DoD awards $5.97B Sikorsky contract for aircraft manufacturing, with a 4571-day duration

Contract Overview

Contract Amount: $5,969,997,145 ($6.0B)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2014-06-26

End Date: 2026-12-31

Contract Duration: 4,571 days

Daily Burn Rate: $1.3M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACAT 1D - CRH

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $5.97 billion to SIKORSKY AIRCRAFT CORPORATION for work described as: ACAT 1D - CRH Key points: 1. Contract value of nearly $6 billion indicates a significant investment in critical aviation assets. 2. The firm-fixed-price structure aims to provide cost certainty for the Department of Defense. 3. A long contract duration of over 12 years suggests a need for sustained production and support. 4. The contract is classified under NAICS code 336411, indicating a focus on aircraft manufacturing. 5. This award represents a substantial commitment to a single contractor for a major defense system. 6. The absence of small business set-aside flags suggests a focus on large prime contractors.

Value Assessment

Rating: good

The contract's value of $5.97 billion over more than 12 years suggests a substantial investment. While specific benchmarking data is not provided, the firm-fixed-price (FFP) type generally offers good value by shifting cost risk to the contractor. The long duration implies a need for sustained production and support, which can sometimes lead to economies of scale. However, without comparative data on similar aircraft manufacturing contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The fact that it resulted in a definitive contract with Sikorsky Aircraft Corporation suggests they were the most competitive offeror. The level of competition at this stage is positive for price discovery, as it allows the government to solicit proposals from various qualified sources. The number of bidders is not specified, but the process implies a robust evaluation of technical and cost proposals.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through a competitive bidding process, ensuring the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches of the U.S. military requiring these specific aircraft. The contract will deliver critical aircraft manufacturing services, likely involving production, assembly, and potentially initial support for a fleet of aircraft. The geographic impact is primarily centered in Connecticut, where Sikorsky Aircraft Corporation is based, potentially supporting local and regional economies. This contract will have significant workforce implications, supporting jobs in aerospace engineering, manufacturing, and related support functions at Sikorsky and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term dependency on a single contractor could reduce future competition and potentially increase prices for sustainment or future variants.
The substantial value and duration may indicate a critical program where any disruption could have significant operational impacts.
Lack of specific details on performance metrics makes it difficult to assess the contractor's historical performance in detail.
The absence of small business participation could limit opportunities for smaller innovative firms within the supply chain.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded favorable pricing.
Firm-fixed-price contract type shifts cost overrun risk to the contractor, providing budget certainty.
The long duration indicates a stable, long-term requirement and commitment from the DoD, fostering contractor investment.
Sikorsky Aircraft Corporation is a well-established manufacturer with a long history in producing military aircraft.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector (NAICS 336411), a critical component of the broader aerospace and defense industry. The global aerospace market is substantial, with significant government spending driven by defense requirements. This contract represents a major award within this sector, likely for a specialized military aircraft. Comparable spending benchmarks would typically involve other large-scale aircraft procurement contracts, which often run into billions of dollars due to the complexity and cost of modern aviation platforms.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb: false'. This suggests that the primary award is to a large prime contractor, Sikorsky Aircraft Corporation. While there is no direct set-aside, large prime contractors are often required to meet subcontracting goals with small businesses. The impact on the small business ecosystem will depend on the extent to which Sikorsky incorporates small businesses into its supply chain for this contract.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Defense, likely through the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is facilitated by the contract's public award notice. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

DoD Aircraft Procurement
Major Defense Acquisition Programs
Rotary-Wing Aircraft Manufacturing
Air Force Logistics and Sustainment Contracts

Risk Flags

Long contract duration may increase risk of obsolescence or performance degradation.
High contract value necessitates robust oversight to ensure value for money.
Lack of small business set-aside may limit broader economic participation.
Firm Fixed Price structure shifts risk but requires careful monitoring of scope creep.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.97 billion to SIKORSKY AIRCRAFT CORPORATION. ACAT 1D - CRH

Who is the contractor on this award?

The obligated recipient is SIKORSKY AIRCRAFT CORPORATION.

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 $5.97 billion.

What is the period of performance?

Start: 2014-06-26. End: 2026-12-31.

What is the historical spending pattern for this specific aircraft type or program prior to this award?

Prior to this definitive contract awarded in 2014 with an end date of 2026, historical spending on this aircraft program would have likely occurred through various contract vehicles, potentially including other transaction agreements, sole-source contracts, or earlier competitive awards if this represents a new variant or a continuation of an existing platform. Without specific program identifiers, it's challenging to pinpoint exact prior spending. However, large military aircraft programs typically involve substantial R&D and procurement funding over many years. The $5.97 billion value of this current contract suggests a significant, long-term commitment, implying that previous investments were also substantial, likely in the hundreds of millions or billions, to reach the production and sustainment phase covered by this award.

How does the per-unit cost of this aircraft compare to similar platforms in the DoD inventory or internationally?

Determining the precise per-unit cost is difficult without knowing the exact number of aircraft to be delivered under this $5.97 billion contract and the breakdown of costs between production, support, and other elements. However, military aircraft, especially specialized ones like those likely produced by Sikorsky, are inherently expensive due to advanced technology, stringent performance requirements, and low production volumes compared to commercial aircraft. For context, advanced military helicopters can range from tens of millions to over a hundred million dollars per unit, depending on complexity and mission capabilities. Benchmarking against similar platforms like the Boeing CH-47 Chinook or other heavy-lift helicopters would require access to specific program data and cost reports, which are often not publicly detailed.

What are the key performance indicators (KPIs) and associated penalties or incentives within this contract?

The provided data indicates a 'FIRM FIXED PRICE' contract type ('pt': 'FIRM FIXED PRICE'). This structure inherently places the financial risk of cost overruns on the contractor, Sikorsky Aircraft Corporation. While specific KPIs and incentive structures are not detailed in the summary data, firm-fixed-price contracts typically focus on meeting delivery schedules, quality standards, and technical specifications. Penalties might be associated with late deliveries or failure to meet critical performance thresholds. Conversely, incentives could be tied to early delivery or exceeding certain performance benchmarks, although these are less common in pure FFP contracts compared to cost-plus or incentive-fee structures. Detailed KPIs would be outlined in the contract's statement of work.

What is Sikorsky Aircraft Corporation's track record with similar large-scale defense contracts?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long and extensive track record of producing military aircraft, particularly helicopters, for the U.S. Department of Defense and international customers. They are renowned for platforms such as the UH-60 Black Hawk, CH-53 Sea Stallion/Super Stallion, and the VH-60N White Hawk (Marine One). Their history includes numerous large-scale production and sustainment contracts, often awarded through competitive processes. While specific performance details on all past contracts are not publicly itemized here, their continued success in securing major defense awards indicates a generally strong performance record and capability in meeting the demanding requirements of military aviation.

What is the potential risk associated with the long contract duration (over 12 years)?

The long duration of this contract (4571 days, approximately 12.5 years) presents several potential risks. Firstly, it increases the risk of technological obsolescence if the aircraft's capabilities become outdated relative to emerging threats or advancements during the contract period. Secondly, it heightens the risk of contractor performance degradation over such an extended period; maintaining consistent quality and efficiency can be challenging. Thirdly, long-term contracts can sometimes lead to complacency or reduced innovation from the contractor, assuming a guaranteed revenue stream. Finally, significant changes in geopolitical landscapes or defense priorities could render the contracted aircraft less relevant, leading to potential contract modifications or terminations, which can be complex and costly.

How does the 'ACAT 1D - CRH' designation impact oversight and reporting requirements?

The 'ACAT 1D - CRH' designation signifies that this is a Major Defense Acquisition Program (MDAP) at the highest level (ACAT I) within the Department of Defense, specifically related to a Critical Defense Acquisition Program (CRH). ACAT I programs are subject to the most stringent oversight, including mandatory Defense Acquisition Board (DAB) reviews at key milestones, extensive reporting requirements to Congress and the Pentagon leadership, and rigorous program management controls. This designation implies a high level of scrutiny regarding cost, schedule, and performance, with significant congressional and DoD leadership involvement to ensure program success and accountability for the substantial investment.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 6900 MAIN ST, STRATFORD, CT, 06614

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $11,949,190,127

Exercised Options: $6,494,067,645

Current Obligation: $5,969,997,145

Actual Outlays: $55,366,093

Subaward Activity

Number of Subawards: 2350

Total Subaward Amount: $673,381,374

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline