracts for similar specialized logistics and ISR integration for the MC-130W fleet, a direct value-for-money assessment is difficult. However, the Cost No Fee (CNF) contract type implies that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Sierra Nevada Company, LLC, was solicited. This approach is typically used when there is a unique capability or urgency that precludes full and open competition. The lack of multiple bidders means that the government did not benefit from a competitive bidding process, which could have led to lower prices or more innovative solutions. The justification for a sole-source award would need to be robust to ensure the government is receiving fair value.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not have the benefit of competitive pressure to drive down prices. It also limits opportunities for other capable businesses to compete for government contracts.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the MC-130W fleet, ensuring operational readiness and enhanced intelligence capabilities. Services delivered include critical logistics support and integration of Intelligence, Surveillance, and Reconnaissance (ISR) systems. The geographic impact is likely global, supporting deployed MC-130W aircraft missions. Workforce implications include specialized technical and logistics personnel employed by Sierra Nevada Company and potentially government oversight personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential for cost savings.
Lack of transparency in the justification for sole-sourcing could hide inefficiencies.
Contract type (Cost No Fee) shifts cost overrun risk to the contractor, but requires careful monitoring to ensure performance.

Positive Signals

Contract provides critical, specialized support for a key military asset (MC-130W).
Cost No Fee contract type can protect the government from cost overruns.
Sierra Nevada Company is a known entity in defense contracting, suggesting some level of established capability.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a significant segment of the defense industrial base. The market for specialized aerospace engineering and logistics support is often characterized by a limited number of highly capable firms. While the overall defense logistics market is vast, contracts for specific aircraft fleet support, especially those involving advanced ISR integration, tend to be concentrated among a few key players. Comparable spending benchmarks would typically involve other contracts for similar aircraft sustainment and modification programs, which can range from tens to hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by `sb: false`. Furthermore, the contractor, Sierra Nevada Company, LLC, is a significant defense contractor, suggesting it is not a small business. There is no explicit information regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem from this particular contract is likely minimal, though larger prime contractors often engage small businesses for various support roles.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The contract type (Cost No Fee) requires diligent monitoring by the government to ensure the contractor is managing costs effectively and meeting performance requirements, even though the financial risk of overruns lies with the contractor. Transparency regarding the sole-source justification and any performance metrics would be key to assessing accountability.

Related Government Programs

MC-130W Combat Spear Program
Air Force Special Operations Command (AFSOC) Logistics Support
Intelligence, Surveillance, and Reconnaissance (ISR) Systems Integration
Defense Logistics Agency (DLA) Support Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (mitigated by CNF type, but requires oversight)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.1 million to SIERRA NEVADA COMPANY, LLC. CONTRACT LOGISTICS SUPPORT TO ADD PRECISION STRIKE PACKAGE (PSP) AND INTELLIGENCE, SURVEILLANCE AND RECONNAISSANCE CAPABILITIES TO THE MC-130W FLEET.

Who is the contractor on this award?

The obligated recipient is SIERRA NEVADA COMPANY, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $37.1 million.

What is the period of performance?

Start: 2012-01-01. End: 2014-03-31.

What is Sierra Nevada Company's track record with similar sole-source contracts for defense logistics and ISR integration?

Sierra Nevada Company (SNC) has a substantial track record in defense contracting, including work on intelligence, surveillance, and reconnaissance (ISR) platforms and specialized aircraft modifications. While specific details on their sole-source contracts for logistics and ISR integration for the MC-130W fleet are not publicly detailed in this data, SNC has been involved in significant programs such as the AC-130J Ghostrider and various ISR sensor development and integration projects. Their history suggests a capability to handle complex technical requirements. However, the absence of competitive bidding for this specific contract necessitates a thorough review of their past performance on similar sole-source awards to ensure fair pricing and effective delivery compared to potential alternatives.

How does the $37.1 million contract value compare to other logistics support contracts for similar military aircraft fleets?

The $37.1 million contract value for logistics and ISR support for the MC-130W fleet over approximately 2.2 years (820 days) represents an average annual spend of roughly $16.8 million. This figure is moderate within the broader landscape of military aircraft sustainment. Larger, more complex platforms or fleets with extensive modification requirements can command logistics support contracts in the hundreds of millions or even billions of dollars over their lifecycle. For example, sustainment contracts for fighter jets or large transport aircraft often exceed this amount annually. The specific nature of the MC-130W's role and the scope of the ISR integration likely influence this contract's value, making direct comparisons difficult without detailed scope-of-work analysis.

What are the primary risks associated with a sole-source award for critical defense capabilities like the MC-130W fleet support?

The primary risks associated with a sole-source award for critical defense capabilities are related to cost and innovation. Without competition, there is less pressure on the contractor to offer the most competitive pricing, potentially leading to higher costs for the government and taxpayers. Furthermore, the absence of multiple bidders can stifle innovation, as there is no incentive for alternative approaches or technologies to be introduced. There's also a risk of vendor lock-in, where the government becomes dependent on a single provider, making future transitions or renegotiations more difficult. Robust justification and oversight are crucial to mitigate these risks.

What is the expected program effectiveness or outcome based on this contract's objectives?

The expected program effectiveness hinges on the successful provision of 'contract logistics support to add precision strike package (PSP) and intelligence, surveillance and reconnaissance (ISR) capabilities to the MC-130W fleet.' This implies that upon completion, the MC-130W aircraft will be more capable in terms of both offensive precision strike and intelligence gathering. Enhanced ISR capabilities should lead to better situational awareness for mission commanders, improved target identification, and potentially reduced risk to aircrews. The logistics support ensures the fleet remains operational and mission-ready. The ultimate effectiveness will be measured by the fleet's ability to meet its operational objectives with the enhanced capabilities provided under this contract.

How has federal spending on engineering services for aircraft logistics support evolved over recent years?

Federal spending on engineering services for aircraft logistics support has generally seen consistent demand, driven by the need to maintain aging fleets and integrate new technologies. While specific figures for the MC-130W program are not detailed here, the broader trend shows significant investment across the Department of Defense (DoD) in sustainment, modernization, and upgrades for various aircraft platforms. Spending in this category can fluctuate based on defense budgets, geopolitical priorities, and the lifecycle stage of different aircraft. The increasing complexity of modern ISR and weapon systems necessitates specialized engineering support, contributing to sustained or growing expenditure in this area. Data from sources like the Congressional Budget Office (CBO) and DoD budget requests would provide a more comprehensive view of historical spending trends.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 444 SALOMON CIR, SPARKS, NV, 89434

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $39,172,701

Exercised Options: $39,172,701

Current Obligation: $37,129,876

Subaward Activity

Number of Subawards: 41

Total Subaward Amount: $5,978,597

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline