DoD's $948K contract for LAA test pilot school support awarded to Sierra Nevada Company, LLC

Contract Overview

Contract Amount: $9,485,810 ($9.5M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2025-03-14

End Date: 2026-02-28

Contract Duration: 351 days

Daily Burn Rate: $27.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CONTRACTOR LOGISTICS SUPPORT FOR LIGHT ATTACK AIRCRAFT (LAA) TEST PILOT SCHOOL

Place of Performance

Location: EDWARDS, KERN County, CALIFORNIA, 93524

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $9.5 million to SIERRA NEVADA COMPANY, LLC for work described as: CONTRACTOR LOGISTICS SUPPORT FOR LIGHT ATTACK AIRCRAFT (LAA) TEST PILOT SCHOOL Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Cost-plus-fixed-fee structure may incentivize cost increases. 3. Short contract duration (351 days) suggests a focused, potentially time-sensitive need. 4. Contractor's role in logistics support for a specialized pilot school indicates a niche capability. 5. Geographic location in California may impact local economic and workforce dynamics. 6. Absence of small business set-aside raises questions about broader economic inclusion.

Value Assessment

Rating: questionable

The contract value of $948,581 for 351 days of support appears high for logistics services, especially given the sole-source award. Without competitive bidding, it's difficult to benchmark the pricing against market rates or similar contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can lead to higher overall costs if not managed diligently, as it provides less incentive for the contractor to control expenses compared to fixed-price contracts. Further analysis of the specific services rendered and the contractor's proposed labor mix would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not conduct a competitive solicitation. This approach is typically used when only one responsible source can provide the required services, often due to unique capabilities, urgent needs, or specific program requirements. The lack of competition means that taxpayers did not benefit from the price discovery and potential cost savings that typically arise from multiple bidders vying for the contract.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price, potentially leading to higher costs for taxpayers. It also bypasses opportunities to foster a wider range of suppliers and encourage innovation through competition.

Public Impact

The primary beneficiaries are the personnel involved in the Light Attack Aircraft (LAA) Test Pilot School, ensuring they receive necessary logistical support for training. Services delivered include essential logistics support critical for the operational readiness and effectiveness of the pilot training program. The contract's geographic impact is concentrated in California, where the services are being performed, potentially benefiting local support businesses and workforce. Workforce implications may include the direct employment of personnel by Sierra Nevada Company, LLC, for the execution of logistics and support functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee structure may not incentivize cost efficiency.
Lack of small business participation noted.
Limited transparency due to non-competitive nature.

Positive Signals

Contract awarded to a known entity (Sierra Nevada Company, LLC).
Focus on specialized support for a critical training program.
Clear contract end date provides defined project scope.

Sector Analysis

The contract falls within the broader aerospace and defense sector, specifically supporting specialized aviation training. The market for aviation logistics and support services is substantial, with significant government spending allocated to maintaining and operating aircraft fleets and training programs. This contract represents a small but critical component of the Air Force's investment in pilot development for light attack aircraft, a niche within the larger defense aviation landscape. Benchmarking this specific type of support is challenging due to its specialized nature, but overall defense logistics spending runs into billions annually.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to Sierra Nevada Company, LLC, a large business, suggests that the primary focus was on securing the required specialized logistics support rather than promoting small business participation. This could limit opportunities for small businesses to engage in this specific contract's value chain and contribute to the defense aviation support ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. As a sole-source award, the justification for this procurement method should be documented and available for review. Transparency may be limited due to the non-competitive nature, but contract performance metrics and financial expenditures should be subject to internal audits and potentially oversight by the Government Accountability Office (GAO) or the Inspector General if performance issues arise.

Related Government Programs

Air Force Pilot Training Programs
Light Attack Aircraft (LAA) Acquisition and Support
Defense Logistics and Sustainment Services
Specialized Aviation Training Contracts

Risk Flags

Sole-source award may limit cost savings.
CPFF structure can lead to cost overruns if not managed.
Lack of competition reduces market pressure on pricing and innovation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.5 million to SIERRA NEVADA COMPANY, LLC. CONTRACTOR LOGISTICS SUPPORT FOR LIGHT ATTACK AIRCRAFT (LAA) TEST PILOT SCHOOL

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 $9.5 million.

What is the period of performance?

Start: 2025-03-14. End: 2026-02-28.

What is the specific nature of the 'logistics support' provided under this contract for the LAA Test Pilot School?

The provided data indicates the contract is for 'CONTRACTOR LOGISTICS SUPPORT FOR LIGHT ATTACK AIRCRAFT (LAA) TEST PILOT SCHOOL.' While the specific details of the logistics support are not enumerated in the summary data, it typically encompasses a range of services essential for the operation and maintenance of aircraft and training facilities. This could include supply chain management for parts and equipment, maintenance and repair services, ground support equipment operation, facility management related to aircraft operations, and potentially administrative support for the school's logistical needs. Given the specialized nature of a test pilot school, the support might also involve unique testing equipment, specialized tooling, and technical documentation management crucial for evaluating and refining LAA capabilities.

What is the justification for awarding this contract on a sole-source basis?

The provided data explicitly states the contract type as 'NOT COMPETED,' which aligns with a sole-source award. The specific justification for this sole-source determination is not detailed in the summary data. However, common reasons for sole-source procurements in the defense sector include situations where only one contractor possesses the unique technical expertise, specialized equipment, or proprietary knowledge required to fulfill the requirement. This could be due to the highly specialized nature of LAA test pilot training, requiring specific contractor experience or access to proprietary systems. Alternatively, urgent and compelling circumstances, or the follow-on nature of a contract to a previous sole-source award where competition was previously determined not feasible, could also be cited.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development or complex services where the scope of work is not precisely defined at the outset, making fixed-price contracts difficult to establish. For taxpayers, the CPFF structure carries a risk of cost overruns, as the contractor has less direct financial incentive to control costs compared to fixed-price contracts. The fixed fee, however, provides a predictable profit margin for the contractor. Effective oversight by the government is crucial to ensure that all costs claimed are allowable, reasonable, and allocable to the contract, and that the fixed fee adequately compensates the contractor for the effort involved.

What is the historical spending pattern for similar logistics support contracts for aviation training within the Department of the Air Force?

Analyzing historical spending patterns for similar logistics support contracts requires access to a broader dataset than what is provided. However, generally, the Department of the Air Force, like other branches of the military, allocates significant resources to sustainment and training operations. Contracts for aviation logistics support can range from small, specialized services like this one to massive, multi-year sustainment programs for entire fleets. Spending can fluctuate based on modernization programs, operational tempo, and the introduction of new aircraft types. Without specific data on prior LAA training support contracts or comparable pilot school logistics, it's difficult to establish a precise historical benchmark for this $948K contract. However, the trend in defense spending is generally upward, with a consistent need for robust logistics to ensure readiness.

What are the potential risks associated with relying on a single contractor for specialized pilot training logistics?

Relying on a single contractor for specialized pilot training logistics, as indicated by this sole-source award, presents several potential risks. Firstly, there's a risk of vendor lock-in, where the government becomes dependent on the contractor's unique capabilities, making it difficult and costly to switch providers in the future. This dependency can reduce leverage in future negotiations. Secondly, without competitive pressure, the contractor may have less incentive to innovate or improve service efficiency, potentially leading to stagnation in service quality or higher-than-necessary costs over time. Thirdly, a sole-source arrangement can increase vulnerability to disruptions; if the contractor experiences financial difficulties, operational issues, or decides to exit the market, the impact on the critical pilot training program could be severe and immediate, with limited alternative options available.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Nevada Corporation

Address: 1150 N EGLIN PKWY, SHALIMAR, FL, 32579

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: $18,840,677

Exercised Options: $9,485,810

Current Obligation: $9,485,810

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline