DoD's $34.1M Sikorsky Aircraft contract for installations and training support awarded without competition

Contract Overview

Contract Amount: $34,128,124 ($34.1M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2007-07-18

End Date: 2015-08-31

Contract Duration: 2,966 days

Daily Burn Rate: $11.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FY07 INSTALLATIONS AND TRAINING SUPPORT WITH OPTIONS FOR 2 MORE INSTALLATIONS AND LOGISTICS.

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $34.1 million to SIKORSKY AIRCRAFT CORPORATION for work described as: FY07 INSTALLATIONS AND TRAINING SUPPORT WITH OPTIONS FOR 2 MORE INSTALLATIONS AND LOGISTICS. Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, potentially leading to higher costs than fixed-price contracts. 2. Lack of competition raises concerns about price discovery and potential overpayment. 3. Contract duration of nearly 8 years suggests a long-term need for these services. 4. The contract's value, while significant, needs to be benchmarked against similar support services. 5. Sikorsky Aircraft Corporation, a major defense contractor, is the sole awardee. 6. The contract was awarded by the Defense Contract Management Agency, indicating a focus on oversight.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a definitive value assessment difficult without further benchmarking. While the total award value is $34.1 million, the absence of competitive bids prevents a clear comparison to market rates or alternative offerings. The long duration of the contract (nearly 8 years) suggests significant investment, but the value proposition is weakened by the non-competitive award. Further analysis would require comparing the per-unit costs of installations and training to industry standards or similar government 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 open competition. This typically occurs when only one vendor possesses the unique capabilities or technology required, or in cases of urgent need. The lack of bidders means that the government did not benefit from the price reductions and innovation that typically arise from a competitive bidding process. This can lead to higher prices for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no opportunity for multiple companies to bid and drive down costs through competition.

Public Impact

The primary beneficiaries are the Department of Defense personnel who receive installations and training support. The services delivered are critical for the operational readiness and effectiveness of military equipment. The geographic impact is likely concentrated within areas where Sikorsky aircraft are deployed or maintained. Workforce implications include potential employment opportunities at Sikorsky and its subcontractors for specialized roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize cost overruns.
Long contract duration without re-competition limits future cost-saving opportunities.

Positive Signals

Sikorsky Aircraft Corporation is a well-established entity with a track record in aviation.
The contract addresses a specific need for installations and training support, indicating a clear requirement.
The Defense Contract Management Agency's involvement suggests a level of oversight is in place.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Contracts for aircraft parts and auxiliary equipment manufacturing, like this one, are crucial for maintaining military readiness. The market is dominated by a few large, established players. Benchmarking this contract's value would involve comparing its cost structure and deliverables to other long-term support and training contracts within the defense aviation industry.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. This means that opportunities for small businesses to participate in this contract may be limited, potentially impacting the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

The Defense Contract Management Agency (DCMA) is responsible for overseeing defense contracts, ensuring compliance with terms and conditions, and monitoring performance. While specific oversight mechanisms for this contract are not detailed, DCMA's general role includes auditing costs, verifying deliverables, and managing contract modifications. Transparency would be enhanced by public reporting on performance metrics and cost breakdowns.

Related Government Programs

Aircraft Maintenance and Repair Services
Defense Training and Simulation
Aerospace Manufacturing Support
Logistics and Supply Chain Management (Defense)

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration without re-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.1 million to SIKORSKY AIRCRAFT CORPORATION. FY07 INSTALLATIONS AND TRAINING SUPPORT WITH OPTIONS FOR 2 MORE INSTALLATIONS AND LOGISTICS.

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 $34.1 million.

What is the period of performance?

Start: 2007-07-18. End: 2015-08-31.

What is Sikorsky Aircraft Corporation's track record with similar government contracts?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long and extensive history of providing aircraft, components, and support services to the U.S. military and other government agencies. They are known for their rotorcraft, including the Black Hawk and Seahawk families. Their track record with government contracts is generally robust, often involving large, complex, and long-term agreements for development, production, and sustainment. However, like many large defense contractors, they have also faced scrutiny regarding contract costs, performance, and delivery schedules on specific programs. A detailed review of their past performance on similar installations and training support contracts would be necessary to fully assess their reliability and cost-effectiveness in this specific instance.

How does the cost-plus-fixed-fee (CPFF) pricing structure compare to other contract types for this type of service?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty in the costs involved, such as in research and development or complex system integration. In a CPFF contract, the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government, as the final price can fluctuate based on actual costs incurred. While it can incentivize contractors to perform work that might otherwise be too risky under a fixed-price arrangement, it also places a greater burden on government oversight to ensure costs are reasonable and necessary. For installations and training support, fixed-price or cost-plus-incentive-fee contracts might offer better value if performance metrics and scope can be clearly defined.

What are the primary risks associated with a sole-source award for defense installations and training?

The primary risks associated with a sole-source award for defense installations and training are related to cost and performance. Without competition, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher expenditures for the government. Furthermore, the lack of alternative providers can reduce the government's leverage if the contractor fails to meet performance expectations or delivery schedules. This can result in delays, cost overruns, and a diminished operational capability. Additionally, sole-source awards can stifle innovation by preventing new or smaller companies from entering the market and offering potentially more efficient or advanced solutions.

What is the historical spending pattern for installations and training support within the Department of Defense?

Historical spending patterns for installations and training support within the Department of Defense are substantial and vary significantly year-to-year based on new acquisitions, modernization programs, and operational tempo. The DoD consistently allocates billions of dollars annually towards sustainment, logistics, and training across all branches. This includes contracts for contractor logistics support, field service representatives, technical training, and simulation services. Spending in this category is often driven by the introduction of new platforms, upgrades to existing systems, and the need to maintain readiness in diverse operational environments. Analyzing specific historical spending for Sikorsky-related platforms or similar aircraft support would provide a more granular understanding of trends and cost benchmarks.

How does the contract's duration of nearly 8 years impact its overall value and risk?

A contract duration of nearly 8 years for installations and training support can have a dual impact on its overall value and risk. On the positive side, a long duration provides stability and continuity for essential services, allowing the contractor to develop specialized expertise and potentially achieve economies of scale. This can lead to more efficient operations and predictable support for the end-users. However, a long, non-competitively awarded contract also carries significant risks. It locks the government into a specific provider for an extended period, limiting opportunities to renegotiate terms, benefit from market price reductions, or switch to potentially better or more cost-effective solutions that may emerge over time. The risk of contractor underperformance or cost escalation is also present for the entire duration, without the natural check of periodic re-competition.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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 (UEI: 834951691)

Address: 6900 MAIN ST, STRATFORD, CT, 06614

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $34,128,124

Exercised Options: $34,128,124

Current Obligation: $34,128,124

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline