Navy awards $46.5M for VH helicopter sustainment, with SIKORSKY AIRCRAFT CORPORATION as the sole provider

Contract Overview

Contract Amount: $46,525,181 ($46.5M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-12-01

End Date: 2025-11-30

Contract Duration: 364 days

Daily Burn Rate: $127.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: VH SUSTAINMENT SUPPORT FY25 PMA-274

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $46.5 million to SIKORSKY AIRCRAFT CORPORATION for work described as: VH SUSTAINMENT SUPPORT FY25 PMA-274 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Focus on sustainment suggests ongoing operational needs for VH helicopters. 3. Fixed-price contract type aims to control costs, but sole-source nature may inflate pricing. 4. Performance period aligns with a full fiscal year, indicating a need for continuous support. 5. The contract is for aircraft manufacturing support, a critical component of defense readiness. 6. Geographic location in Connecticut may indicate a concentration of specialized aerospace labor.

Value Assessment

Rating: fair

The contract value of $46.5 million for one year of sustainment support for VH helicopters appears to be within a reasonable range for specialized aerospace services. However, without comparable sole-source contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging. The firm fixed-price structure is a positive indicator for cost control, but the lack of competition inherently limits the government's ability to secure the lowest possible price.

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 when only one source is capable of meeting the requirement. The absence of competition means that the government did not benefit from a competitive bidding process, which could lead to higher prices than if multiple vendors had vied for the contract.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the most competitive pricing. Without a competitive environment, there is less pressure on the contractor to offer cost savings.

Public Impact

The primary beneficiaries are the Department of the Navy, ensuring the operational readiness of its VH helicopter fleet. Services delivered include sustainment support, likely encompassing maintenance, repair, and parts for the aircraft. The geographic impact is concentrated in Connecticut, where SIKORSKY AIRCRAFT CORPORATION is based, potentially supporting local jobs and the aerospace industry. Workforce implications include the need for skilled technicians and engineers specializing in helicopter maintenance and manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of competition may reduce incentives for contractor innovation and efficiency.
Dependence on a single contractor for critical sustainment creates a potential single point of failure.
The contract is for aircraft manufacturing support, which can be complex and prone to cost overruns if not managed tightly.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Sustainment support is crucial for maintaining the operational readiness of vital defense assets.
The contractor, SIKORSKY AIRCRAFT CORPORATION, is a well-established entity in the aerospace industry with likely relevant expertise.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for aircraft sustainment are a substantial part of this market, ensuring the continued operational capability of military fleets. Spending in this area is often driven by national security requirements and can involve specialized, proprietary technologies, leading to sole-source awards when only one entity possesses the necessary expertise or intellectual property. Benchmarks for similar sustainment contracts vary widely based on aircraft type, age, and complexity.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb: false'. Furthermore, the prime contractor is SIKORSKY AIRCRAFT CORPORATION, a large business. There is no explicit information regarding subcontracting plans for small businesses within this award. The absence of a set-aside and the large prime contractor suggest limited direct opportunities for small businesses through this specific contract, though they may be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed cost breakdowns for sole-source awards are often not publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VH Helicopter Fleet Maintenance
Naval Aviation Sustainment Programs
Defense Contract Management Agency (DCMA) Oversight
Aerospace Manufacturing Support Contracts

Risk Flags

Sole-source award
Potential for price escalation due to lack of competition
Dependence on a single supplier for critical sustainment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.5 million to SIKORSKY AIRCRAFT CORPORATION. VH SUSTAINMENT SUPPORT FY25 PMA-274

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 $46.5 million.

What is the period of performance?

Start: 2024-12-01. End: 2025-11-30.

What is the historical spending trend for VH helicopter sustainment support by the Department of the Navy?

Analyzing historical spending for VH helicopter sustainment requires access to detailed contract databases over multiple fiscal years. Typically, sustainment costs for complex aircraft like helicopters can fluctuate based on operational tempo, component life cycles, and the availability of spare parts. A trend analysis would involve aggregating all contracts related to VH sustainment, including maintenance, repair, overhaul, and parts, to identify patterns in annual spending. Without specific historical data for this contract vehicle or similar ones, it's difficult to establish a precise trend. However, it is common for sustainment costs to increase as aircraft age, necessitating more frequent and extensive maintenance.

How does the pricing of this sole-source contract compare to potentially competitive bids for similar helicopter sustainment services?

Directly comparing the pricing of this sole-source contract to competitive bids is challenging due to the inherent nature of sole-source awards. Competitive bidding processes typically drive prices down as multiple vendors vie for the contract, offering their best terms. In a sole-source scenario, the government relies on negotiation and the contractor's proposed pricing, which may not reflect the lowest possible market rate. To assess value, one would ideally benchmark against similar contracts awarded competitively for comparable helicopter types and sustainment scopes. If such benchmarks show significantly higher pricing for this contract, it would indicate a potential lack of value for money due to the absence of competition.

What are the specific risks associated with relying on a single contractor for critical VH helicopter sustainment?

The primary risk of relying on a single contractor, SIKORSKY AIRCRAFT CORPORATION in this case, for critical VH helicopter sustainment is the potential for supply chain disruptions or performance issues. If the contractor experiences financial difficulties, labor strikes, or production problems, it could directly impact the Navy's ability to maintain its fleet, potentially grounding aircraft and affecting operational readiness. Furthermore, the lack of competition can lead to price escalation over time, as the contractor may have less incentive to control costs. There's also a risk of knowledge loss if the contractor's specialized expertise is not adequately transferred or documented, making future transitions difficult.

What performance metrics or key performance indicators (KPIs) are likely included in this contract to ensure effective sustainment?

While specific performance metrics are not detailed in the provided data, typical KPIs for aircraft sustainment contracts include metrics related to aircraft availability rates, turnaround time for repairs, quality of maintenance performed (e.g., defect rates), and on-time delivery of parts and services. For a firm fixed-price contract, the contractor is incentivized to meet these performance standards to avoid penalties or ensure future contract awards. The Department of the Navy would likely have established baseline performance requirements and monitoring procedures to track the contractor's adherence to these standards throughout the contract period.

What is the track record of SIKORSKY AIRCRAFT CORPORATION in fulfilling similar defense sustainment contracts?

SIKORSKY AIRCRAFT CORPORATION, a subsidiary of Lockheed Martin, has a long and extensive track record in the defense aerospace industry, particularly with rotorcraft. They are known for manufacturing and supporting various helicopter platforms for military branches, including the U.S. Navy. Their history includes fulfilling numerous sustainment, maintenance, and upgrade contracts for complex aircraft. While specific performance details for every contract are not publicly available, their continued role as a prime contractor for major defense programs suggests a generally positive track record in delivering complex aviation services and products to the U.S. military.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001922R0040

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 6900 MAIN ST, STRATFORD, CT, 06614

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

Financial Breakdown

Contract Ceiling: $54,934,651

Exercised Options: $54,934,651

Current Obligation: $46,525,181

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $215,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001923D0011

IDV Type: IDC

Timeline