DoD awards $42.1M follow-on sustainment task order to Sierra Nevada Company for Afghanistan aircraft

Contract Overview

Contract Amount: $42,120,872 ($42.1M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2019-04-01

End Date: 2019-09-30

Contract Duration: 182 days

Daily Burn Rate: $231.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AFLCMC WWB, A-29 AFGHANISTAN, FOLLOW ON SUSTAINMENT TASK ORDER

Place of Performance

Location: SHALIMAR, OKALOOSA County, FLORIDA, 32579

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $42.1 million to SIERRA NEVADA COMPANY, LLC for work described as: AFLCMC WWB, A-29 AFGHANISTAN, FOLLOW ON SUSTAINMENT TASK ORDER Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Limited competition suggests potential risks to achieving best value for taxpayer dollars. 3. The contract's short duration (182 days) may indicate a need for rapid response or a placeholder for future work. 4. Focus on aircraft sustainment in a complex operational environment presents inherent performance risks. 5. The contract falls within the Aircraft Manufacturing sector, with a specific NAICS code of 336411. 6. No small business set-aside was applied, indicating a focus on large prime contractors.

Value Assessment

Rating: questionable

The contract's value of $42.1 million for a 182-day period is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The cost-plus-fixed-fee (CPFF) structure, while common for complex services, can incentivize cost overruns if not closely monitored. The lack of competition raises concerns about whether the government secured the best possible value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach is typically used when only one source is capable of meeting the requirement, or in cases of urgent need. The absence of multiple bidders means there was no direct price competition, which can lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher expenditures for taxpayers.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially allied forces operating in Afghanistan, receiving critical aircraft sustainment services. Services delivered include maintenance, repair, and logistical support for aircraft, ensuring operational readiness. The geographic impact is focused on operations within Afghanistan. Workforce implications include the potential employment of skilled technicians and support staff by Sierra Nevada Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
CPFF contract type may incentivize higher costs.
Operational environment in Afghanistan presents inherent risks.
Short duration could indicate a stop-gap measure or future contract uncertainty.

Positive Signals

Follow-on task order suggests prior successful performance or established relationship.
Focus on sustainment is critical for maintaining operational capabilities.
Sierra Nevada Company is a known entity in defense contracting.

Sector Analysis

This contract operates within the aerospace and defense sector, specifically focusing on aircraft manufacturing and sustainment. The market for aircraft maintenance and support services is substantial, driven by the ongoing operational needs of military branches. Comparable spending benchmarks would typically involve analyzing other sustainment contracts for similar aircraft types or operational theaters, though the sole-source nature here complicates direct comparison.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the prime contractor, Sierra Nevada Company, is expected to perform the majority of the work. The absence of small business involvement in this specific award means no direct benefit to the small business ecosystem through this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The CPFF contract type necessitates close monitoring of costs and progress to ensure accountability. Transparency is generally maintained through contract databases, though specific performance metrics and detailed cost breakdowns may not always be publicly available.

Related Government Programs

AFLCMC WWB
Afghanistan Security Assistance
Aircraft Sustainment Programs
Defense Logistics Support

Risk Flags

Sole-source award
Cost-plus contract type
High-risk operational environment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.1 million to SIERRA NEVADA COMPANY, LLC. AFLCMC WWB, A-29 AFGHANISTAN, FOLLOW ON SUSTAINMENT TASK ORDER

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 $42.1 million.

What is the period of performance?

Start: 2019-04-01. End: 2019-09-30.

What is Sierra Nevada Company's track record with similar sole-source sustainment contracts?

Sierra Nevada Company (SNC) has a history of performing complex defense contracts, including sustainment and support services. While this specific award is sole-source, SNC has experience with various contract types and agencies. Analyzing their past performance on similar sole-source awards, particularly those involving aircraft sustainment in challenging environments, would be crucial. This would involve reviewing past performance evaluations, any contract disputes, and the overall cost and schedule adherence on previous sole-source engagements to gauge their reliability and efficiency in such scenarios. Without access to detailed contract history and performance reviews, it's difficult to definitively assess their track record specifically for sole-source sustainment.

How does the $42.1 million value compare to typical aircraft sustainment costs for similar platforms?

Benchmarking the $42.1 million value for 182 days of aircraft sustainment is challenging without knowing the specific aircraft type, its operational tempo, and the scope of services included. However, for major military aircraft platforms, sustainment costs can range from millions to tens of millions annually, depending on complexity and usage. A 182-day period (approximately six months) represents a significant portion of a year. If this contract covers extensive maintenance, repair, overhaul, and logistical support for a fleet, the cost might be within a reasonable range for a sole-source award in a high-risk operational area. However, the lack of competition prevents a definitive value assessment against market alternatives.

What are the primary risks associated with a sole-source award for aircraft sustainment in Afghanistan?

The primary risks associated with a sole-source award for aircraft sustainment in Afghanistan include: 1. **Cost Overruns:** Without competitive pressure, the contractor may have less incentive to control costs, potentially leading to higher prices than if multiple bids were solicited. 2. **Reduced Innovation:** A sole-source environment may stifle innovation as there is no competitive drive to find more efficient or cost-effective solutions. 3. **Performance Issues:** While the contractor is known, the lack of competition means the government is reliant on a single provider, potentially facing challenges if performance falters and alternatives are limited. 4. **Dependency:** The government becomes dependent on the sole source, which can be problematic if the contractor faces financial difficulties or strategic shifts. The operational complexities and security risks in Afghanistan further amplify these concerns.

What does the 'follow-on sustainment task order' designation imply about the program's history and future?

The designation 'follow-on sustainment task order' implies that this contract is not a new requirement but rather a continuation or extension of previous work. This suggests that Sierra Nevada Company has likely been involved in providing sustainment services for these aircraft previously, possibly under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a prior sole-source award. This continuity can indicate a stable program where the government has established a relationship with a trusted provider. It also suggests that the need for sustainment is ongoing, and this task order is part of a larger, potentially long-term strategy for maintaining the operational readiness of the specified aircraft fleet.

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

The Cost Plus Fixed Fee (CPFF) contract type is designed for situations where the exact costs are difficult to estimate upfront, such as complex research, development, or services in uncertain environments. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts much of the cost risk to the government. While the fixed fee provides some incentive for the contractor to manage costs efficiently (as higher costs don't increase their profit), it can also lead to cost overruns if the initial cost estimates are inaccurate or if the contractor is not rigorously monitored. Effective oversight is crucial to ensure costs remain reasonable and the fixed fee remains appropriate.

Industry Classification

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

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: $51,609,588

Exercised Options: $51,609,588

Current Obligation: $42,120,872

Subaward Activity

Number of Subawards: 89

Total Subaward Amount: $26,712,602

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA863718D6003

IDV Type: IDC

Timeline