DoD's $15.8M contract for common chassis awarded to Sierra Nevada Company, LLC, raises questions about competition

Contract Overview

Contract Amount: $15,782,536 ($15.8M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2025-12-03

End Date: 2027-10-03

Contract Duration: 669 days

Daily Burn Rate: $23.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF MISD 10 AND 23 CHANNEL COMMON CHASSIS.

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $15.8 million to SIERRA NEVADA COMPANY, LLC for work described as: PROCUREMENT OF MISD 10 AND 23 CHANNEL COMMON CHASSIS. Key points: 1. The contract value of $15.8 million for common chassis procurement appears to be a significant investment in specialized equipment. 2. The sole-source award suggests a lack of competitive bidding, potentially impacting price discovery and value for money. 3. The duration of the contract (669 days) indicates a medium-term commitment for the delivery of these systems. 4. The absence of small business set-aside flags raises concerns about opportunities for smaller enterprises in this procurement. 5. The procurement falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code, indicating a focus on advanced technological systems.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the 'common chassis' and its intended use. The firm-fixed-price contract type offers some cost certainty for the government. However, the lack of competition means there's no direct comparison to assess if the pricing is competitive or represents the best value. The awarded amount of $15.8 million should be evaluated against the technical specifications and the criticality of the systems it supports.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or when urgency dictates a direct award. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price and potentially explore innovative solutions from a wider range of suppliers.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits the opportunity for other businesses to compete for government contracts.

Public Impact

The Department of the Navy is the primary beneficiary, acquiring critical components for its systems. The contract supports the development and deployment of advanced navigation and guidance systems. The geographic impact is likely concentrated within naval operations and associated facilities. The contract may have implications for the specialized manufacturing workforce involved in producing these chassis.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for taxpayer dollars.
Sole-source awards can stifle innovation by limiting exposure to a broader range of technological solutions.
The specific nature of the 'common chassis' is not detailed, making it difficult to assess its necessity and potential alternatives.
The contract's duration and value warrant scrutiny to ensure efficient use of funds.

Positive Signals

The firm-fixed-price contract type provides cost predictability for the government.
The award to Sierra Nevada Company, LLC, suggests a reliance on their specific expertise or existing technology.
The procurement is for essential components supporting critical defense systems.

Sector Analysis

This contract falls within the defense industrial base, specifically focusing on the manufacturing of sophisticated electronic systems for navigation and guidance. The market for such specialized components is often characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this sector is driven by national security needs and technological advancements, with significant government investment in R&D and procurement of advanced systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This sole-source award to a likely larger entity suggests limited direct opportunities for small businesses to participate in this specific procurement. However, the prime contractor may engage small businesses indirectly through their supply chain, though this is not explicitly detailed.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency may be limited due to the sole-source nature of the award, but contract details and performance should be available through federal procurement databases. Inspector General oversight would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

Defense Procurement
Naval Systems Procurement
Navigation and Guidance Systems
Electronic Systems Manufacturing
Sole-Source Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.8 million to SIERRA NEVADA COMPANY, LLC. PROCUREMENT OF MISD 10 AND 23 CHANNEL 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 $15.8 million.

What is the period of performance?

Start: 2025-12-03. End: 2027-10-03.

What specific capabilities does Sierra Nevada Company, LLC possess that led to this sole-source award for the common chassis?

The sole-source nature of this award suggests that Sierra Nevada Company, LLC likely holds unique intellectual property, proprietary technology, or has an established track record with the Department of the Navy for producing these specific 'common chassis.' Without further details, it's presumed that the Navy determined that only this contractor could meet the stringent technical requirements, performance specifications, or integration needs for the intended application. This could be due to prior development efforts, existing system compatibility, or a lack of viable alternatives in the market that could fulfill the requirement within the necessary timeframe. The justification for a sole-source award typically requires extensive documentation to demonstrate why full and open competition was not feasible.

How does the $15.8 million contract value compare to similar procurements for specialized chassis or electronic system components?

Direct comparison of the $15.8 million contract value for 'common chassis' is difficult without precise technical specifications and intended use. However, in the defense sector, procurements for specialized electronic system components, particularly those involving navigation, guidance, and detection, can range widely. Contracts for complex chassis designed for harsh environments or with integrated advanced electronics can easily run into millions of dollars, especially if they are custom-built or require significant research and development. Benchmarking would require identifying contracts with similar technical complexity, performance requirements, and quantities. The firm-fixed-price nature suggests a defined scope, but the unit cost and overall value are highly dependent on the specific technological sophistication and integration demands of these chassis.

What are the primary risks associated with a sole-source award of this magnitude for critical defense components?

The primary risks associated with a sole-source award of this magnitude include potential overpricing due to the absence of competitive bidding, leading to reduced value for taxpayer money. There's also a risk of complacency from the sole provider, potentially impacting innovation and responsiveness compared to a competitive environment. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if Sierra Nevada Company, LLC faces production issues, delays, or financial instability, it could significantly disrupt the Department of the Navy's operations. The lack of competition also limits the government's ability to explore alternative technologies or solutions that might emerge from other vendors.

What is the expected program effectiveness or impact of these common chassis on the Department of the Navy's operations?

The 'common chassis' likely serves as a standardized platform or housing for various electronic systems used by the Department of the Navy, potentially in areas such as search, detection, navigation, and guidance. The effectiveness is expected to stem from standardization, which can simplify maintenance, reduce training requirements, improve interoperability between different systems, and potentially lower lifecycle costs. By providing a common foundation, these chassis can streamline the integration of new technologies and upgrades across multiple naval platforms. The program's success will be measured by the reliability, durability, and performance of the systems housed within these chassis, ultimately contributing to enhanced operational capabilities and mission readiness for the Navy.

What are the historical spending patterns for similar 'common chassis' procurements by the Department of Defense or Navy?

Historical spending patterns for 'common chassis' procurements by the Department of Defense or Navy are not readily available without more specific identifiers for the type of chassis and its application. However, the defense sector frequently procures specialized platforms and enclosures for electronic systems. Spending in this area can fluctuate based on modernization efforts, new platform development, and upgrades to existing systems. Sole-source awards for specialized components are not uncommon in defense, particularly when dealing with proprietary technology or systems requiring deep integration. Analyzing past spending would require looking at contracts awarded under similar NAICS codes (like 334511) and for related system types, assessing whether they were competed or sole-sourced, and their respective values and durations.

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: $15,782,536

Exercised Options: $15,782,536

Current Obligation: $15,782,536

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