Sikorsky Aircraft Corporation awarded $835.5M for OH-58 Kiowa helicopter structural component maintenance and repair

Contract Overview

Contract Amount: $140,951,064 ($141.0M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2003-03-05

End Date: 2013-05-31

Contract Duration: 3,740 days

Daily Burn Rate: $37.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200306!000001!1700!AC528 !NAVAL AIR SYSTEMS COMMAND !N0001903C0006 !A!N! !Y!P00001 !20030305!20040304!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74260!001!09!STRATFORD !FAIRFIELD !CONN !+000005746507!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !1AHC!OH-58 KIOWA (AHIP) !336411!E! !3! ! !C! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!A!Y!F! ! !N!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 $141.0 million to SIKORSKY AIRCRAFT CORPORATION for work described as: 200306!000001!1700!AC528 !NAVAL AIR SYSTEMS COMMAND !N0001903C0006 !A!N! !Y!P00001 !20030305!20040304!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74260!001!09!STRATFORD !FAIRF… Key points: 1. Contract awarded for essential maintenance and repair of aircraft structural components, ensuring operational readiness. 2. Significant contract value suggests a long-term need for specialized support for the OH-58 Kiowa fleet. 3. Sole-source award raises questions about competition and potential for cost savings through competitive bidding. 4. Contract duration of over 10 years indicates a sustained requirement for these services. 5. The award falls within the broader Defense sector, specifically supporting rotary-wing aircraft maintenance. 6. Focus on structural components highlights the critical nature of airframe integrity for safety and performance.

Value Assessment

Rating: fair

The contract value of $835.5 million over its extended period suggests a substantial investment in maintaining the OH-58 Kiowa fleet. Without comparable sole-source contracts for similar aircraft structural component maintenance, a precise value-for-money assessment is challenging. However, the duration and scale imply a critical need. The firm fixed-price nature provides cost certainty for the government, but the lack of competition may have led to a higher price than a competed contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Sikorsky Aircraft Corporation, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of multiple bidders means there was no price negotiation driven by competitive market forces, which could potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. A sole-source award limits the government's ability to leverage market competition to secure the best possible price and value.

Public Impact

The primary beneficiaries are the U.S. Army units operating the OH-58 Kiowa helicopter, ensuring their aircraft remain airworthy and mission-capable. Services delivered include maintenance and repair of structural components, crucial for the airframe's integrity and flight safety. The geographic impact is likely concentrated around Army aviation bases where OH-58 Kiowa helicopters are stationed and maintained. Workforce implications include specialized technicians and engineers at Sikorsky Aircraft Corporation and potentially at government maintenance facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration could mask inefficiencies if not closely monitored.
Reliance on a single contractor for critical structural repairs may pose supply chain risks.
Potential for cost overruns if scope creep occurs without adequate oversight.

Positive Signals

Sikorsky Aircraft Corporation is the original equipment manufacturer, possessing unique knowledge of the OH-58 Kiowa's structural design.
Firm Fixed Price contract type provides cost certainty for the government.
Contract addresses a critical need for maintaining aging aircraft, ensuring operational readiness.
Long-term nature of the contract suggests a stable, predictable support structure.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft maintenance and repair. The market for specialized helicopter component repair is often dominated by original equipment manufacturers (OEMs) due to proprietary knowledge and technical data. While the OH-58 Kiowa is an older platform, its continued operation necessitates ongoing support, creating a niche but vital market segment. Comparable spending benchmarks for similar sole-source maintenance contracts on legacy aircraft would be necessary for a more precise comparison.

Small Business Impact

This contract does not appear to have a small business set-aside component. As a sole-source award to a large corporation, there are limited direct subcontracting opportunities for small businesses unless Sikorsky proactively includes them in its supply chain. The absence of a set-aside means small businesses did not have a direct avenue to compete for this specific contract, potentially limiting their participation in this segment of defense spending.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management and inspection agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the firm fixed-price structure, requiring Sikorsky to deliver services within the agreed-upon cost. Transparency is limited due to the sole-source nature, but contract performance metrics and financial reporting would be subject to government review. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

OH-58 Kiowa Helicopter Program
Army Aviation Maintenance Contracts
Aircraft Structural Repair Services
Defense Logistics Agency (DLA) Support Contracts
Rotary-Wing Aircraft Support

Risk Flags

Sole-source award
Long contract duration
Critical component maintenance
Legacy aircraft support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $141.0 million to SIKORSKY AIRCRAFT CORPORATION. 200306!000001!1700!AC528 !NAVAL AIR SYSTEMS COMMAND !N0001903C0006 !A!N! !Y!P00001 !20030305!20040304!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74260!001!09!STRATFORD !FAIRFIELD !CONN !+000005746507!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1C!OTHER AIRCRAFT EQUIPMENT !1AHC!OH-58 KIOWA (AHIP) !336411!E! !3! ! !C! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is SIKORSKY AIRCRAFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $141.0 million.

What is the period of performance?

Start: 2003-03-05. End: 2013-05-31.

What is Sikorsky Aircraft Corporation's track record with similar sole-source maintenance contracts for military aircraft?

Sikorsky Aircraft Corporation, as a major defense contractor and OEM, has a long history of performing maintenance, repair, and overhaul (MRO) services for various military aircraft platforms, including helicopters. They have likely held numerous sole-source contracts for specialized support, particularly for legacy aircraft where they possess unique technical expertise and access to proprietary data. Analyzing past sole-source awards to Sikorsky for similar services, such as structural repairs or component overhauls on other helicopter types (e.g., Black Hawk, Seahawk), would provide context. This would involve examining contract values, durations, performance history, and any associated cost variances or disputes to assess their reliability and efficiency in fulfilling such critical, non-competitive agreements.

How does the value of this contract compare to the overall spending on the OH-58 Kiowa program throughout its lifecycle?

The $835.5 million awarded to Sikorsky represents a significant portion of the total lifecycle cost for maintaining the OH-58 Kiowa fleet, particularly for structural component repair. To contextualize this, one would need to compare it against the total acquisition cost of the OH-58 Kiowa fleet, the operational and support costs incurred annually, and the planned retirement or replacement schedule of the aircraft. If the OH-58 Kiowa program has been extensive, with thousands of aircraft procured and operated over decades, this maintenance contract value might represent a reasonable percentage for specialized structural support. Conversely, if the fleet size was smaller or nearing obsolescence, this value could appear disproportionately high, warranting closer scrutiny of the necessity and pricing.

What are the specific risks associated with a sole-source award for critical aircraft structural components?

The primary risk of a sole-source award for critical aircraft structural components is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government cannot be assured it is receiving the best possible price. Another significant risk is reduced innovation; the sole provider may have less incentive to invest in process improvements or cost-saving technologies. Furthermore, there's a dependency risk: if the sole contractor faces production issues, financial instability, or decides to exit the market, the government could face severe disruptions in maintaining its aircraft fleet. This reliance also limits the government's leverage in negotiating terms or addressing performance deficiencies.

What is the historical spending trend for aircraft structural component maintenance within the Department of Defense?

Historical spending on aircraft structural component maintenance within the Department of Defense (DoD) generally follows trends related to the size and age of the active aircraft inventory. As aircraft fleets age, the need for structural repairs and component overhauls typically increases, leading to higher maintenance expenditures. Spending can fluctuate based on modernization programs, aircraft retirements, and operational tempo. For specific platforms like the OH-58 Kiowa, spending would have been concentrated during its peak operational years and likely continued at a reduced, but critical, level as the fleet aged. Analyzing aggregate DoD spending data for aircraft MRO services, particularly for legacy helicopter fleets, would reveal overall trends and allow for comparison of this contract's value against broader historical patterns.

Are there any indications of cost overruns or performance issues in previous contracts with Sikorsky for similar services?

Assessing potential cost overruns or performance issues in previous contracts with Sikorsky for similar services requires access to detailed contract performance data, such as contract modification history, audit reports, and performance reviews. Publicly available data might indicate trends in contract modifications (e.g., frequent change orders suggesting scope creep or poor initial planning) or contract close-out data that reveals final costs versus initial awards. Reports from government oversight bodies like the Government Accountability Office (GAO) or the DoD Inspector General (IG) could also highlight specific issues. Without direct access to this granular performance history for Sikorsky's sole-source maintenance contracts, it is difficult to definitively assess the risk of overruns or performance failures for this particular award.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 6900 MAIN ST, STRATFORD, CT, 03

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline