DoD's $17.7M contract for common chassis systems awarded to Sierra Nevada Company, LLC

Contract Overview

Contract Amount: $17,672,204 ($17.7M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2025-01-01

End Date: 2027-12-31

Contract Duration: 1,094 days

Daily Burn Rate: $16.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY25 MISD SNC COMMON CHASSIS

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to SIERRA NEVADA COMPANY, LLC for work described as: FY25 MISD SNC COMMON CHASSIS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Fixed-price contract type suggests cost overruns are borne by the contractor. 3. Long duration of 1094 days indicates a significant, ongoing need. 4. The contract falls under the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing NAICS code. 5. Awarded by the Department of the Navy, indicating a specific military application. 6. No small business set-aside was applied to this procurement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed cost breakdowns or comparisons to similar sole-source awards for specialized chassis systems. The fixed-price nature is a positive indicator for cost control, but the lack of competition means taxpayers may not be receiving the most advantageous pricing. Further analysis would require understanding the unique specifications and market availability of such systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Sierra Nevada Company, LLC, was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and fosters innovation. The justification for a sole-source award would need to be robust, likely citing unique capabilities or proprietary technology held by the contractor.

Taxpayer Impact: Sole-source awards generally result in higher costs for taxpayers compared to competitively bid contracts, as the government lacks leverage to negotiate the best possible price.

Public Impact

The Department of the Navy benefits from the acquisition of essential common chassis systems for its operations. These systems are critical for supporting various defense applications, ensuring operational readiness. The contract supports the defense industrial base, specifically within the specialized manufacturing sector. Workforce implications are likely within Sierra Nevada Company's facilities, contributing to skilled labor employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency in government spending.
Dependence on a single contractor for critical components can pose supply chain risks.

Positive Signals

Fixed-price contract type shifts cost risk to the contractor.
Long-term award provides stability for the contractor and ensures supply continuity.
Award to an established company like Sierra Nevada Company suggests a focus on reliability and proven performance.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on specialized systems and components. The NAICS code 334511 covers a niche market for advanced navigation and guidance instruments. Spending in this sector is often characterized by high R&D costs, long development cycles, and significant government investment due to national security requirements. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for highly specialized defense hardware.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award, it was not open to competition from small businesses. There is no indication of subcontracting requirements for small businesses within the provided data, suggesting limited direct impact on the small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified goods. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Systems
Defense Logistics
Aerospace Manufacturing
Navigation Systems
Guidance Systems

Risk Flags

Sole-source award lacks competitive pricing pressure.
Limited public information on specific technical requirements.
Potential for contractor lock-in due to specialized nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to SIERRA NEVADA COMPANY, LLC. FY25 MISD SNC COMMON CHASSIS

Who is the contractor on this award?

The obligated recipient is SIERRA NEVADA COMPANY, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.7 million.

What is the period of performance?

Start: 2025-01-01. End: 2027-12-31.

What is the specific function and technical requirement for the 'common chassis systems' being procured?

The 'common chassis systems' procured under this contract are likely foundational structural components designed to house and integrate various electronic, mechanical, and operational systems for naval platforms. While the exact technical specifications are not detailed in the provided data, the NAICS code (334511 - Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing) suggests these chassis are intended for use with sophisticated equipment related to sensing, positioning, and operational control. They would need to meet stringent military-grade requirements for durability, environmental resistance (e.g., shock, vibration, temperature), and electromagnetic compatibility, serving as a standardized base for different mission-specific payloads or subsystems within the Department of the Navy.

What is the justification for awarding this contract on a sole-source basis to Sierra Nevada Company, LLC?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the lack of adequate competition within the market. For Sierra Nevada Company, LLC, this could be due to possessing specific intellectual property, specialized manufacturing processes, or having developed a system that is uniquely integrated with existing naval platforms, making it difficult or prohibitively expensive for other vendors to replicate or substitute. The Department of the Navy would have had to formally document and approve this justification, likely citing factors such as essential unique capabilities, compatibility requirements, or the need for continuity of supply from a proven source to ensure mission effectiveness and avoid unacceptable delays or costs.

How does the fixed-price contract type mitigate risk for the government in this sole-source award?

The firm fixed-price (FFP) contract type is a significant risk mitigation tool for the government, especially in a sole-source scenario. Under an FFP contract, Sierra Nevada Company, LLC is obligated to deliver the specified common chassis systems at the agreed-upon price, regardless of their actual costs incurred. This places the financial risk of cost overruns squarely on the contractor. For the government, this provides cost certainty and predictability, preventing unexpected increases in expenditure. While the initial price might be higher due to the lack of competition, the FFP structure ensures that the government's budgetary exposure is capped at the awarded amount, protecting taxpayer funds from escalating costs associated with contractor inefficiencies or unforeseen expenses.

What is the historical spending pattern for similar common chassis systems by the Department of the Navy?

Historical spending patterns for 'common chassis systems' by the Department of the Navy are not explicitly detailed in the provided data. However, given the nature of defense procurement, it is probable that the Navy has engaged in multiple contracts for similar foundational hardware over the years, potentially with different specifications or for different platforms. Awards for such systems can range from small, specialized orders to large, multi-year programs. The decision to award this $17.7 million contract to Sierra Nevada Company, LLC, on a sole-source basis suggests either a new requirement for a specific type of chassis or a continuation/consolidation of a previous relationship where their solution was deemed most suitable. Analyzing past sole-source justifications and contract values for comparable systems would provide further context on pricing and necessity.

What are the potential implications of a 3-year contract duration (January 2025 - December 2027) for system sustainment and future upgrades?

A 3-year duration for this contract (1094 days) provides a defined period for the delivery and integration of the common chassis systems. For sustainment, this duration implies that the contractor is responsible for ensuring the systems function as specified throughout this period. It also sets a timeline for potential future upgrades or modifications; if significant technological advancements occur during this period, the Navy might need to initiate new procurement actions or contract modifications to incorporate them. The end of this contract period will likely trigger a review of the system's performance, potential needs for further development, or a re-evaluation of the procurement strategy, possibly opening the door for competition if market conditions or requirements have evolved.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Nevada Corporation

Address: 444 SALOMON CIR, SPARKS, NV, 89434

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $17,672,204

Exercised Options: $17,672,204

Current Obligation: $17,672,204

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $14,661,190

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001923D0012

IDV Type: IDC

Timeline