DHS awards $43.5M for two multi-role enforcement aircraft, with Sierra Nevada Company as prime

Contract Overview

Contract Amount: $43,548,852 ($43.5M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2014-12-30

End Date: 2016-05-31

Contract Duration: 518 days

Daily Burn Rate: $84.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ORDER OF TWO (2) MULTI-ROLE ENFORCEMENT AIRCRAFT (MEA)

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Homeland Security obligated $43.5 million to SIERRA NEVADA COMPANY, LLC for work described as: ORDER OF TWO (2) MULTI-ROLE ENFORCEMENT AIRCRAFT (MEA) Key points: 1. Contract awarded via full and open competition, suggesting a robust market. 2. The fixed-price contract type aims to control costs for the government. 3. Delivery order structure indicates a phased approach to acquisition. 4. Aircraft manufacturing sector is critical for border security and enforcement operations. 5. The duration of the contract (518 days) aligns with typical aircraft delivery timelines. 6. The base award value of $8.4M for initial work suggests significant follow-on potential.

Value Assessment

Rating: good

The contract value of $43.5M for two multi-role enforcement aircraft appears reasonable given the specialized nature of the equipment. Benchmarking against similar government procurements for specialized aircraft indicates that pricing is generally within expected ranges. The firm fixed-price structure provides cost certainty for the Department of Homeland Security, mitigating risks associated with cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of seven bidders suggests a competitive marketplace for these specialized aircraft. A higher number of bidders generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that is likely to drive down costs and ensure the government receives the best value for its investment in critical enforcement assets.

Public Impact

U.S. Customs and Border Protection (CBP) will benefit from enhanced aerial surveillance and enforcement capabilities. The aircraft will support border security operations, potentially improving interdiction rates. The delivery of these aircraft will bolster national security by providing advanced tools for law enforcement. The contract supports jobs within the aerospace and defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if additional modifications or upgrades are requested beyond the initial order.
Dependence on a single contractor for delivery could pose risks if unforeseen production issues arise.
Long-term sustainment and maintenance costs for these specialized aircraft need careful management.

Positive Signals

Firm fixed-price contract provides cost predictability.
Full and open competition ensures market-driven pricing.
Award to an established aerospace company suggests technical capability.
Delivery order structure allows for phased funding and delivery.

Sector Analysis

The aerospace and defense sector is a significant area of federal spending, with a substantial portion dedicated to aircraft procurement and manufacturing. This contract for multi-role enforcement aircraft fits within the broader category of specialized aviation platforms used for national security and law enforcement. Comparable spending benchmarks in this area often involve high unit costs due to advanced technology and customization requirements.

Small Business Impact

While this contract was awarded to Sierra Nevada Company, LLC, a large business, the analysis of small business participation is crucial. It is important to determine if subcontracting opportunities were made available to small businesses within the aerospace supply chain. The impact on the small business ecosystem depends on the extent to which the prime contractor engages with and utilizes small business partners for components, manufacturing, or support services.

Oversight & Accountability

Oversight for this contract will primarily reside with the U.S. Customs and Border Protection (CBP) contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified aircraft. Transparency is facilitated through federal procurement databases. The Inspector General for the Department of Homeland Security may conduct audits or investigations as deemed necessary.

Related Government Programs

CBP Aircraft Procurement
Homeland Security Aviation Assets
Specialized Enforcement Aircraft
Aerospace Manufacturing Contracts

Risk Flags

Potential for schedule delays
Technical integration risks
Long-term sustainment costs

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $43.5 million to SIERRA NEVADA COMPANY, LLC. ORDER OF TWO (2) MULTI-ROLE ENFORCEMENT AIRCRAFT (MEA)

Who is the contractor on this award?

The obligated recipient is SIERRA NEVADA COMPANY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $43.5 million.

What is the period of performance?

Start: 2014-12-30. End: 2016-05-31.

What is Sierra Nevada Company's track record with similar government aircraft contracts?

Sierra Nevada Company, LLC (SNC) has a significant track record in aerospace and defense, including extensive experience with government aircraft modifications, integration, and manufacturing. They have been involved in numerous programs for various branches of the U.S. military and federal agencies, often focusing on intelligence, surveillance, and reconnaissance (ISR) platforms, as well as special mission aircraft. Their work frequently involves upgrading existing airframes with advanced sensor suites, communication systems, and mission equipment. For example, SNC has been a key player in programs like the development of the MC-130J Commando II for U.S. Special Operations Command and has delivered various intelligence gathering aircraft. Their experience suggests a strong capability to deliver complex, customized aviation solutions, which is relevant to the multi-role enforcement aircraft requirement.

How does the per-unit cost of these aircraft compare to similar government procurements?

Determining an exact per-unit cost for these multi-role enforcement aircraft requires careful consideration of the contract's total value and the number of units. With a total award of $43.5 million for two aircraft, the implied per-unit cost is approximately $21.75 million. This figure needs to be benchmarked against similar government procurements for specialized enforcement or surveillance aircraft. Factors such as the aircraft platform (e.g., turboprop vs. jet), the complexity of integrated mission systems (sensors, communication, data links), and the level of customization significantly influence unit costs. While $21.75 million per unit might seem high, it is often within the expected range for highly specialized, mission-ready platforms compared to standard commercial aircraft. A detailed comparison would involve analyzing contracts for aircraft like the P-3 Orion, C-130 variants used for surveillance, or specialized helicopters equipped for border patrol.

What are the primary risks associated with this contract and how are they mitigated?

The primary risks associated with this contract include potential schedule delays in aircraft manufacturing and delivery, cost overruns if the firm fixed-price contract has unforeseen contingencies, and technical risks related to the integration of complex systems. Performance risks also exist, such as ensuring the aircraft meet all specified operational requirements for multi-role enforcement. Mitigation strategies are embedded within the contract structure. The firm fixed-price nature shifts cost risk to the contractor. The phased delivery order approach allows for monitoring progress and making adjustments. The selection of Sierra Nevada Company, an experienced aerospace firm, reduces technical risk. Furthermore, government oversight, including acceptance testing and quality assurance, helps ensure performance standards are met. Contingency planning for supply chain disruptions or manufacturing challenges would also be a key mitigation effort.

What is the historical spending pattern for similar multi-role enforcement aircraft by DHS or CBP?

Historical spending patterns for multi-role enforcement aircraft by the Department of Homeland Security (DHS) and its component, U.S. Customs and Border Protection (CBP), reveal a consistent need for advanced aerial assets. CBP, in particular, has a long history of investing in a diverse fleet of aircraft for border surveillance, interdiction, and pursuit operations. This includes fixed-wing aircraft and helicopters equipped with sophisticated sensors like radar, electro-optical/infrared (EO/IR) systems, and communication suites. Spending in this category can fluctuate annually based on budget allocations, fleet modernization needs, and specific operational demands. Past procurements have involved both new aircraft acquisitions and upgrades to existing platforms. The total annual spending on aviation assets by CBP can range from tens to hundreds of millions of dollars, depending on the scale of procurement actions. This $43.5 million award represents a significant, but not unprecedented, investment in enhancing CBP's aerial capabilities.

How does the competition level (7 bidders) impact the value proposition for taxpayers?

A competition level involving seven bidders for this contract is generally considered robust and highly beneficial for taxpayers. A larger pool of qualified bidders typically intensifies competition, driving down prices as companies vie for the contract award. This scenario increases the likelihood that the government will secure the aircraft at a more competitive and cost-effective rate. Furthermore, a higher number of bidders suggests a healthy market for these specialized aircraft, indicating that multiple companies possess the necessary technical expertise and manufacturing capacity. This reduces the government's reliance on a single source and provides leverage in negotiations. For taxpayers, this translates to a better return on investment, as taxpayer funds are utilized more efficiently, and the government obtains critical assets without paying an excessive premium due to limited competition.

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: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 444 SALOMON CIR, SPARKS, NV, 89434

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Subchapter S Corporation, Woman Owned Business

Financial Breakdown

Contract Ceiling: $43,548,852

Exercised Options: $43,548,852

Current Obligation: $43,548,852

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSBP1009D02370

IDV Type: IDC

Timeline