DoD's $40M Air Force contract for logistics support awarded to Sierra Nevada Company, LLC

Contract Overview

Contract Amount: $39,960,143 ($40.0M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2021-04-01

End Date: 2022-03-31

Contract Duration: 364 days

Daily Burn Rate: $109.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PRECISION STRIKE PACKAGE (PSP) CONTRACTOR LOGISTICS SUPPORT (CLS)

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to SIERRA NEVADA COMPANY, LLC for work described as: PRECISION STRIKE PACKAGE (PSP) CONTRACTOR LOGISTICS SUPPORT (CLS) Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value for money. 2. The contract's value of $39.96 million for a one-year period suggests a significant investment in specialized support. 3. Limited competition may lead to higher costs for taxpayers compared to a more open bidding process. 4. The 'Other Support Activities for Air Transportation' category indicates a focus on essential, non-flying operational services. 5. Performance context is crucial to determine if the fixed-price structure effectively incentivized efficiency. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

The contract's value of approximately $40 million for a single year of logistics support is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The firm-fixed-price structure offers some cost certainty, but the lack of competition raises concerns about whether the government achieved the best possible value. Further analysis of the specific services rendered and their necessity would be required to make a more definitive assessment of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Sierra Nevada Company, LLC, was solicited. This approach bypasses the typical competitive process where multiple companies bid on the work. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they limit price discovery and can potentially result in higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings that can arise from robust competition among multiple qualified bidders.

Public Impact

The primary beneficiaries are the Department of the Air Force units requiring specialized logistics support for their operations. Services delivered likely include maintenance, repair, supply chain management, and other essential support activities for air transportation assets. The geographic impact is concentrated where the Air Force operates the specific assets supported by this contract, likely within the United States. Workforce implications may include direct employment by Sierra Nevada Company, LLC, and potentially indirect employment through its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-sourcing.
Potential for cost overruns if not closely monitored due to limited competition.
No explicit small business set-aside, raising questions about broader economic impact.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Sierra Nevada Company, LLC is a known entity in defense contracting.
Contract duration of one year allows for periodic re-evaluation of needs.

Sector Analysis

The aerospace and defense sector is characterized by high-value, complex contracts often involving specialized technologies and services. Logistics support for air transportation is a critical component of military readiness, ensuring aircraft and associated systems are operational. Spending in this area is substantial, driven by the need for specialized expertise and infrastructure. This contract fits within the broader category of defense logistics and sustainment services, where companies like Sierra Nevada Company, LLC play a vital role in maintaining the operational capabilities of military assets.

Small Business Impact

This contract does not appear to have a small business set-aside. The sole-source nature of the award further limits the direct involvement of small businesses unless they are subcontractors to Sierra Nevada Company, LLC. An analysis of subcontracting plans would be necessary to understand the extent to which small businesses are benefiting from this contract and contributing to its execution.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified services within the agreed price. Transparency is limited due to the sole-source nature, but contract modifications, performance reports, and payment data would typically be subject to internal review and potentially Inspector General oversight if specific concerns arise.

Related Government Programs

Air Force Logistics Readiness
Defense Contractor Support Services
Aircraft Maintenance and Repair
Specialized Air Transportation Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost inefficiency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to SIERRA NEVADA COMPANY, LLC. PRECISION STRIKE PACKAGE (PSP) CONTRACTOR LOGISTICS SUPPORT (CLS)

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $40.0 million.

What is the period of performance?

Start: 2021-04-01. End: 2022-03-31.

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

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when there is only one responsible source capable of providing the required goods or services, or in cases of urgent and compelling need. For this contract, the justification would likely detail why Sierra Nevada Company, LLC was the only viable option, potentially citing unique capabilities, proprietary technology, or a critical operational requirement that could not be met through a competitive process. Without this justification, it is difficult to fully assess the necessity and potential risks associated with bypassing competition.

How does the cost of this contract compare to similar logistics support contracts for air transportation?

Direct cost comparison is challenging without access to detailed service breakdowns and market data for similar contracts. The total award of $39.96 million for a one-year period for 'Other Support Activities for Air Transportation' is a significant figure. However, without knowing the specific scope of work, the types of aircraft or systems supported, and the geographic locations involved, it's difficult to benchmark. A competitive environment typically drives prices down, so the sole-source nature of this award suggests that a direct comparison to competitively awarded contracts might not be entirely apples-to-apples. Further analysis would require identifying comparable contracts with similar service levels and contract types.

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

The primary risks associated with a sole-source contract of this magnitude include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the procurement process. Taxpayers may not be receiving the best value for their money. Additionally, there's a risk that the government becomes overly reliant on a single contractor, which could create vulnerabilities if that contractor faces financial difficulties or operational issues. Robust oversight and performance management are critical to mitigate these risks.

What is Sierra Nevada Company, LLC's track record with the Department of Defense, particularly in logistics support?

Sierra Nevada Company, LLC (SNC) has a significant track record with the Department of Defense, often involved in complex aerospace and defense systems. While this specific contract focuses on logistics support, SNC is known for its work in areas such as aircraft modification, electronic warfare, and intelligence, surveillance, and reconnaissance (ISR) systems. Their experience in these related fields suggests a deep understanding of military operational requirements. However, the extent of their direct experience specifically in providing comprehensive logistics support services for air transportation, as defined by this contract, would require a more detailed review of their past performance and contract history.

What performance metrics or key performance indicators (KPIs) are likely being used to evaluate Sierra Nevada Company, LLC's performance under this contract?

While specific KPIs are not detailed in the provided data, typical performance metrics for logistics support contracts include on-time delivery rates, equipment availability, maintenance turnaround times, inventory accuracy, and adherence to safety and quality standards. For a firm-fixed-price contract, the emphasis would be on meeting the defined scope of work and service level agreements within the agreed-upon budget. The Air Force would likely track metrics related to the operational readiness of the assets being supported, ensuring that the logistics services provided directly contribute to mission effectiveness. Regular performance reviews and reporting would be standard practice.

What is the historical spending pattern for similar 'Other Support Activities for Air Transportation' contracts within the Air Force?

Historical spending patterns for 'Other Support Activities for Air Transportation' can vary significantly based on the specific needs of the Air Force, the types of aircraft and operations supported, and the prevailing geopolitical climate. This category often encompasses a wide range of services, from ground support equipment maintenance to specialized technical assistance. Without access to historical contract databases and specific line-item details, it's challenging to provide precise figures. However, it is generally understood that such support services represent a substantial and ongoing investment for the Air Force to ensure the readiness and operational capability of its air assets.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA850918R0015

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Nevada Corporation

Address: 444 SALOMON CIR, SPARKS, NV, 89434

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

Financial Breakdown

Contract Ceiling: $39,960,143

Exercised Options: $39,960,143

Current Obligation: $39,960,143

Subaward Activity

Number of Subawards: 47

Total Subaward Amount: $7,258,123

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA850919D0001

IDV Type: IDC

Timeline