Sikorsky Aircraft Corporation awarded $83.5M contract for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $11,500,000 ($11.5M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2006-08-11

End Date: 2008-11-01

Contract Duration: 813 days

Daily Burn Rate: $14.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200611!000289!9700!H92241!USSOCOM, TAKO CONTRACTING DIV. !H9224106C0090 !A!C! !N! ! !20060811!20081101!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74190!001!09!STRATFORD !FAIRFIELD !CONN !+000011500000!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!Z!N!Z! ! !Y!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $11.5 million to SIKORSKY AIRCRAFT CORPORATION for work described as: 200611!000289!9700!H92241!USSOCOM, TAKO CONTRACTING DIV. !H9224106C0090 !A!C! !N! ! !20060811!20081101!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74190!001!09!STRATFORD !FAIR… Key points: 1. Contract awarded without competition, potentially limiting price discovery and value for taxpayers. 2. Significant contract value for aircraft parts suggests a critical role in aviation support. 3. The firm fixed-price contract type shifts risk to the contractor, but the lack of competition obscures true market value. 4. Contract duration of over two years indicates a sustained need for these aircraft components. 5. Awarded to a single entity, highlighting potential market concentration or specific capability requirements. 6. The contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, indicating specialized components.

Value Assessment

Rating: questionable

The contract value of $83.5 million for aircraft parts is substantial. However, without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The firm fixed-price nature is generally favorable for cost control, but the lack of competition prevents an assessment of whether the government received the best possible value. Further analysis would be needed to determine if the price is reasonable in the absence of a competitive process.

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. This indicates that only one contractor, Sikorsky Aircraft Corporation, was solicited for this requirement. The lack of competition means there was no opportunity for multiple vendors to bid, which typically drives down prices and fosters innovation. It suggests either a unique capability held by Sikorsky or a potential oversight in the procurement process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This limits the government's ability to secure the best value for public funds.

Public Impact

The primary beneficiaries are likely U.S. Special Operations Command (USSOCOM) and potentially other Department of Defense entities relying on Sikorsky aircraft. The contract delivers essential aircraft parts and auxiliary equipment, crucial for maintaining the operational readiness of aviation assets. The geographic impact is primarily within Connecticut, where Sikorsky Aircraft Corporation is located, but the ultimate impact is on national defense readiness. Workforce implications include continued employment and potential expansion at Sikorsky's facilities, supporting specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment and lack of market-driven pricing.
Sole-source awards can indicate a lack of market research or a failure to identify alternative suppliers.
The substantial dollar amount without competition warrants scrutiny to ensure fiscal responsibility.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
The contract supports critical aviation assets for a key military command (USSOCOM).
Sikorsky Aircraft Corporation is a known entity in the aerospace industry, suggesting a level of established capability.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and components. The market for such specialized parts is often concentrated among a few key manufacturers, especially for specific aircraft platforms. Sikorsky Aircraft Corporation is a major player in this space. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft components, but the sole-source nature of this award makes direct comparison challenging.

Small Business Impact

There is no indication that this contract involved small business set-asides. As a sole-source award to a large corporation, it is unlikely to have direct subcontracting opportunities for small businesses unless specified by the prime contractor. This contract does not appear to contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's procurement regulations and the U.S. Special Operations Command. Accountability measures are inherent in the firm fixed-price structure, but transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Aircraft Procurement
Special Operations Command Aviation Support
Aerospace Component Manufacturing Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for unverified pricing
Significant contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.5 million to SIKORSKY AIRCRAFT CORPORATION. 200611!000289!9700!H92241!USSOCOM, TAKO CONTRACTING DIV. !H9224106C0090 !A!C! !N! ! !20060811!20081101!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74190!001!09!STRATFORD !FAIRFIELD !CONN !+000011500000!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !336413!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is SIKORSKY AIRCRAFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $11.5 million.

What is the period of performance?

Start: 2006-08-11. End: 2008-11-01.

What is Sikorsky Aircraft Corporation's track record with government contracts, particularly sole-source awards?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long history of supplying aircraft and components to the U.S. military. While they have secured numerous contracts, including large sole-source awards for specialized platforms like the Black Hawk helicopter, the frequency and justification for sole-source awards warrant scrutiny. Analyzing their contract history reveals a pattern of significant awards, often tied to unique platforms or upgrades where competition may be limited. However, the specific justifications for each sole-source award would need to be reviewed to ensure they align with federal procurement regulations and represent the best value for the government.

How does the $83.5 million contract value compare to similar aircraft parts contracts awarded competitively?

Direct comparison of this $83.5 million contract value to competitively awarded contracts for similar aircraft parts is challenging due to the sole-source nature of this award. Competitively bid contracts typically result in lower prices due to market forces. Without knowing the specific type and quantity of parts, it's difficult to establish a precise benchmark. However, generally, sole-source awards are expected to be higher than their competitive counterparts. Further analysis would require identifying comparable contracts for the same or similar aircraft platforms and parts, factoring in quantity, specifications, and contract type, to assess potential price discrepancies.

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

The primary risks associated with awarding an $83.5 million contract on a sole-source basis include: 1. **Lack of Best Value:** The government may not be obtaining the best possible price or terms because there is no competition to drive down costs or encourage innovative solutions. 2. **Potential for Overpricing:** Without competitive pressure, the contractor may charge higher prices than would be achievable in a competitive environment. 3. **Reduced Transparency:** Sole-source awards can be less transparent, making it harder for the public and oversight bodies to assess the fairness and reasonableness of the price. 4. **Contractor Dependence:** It can foster over-reliance on a single supplier, potentially limiting future sourcing options and flexibility. 5. **Missed Opportunities:** The government might miss out on innovative technologies or more cost-effective solutions that other potential bidders could offer.

What is the historical spending pattern for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by USSOCOM?

Historical spending by U.S. Special Operations Command (USSOCOM) on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) would need to be analyzed through federal procurement databases like FPDS-NG. This specific contract represents a significant single award within this category. To understand the pattern, one would examine the total annual spending by USSOCOM on this NAICS code over several fiscal years, identifying the number of contracts awarded, their values, and the primary contractors. This analysis would reveal whether this $83.5 million award is an outlier, part of a consistent spending trend, or indicative of a shift in procurement focus for aviation components.

What specific aircraft or systems does this contract likely support, given it's for Sikorsky aircraft parts?

Given that the contract is with Sikorsky Aircraft Corporation and involves aircraft parts, it most likely supports Sikorsky-manufactured aircraft platforms. Prominent among these are the UH-60 Black Hawk and its variants (like the MH-60 for naval operations), the CH-53 Sea Stallion/Super Stallion family of heavy-lift helicopters, and potentially the MH-53 Pave Low used by special operations. These platforms are integral to various branches of the U.S. military, including Army, Marine Corps, and Special Operations Command. The 'auxiliary equipment' could encompass a wide range of components, from engine parts and rotor blades to avionics, landing gear, and internal systems critical for the operation and maintenance of these complex aircraft.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 6900 MAIN STREET, STRATFORD, CT, 03

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline