DoD's $6.1B Sikorsky Contract for Aircraft Manufacturing: A Cost Plus Fixed Fee Award

Contract Overview

Contract Amount: $6,103,285,532 ($6.1B)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2006-01-03

End Date: 2026-06-30

Contract Duration: 7,483 days

Daily Burn Rate: $815.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $6.10 billion to SIKORSKY AIRCRAFT CORPORATION for work described as: Key points: 1. The contract value is substantial at over $6.1 billion. 2. Sikorsky Aircraft Corporation is the sole awardee, indicating a lack of competition. 3. The contract type (Cost Plus Fixed Fee) can pose risks for cost overruns. 4. The sector is Aircraft Manufacturing, a critical defense industry.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type, while allowing for flexibility, often leads to higher costs compared to fixed-price contracts. Without competitive bidding, it's difficult to benchmark pricing effectively against similar contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition and the contract type suggest a higher potential taxpayer burden due to the absence of market-driven price reductions.

Public Impact

Taxpayers may be paying a premium due to the sole-source nature of this large contract. The extended duration (2006-2026) means sustained financial commitment. Dependence on a single contractor for critical aircraft manufacturing raises supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration

Positive Signals

Award to established manufacturer
Definitive contract type provides stability

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, which is a significant part of the defense industrial base. Spending in this sector is often driven by national security needs and technological advancements.

Small Business Impact

The data indicates this contract was not awarded to small businesses. The focus appears to be on large, established prime contractors within the defense industry.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential cost escalations. Regular performance reviews and audits are crucial.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Long contract duration
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.10 billion 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 $6.10 billion.

What is the period of performance?

Start: 2006-01-03. End: 2026-06-30.

What is the justification for the sole-source award, and have alternatives been explored?

The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies typically cite reasons such as unique capabilities, urgent needs, or lack of viable alternatives. Without this information, it's difficult to assess if the government received the best possible value and if taxpayer funds were used efficiently.

How are cost overruns managed and mitigated under this Cost Plus Fixed Fee contract?

Cost Plus Fixed Fee contracts carry inherent risks of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. Effective management requires stringent cost controls, detailed auditing of expenses, and clear performance metrics. The government must actively monitor spending and enforce contract terms to prevent excessive costs.

What is the long-term strategy for ensuring competitive sourcing for future aircraft manufacturing needs?

A long-term strategy should involve market research to identify potential new entrants and foster competition. This could include breaking down large contracts into smaller lots, investing in research and development for alternative technologies, and setting clear requirements that encourage innovation from a wider range of suppliers.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D 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: Lockheed Martin Corp

Address: 6900 MAIN STREET, STRATFORD, CT, 06615

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $2,504,346,576

Exercised Options: $2,504,346,576

Current Obligation: $6,103,285,532

Actual Outlays: $202,492,478

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline