DoD's $30M contract for air transportation support awarded to Sierra Nevada Company, LLC

Contract Overview

Contract Amount: $30,153,363 ($30.2M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2025-04-01

End Date: 2026-03-31

Contract Duration: 364 days

Daily Burn Rate: $82.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PSP CLS

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $30.2 million to SIERRA NEVADA COMPANY, LLC for work described as: PSP CLS Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. Limited competition may indicate a specialized need or a lack of market availability for the required services. 4. The contract duration of 364 days suggests a need for ongoing support rather than a one-time project. 5. The fixed fee component provides some cost certainty, but the cost-plus element requires diligent oversight. 6. The specific nature of 'Other Support Activities for Air Transportation' warrants further investigation into its criticality and alternatives.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the services provided and comparable market rates. The cost-plus-fixed-fee structure means the final cost is not fully predetermined, making direct comparison difficult. However, the lack of competition suggests that the government may not have secured the most competitive pricing available in the market. The fixed fee portion of the contract provides a baseline, but the variable cost component requires close monitoring to ensure it aligns with expected expenditures and delivers good value.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or in urgent situations. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the best possible value. It also raises questions about whether a broader search for potential contractors was conducted.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing the requirement, there is less assurance that the price reflects fair market value, potentially leading to higher overall spending.

Public Impact

The primary beneficiaries are likely the Department of the Air Force, which receives essential support for its air transportation operations. The services delivered are categorized under 'Other Support Activities for Air Transportation,' implying a range of logistical, maintenance, or operational assistance. The geographic impact is centered in Nevada (NV), where the contractor, Sierra Nevada Company, LLC, is located and presumably performing the work. Workforce implications could include employment opportunities within Sierra Nevada Company, LLC, and potentially within the Air Force units supported by these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially value for taxpayer dollars.
Cost-plus-fixed-fee structure requires robust oversight to manage cost escalations.
Lack of detailed service description makes it difficult to assess necessity and efficiency.
Contract duration suggests ongoing reliance, potentially missing opportunities for process improvement or alternative solutions.

Positive Signals

Award to an established entity, Sierra Nevada Company, LLC, may indicate reliability and existing expertise.
Fixed fee component provides a degree of cost predictability for the government.
Contract duration ensures continuity of essential support services for air transportation.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government investment. Contracts for support activities, such as those for air transportation, are crucial for maintaining operational readiness and efficiency. This contract fits within the broader category of logistics and support services, which represent a substantial portion of defense spending. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the 'other support activities,' but the overall market for defense support services is vast.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contract was not competed, which typically limits opportunities for small businesses to participate as prime contractors. Subcontracting opportunities for small businesses are possible but depend on Sierra Nevada Company, LLC's internal policies and the specific needs of the contract. The overall impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Air Force, which awarded the contract. As a sole-source award, scrutiny may be higher to ensure fair pricing and necessity. Accountability measures would be embedded in the contract's performance clauses and reporting requirements. Transparency could be enhanced by making detailed service descriptions and performance metrics publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Air Mobility Command Support Contracts
Department of Defense Logistics and Maintenance Services
Air Force Aviation Support Services
Aerospace Support Infrastructure Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of detailed service description

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.2 million to SIERRA NEVADA COMPANY, LLC. PSP 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 $30.2 million.

What is the period of performance?

Start: 2025-04-01. End: 2026-03-31.

What specific 'Other Support Activities for Air Transportation' are covered under this contract?

The provided data indicates the contract falls under the NAICS code 488190, which covers 'Other Support Activities for Air Transportation.' This broad category can encompass a wide range of services, including but not limited to, airport operations support, air traffic control services (if not provided by the government), aircraft maintenance and repair services (excluding heavy overhaul), ground support equipment maintenance, cargo handling, passenger services, and facility management at airfields. Without further details from the contract award itself, the precise scope of services remains unspecified. Understanding the exact nature of these activities is crucial for assessing their necessity, cost-effectiveness, and potential for competition.

What is the typical cost structure for similar 'Other Support Activities for Air Transportation' contracts within the Department of Defense?

Contracts for 'Other Support Activities for Air Transportation' within the DoD can vary significantly in their cost structure depending on the nature of the services, the duration, and the level of risk involved. Common structures include Firm-Fixed-Price (FFP), Cost-Plus-Fixed-Fee (CPFF), Cost-Plus-Incentive-Fee (CPIF), and Time and Materials (T&M). CPFF, as seen in this award, is often used for services where the scope is not precisely defined or involves research and development, allowing for flexibility but requiring strong oversight to control costs. FFP is preferred when requirements are well-defined to ensure price certainty. Benchmarking against similar CPFF contracts for support activities would involve analyzing historical data for cost growth, fee percentages, and overall expenditure relative to defined performance metrics.

What are the potential risks associated with a sole-source award for essential air transportation support?

A sole-source award for essential air transportation support carries several risks. Primarily, it eliminates the potential for competitive bidding, which is a key mechanism for ensuring the government receives the best possible price and value. This can lead to higher costs for taxpayers. Secondly, it reduces the incentive for the sole-source provider to innovate or improve efficiency, as there is no direct market pressure from competitors. Thirdly, it creates a dependency on a single contractor, which can be problematic if the contractor experiences financial difficulties, performance issues, or decides to exit the market. Finally, it raises concerns about whether the government adequately explored all potential sources or if the sole-source justification is robust.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type influence cost control and contractor performance?

The Cost Plus Fixed Fee (CPFF) contract type aims to balance flexibility with cost control. The government agrees to pay the contractor's actual allowable costs incurred in performing the work, plus a predetermined fixed fee representing the contractor's profit. This structure is beneficial when the scope of work is uncertain or involves significant risk, allowing the contractor to adapt without constant renegotiation of the price. However, it places a heavy burden on the government to meticulously track and audit costs to prevent overruns. Contractor performance is influenced by the fixed fee, which is earned upon successful completion, but the primary incentive for cost efficiency lies in the government's oversight and potential for future contract awards rather than direct cost savings for the contractor within this specific contract.

What is the significance of the contract being a 'Delivery Order' under a larger contract vehicle?

The data indicates this award is a 'Delivery Order' (aw: DELIVERY ORDER). This means it is not a standalone contract but rather a specific order placed against an existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar type of contract vehicle. Delivery orders allow the government to procure specific goods or services as needed, up to a certain ceiling amount defined in the parent contract. The significance here is that the initial competition and contract negotiation likely occurred when the parent contract vehicle was established. However, the specific terms and pricing for this particular delivery order, especially if it was a sole-source order against a competitively awarded IDIQ, still warrant scrutiny regarding fair pricing and necessity for the specified period and services.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

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: $41,981,450

Exercised Options: $41,981,450

Current Obligation: $30,153,363

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $5,159,218

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