Navy awards $147.6M contract for aircraft manufacturing, with SIKORSKY AIRCRAFT CORPORATION as the sole provider

Contract Overview

Contract Amount: $147,587,167 ($147.6M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2003-05-02

End Date: 2011-12-31

Contract Duration: 3,165 days

Daily Burn Rate: $46.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $147.6 million to SIKORSKY AIRCRAFT CORPORATION for work described as: Key points: 1. The contract's value of $147.6 million represents a significant investment in aircraft manufacturing capabilities. 2. Sole-source procurement raises questions about potential price inflation and limited market engagement. 3. The extended duration of 3165 days suggests a long-term need for these specialized aircraft. 4. Performance context is limited without specific delivery schedules or key performance indicators. 5. This contract falls within the broader Defense sector, specifically supporting naval aviation. 6. The absence of small business involvement warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The $147.6 million award over 3165 days suggests an average annual spend of approximately $18.7 million. Without comparable contracts or market data, it's difficult to definitively assess if this represents good value for money. The fixed-price incentive structure aims to control costs, but the absence of competition limits the government's leverage in price negotiations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, SIKORSKY AIRCRAFT CORPORATION, was considered. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may have paid a premium for this aircraft due to the absence of competitive pressure. The sole-source nature limits opportunities for cost savings that could have been achieved through a more open bidding process.

Public Impact

The primary beneficiaries are the Department of the Navy, which receives critical aircraft manufacturing services. The contract ensures the continued availability and maintenance of specialized naval aircraft. The geographic impact is concentrated in Connecticut, where SIKORSKY AIRCRAFT CORPORATION is located, potentially supporting local employment and the regional aerospace industry. Workforce implications include the direct employment of skilled labor at the contractor's facility and potentially in the supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement limits competitive pricing and may result in higher costs for taxpayers.
Lack of transparency in the procurement process due to single-bidder consideration.
Potential for cost overruns if not adequately managed, despite fixed-price incentive structure.
Limited opportunities for small businesses to participate in this significant contract.

Positive Signals

Ensures specialized aircraft manufacturing capability for the Department of the Navy.
Long-term contract duration provides stability for production and support.
Fixed-price incentive contract type aims to align contractor and government interests on cost and performance.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical component of the broader aerospace and defense industry. The market is characterized by high barriers to entry, significant R&D investment, and a limited number of major players capable of producing complex military aircraft. The Department of Defense is a primary customer for such specialized manufacturing. Comparable spending benchmarks would typically involve other large-scale military aircraft procurement contracts, which often run into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb: false'. Furthermore, the 'ss' flag is also false, suggesting no specific small business subcontracting goals were mandated. This means that opportunities for small businesses to participate as subcontractors are not explicitly guaranteed or tracked within this award. The absence of small business involvement could limit the broader economic impact on the small business ecosystem within the aerospace supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The fixed-price incentive contract type includes mechanisms for monitoring performance and costs against established targets. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially public disclosure under FOIA, depending on classification.

Related Government Programs

Naval Aviation Procurement
Military Aircraft Manufacturing
Defense Contracts
Aerospace Industry Spending

Risk Flags

Sole-source procurement
Lack of competition
Potential for cost overruns
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $147.6 million to SIKORSKY AIRCRAFT CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is SIKORSKY AIRCRAFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $147.6 million.

What is the period of performance?

Start: 2003-05-02. End: 2011-12-31.

What is the specific type of aircraft being manufactured under this contract?

The provided data does not specify the exact type of aircraft being manufactured. However, the North American Industry Classification System (NAICS) code '336411' indicates 'Aircraft Manufacturing.' Given the contracting agency is the Department of the Navy and the contractor is SIKORSKY AIRCRAFT CORPORATION, it is highly probable that this contract pertains to military helicopters or specialized fixed-wing aircraft integral to naval operations. Sikorsky is renowned for its helicopter production, including models used for transport, combat, and search and rescue missions by various military branches.

How does the $147.6 million contract value compare to typical spending on similar aircraft by the Navy?

Comparing the $147.6 million contract value to typical Navy spending on similar aircraft is difficult without knowing the specific aircraft type and its complexity. However, for sole-source procurements of specialized military assets, this figure represents a substantial investment. Large military aircraft programs, especially those involving unique capabilities or limited production runs, can easily reach these figures. For context, major new aircraft programs often involve development and production costs in the billions. This $147.6 million award, spread over 3165 days (over 8 years), suggests a steady, long-term procurement or sustainment effort rather than a one-off purchase of a new platform.

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

The primary risks associated with a sole-source contract of this magnitude include a lack of price competition, which can lead to inflated costs for the government and taxpayers. There's also a reduced incentive for the contractor to innovate or improve efficiency beyond the contract's minimum requirements, as there's no competitive pressure. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process. Dependence on a single supplier can also create supply chain risks if the contractor faces production issues, financial instability, or geopolitical challenges. Finally, the government may have less leverage in negotiating terms and conditions compared to a competitive scenario.

What does the 'Fixed Price Incentive' (FPI) contract type imply for cost control and performance?

A Fixed Price Incentive (FPI) contract type aims to provide a middle ground between fixed-price and cost-reimbursement contracts. It establishes a target cost, a target profit, and a price ceiling. The final price is determined by the actual cost incurred, with the government and contractor sharing the variances from the target cost. If the final cost is below the target, both parties share in the savings (often through a formula that adjusts profit). If the final cost exceeds the target but remains below the ceiling, the contractor absorbs a larger portion of the overrun. If the final cost exceeds the ceiling, the contractor is responsible for the entire amount above the ceiling. This structure incentivizes the contractor to control costs and meet performance targets to maximize their profit, while also providing the government with a ceiling on its liability.

What is SIKORSKY AIRCRAFT CORPORATION's track record with the Department of Defense?

SIKORSKY AIRCRAFT CORPORATION, now a subsidiary of Lockheed Martin, has a long and extensive track record with the Department of Defense, particularly the Department of the Navy. They are a major manufacturer of military helicopters, including iconic platforms like the UH-60 Black Hawk (used by Army and other branches), the MH-60 Seahawk (used by the Navy for various missions), and historically, the CH-53 Sea Stallion/Super Stallion heavy-lift helicopters. Their history with the DoD spans decades, involving numerous contracts for new aircraft production, upgrades, sustainment, and spare parts. Their established presence and specialized capabilities make them a frequent, and often sole-source, provider for specific naval aviation requirements.

How has federal spending on aircraft manufacturing evolved, and where does this contract fit?

Federal spending on aircraft manufacturing, particularly within the defense sector, has historically been substantial, fluctuating with geopolitical events, technological advancements, and defense budget priorities. The Department of Defense is consistently one of the largest purchasers of aircraft. Spending often concentrates on major platform procurements (fighters, bombers, helicopters, transport aircraft), upgrades to existing fleets, and sustainment/maintenance services. This $147.6 million contract for SIKORSKY AIRCRAFT CORPORATION fits within the ongoing sustainment or production of specialized naval aircraft. While not a headline-grabbing new program launch, it represents a significant, long-term commitment to maintaining and potentially expanding the Navy's rotary-wing or specialized aircraft capabilities, reflecting a consistent pattern of defense spending on essential aviation assets.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 6900 MAIN STREET, STRATFORD, CT, 03

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline