Navy awards $29.6M contract for aircraft parts, with no competition

Contract Overview

Contract Amount: $29,640,000 ($29.6M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-23

End Date: 2027-06-21

Contract Duration: 1,001 days

Daily Burn Rate: $29.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BOLT

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $29.6 million to SIKORSKY AIRCRAFT CORPORATION for work described as: BOLT Key points: 1. Contract awarded without competition, raising questions about potential cost savings. 2. Pricing for aircraft parts needs benchmarking against similar procurements. 3. Sole-source award may limit opportunities for innovative solutions and broader market participation. 4. Contract duration extends over two fiscal years, indicating ongoing supply needs. 5. The award falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' a critical defense sector. 6. Lack of competition could impact the government's ability to secure the best value. 7. The fixed-price contract type shifts some risk to the contractor. 8. This award represents a small portion of the overall defense budget for aircraft parts.

Value Assessment

Rating: questionable

The contract value of $29.6 million for aircraft parts requires careful scrutiny due to the lack of competitive bidding. Without comparison to multiple offers, it is difficult to definitively assess if this price represents fair market value. Benchmarking against historical awards for similar parts or against industry price lists would be necessary to determine if the government received good value for its investment. The absence of competition inherently introduces a risk that the price may be higher than what could have been achieved through a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, SIKORSKY AIRCRAFT CORPORATION, was solicited. This approach bypasses the standard competitive bidding process, which typically involves soliciting offers from multiple potential suppliers. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less price discovery and potentially higher costs for the government compared to full and open competition.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that a competitive bidding process could have generated. This could translate to a higher overall expenditure for the required aircraft parts.

Public Impact

The U.S. Navy benefits from the acquisition of essential aircraft parts. This contract supports the operational readiness and maintenance of naval aircraft fleets. The services delivered are critical for ensuring the continued functionality of military aviation assets. The geographic impact is primarily within Connecticut, where Sikorsky Aircraft Corporation is based, and wherever the supplied parts are ultimately utilized by the Navy. Workforce implications include continued employment for those involved in the manufacturing and supply chain of these aircraft parts at Sikorsky and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Lack of transparency in the procurement process due to no-bid award.
Potential for higher-than-market pricing without competitive benchmarking.
Dependence on a single supplier could create future supply chain risks.
No clear mechanism for evaluating alternative suppliers or innovative solutions.

Positive Signals

Fixed-price contract type provides cost certainty for the government once awarded.
Sikorsky Aircraft Corporation is a known entity with established capabilities in aircraft manufacturing.
The contract duration suggests a stable, long-term need for these parts.
Awarded by the Department of the Navy, indicating alignment with defense priorities.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a vital component of the aerospace and defense industry. This sector encompasses the production of a wide array of components, from engines and avionics to structural elements and landing gear. The market is characterized by high barriers to entry, stringent quality control requirements, and significant government procurement. Spending in this area is often driven by military modernization programs, maintenance, and sustainment efforts. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar aircraft parts across different branches of the military.

Small Business Impact

This contract was not set aside for small businesses, nor is there an indication of specific subcontracting requirements for small businesses within the provided data. The award to a large corporation like Sikorsky Aircraft Corporation suggests that the primary focus was on the prime contractor's capabilities. Without explicit small business set-aside provisions or subcontracting goals, the direct impact on the small business ecosystem for this specific award is likely minimal, though Sikorsky may engage small businesses in its supply chain.

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 contract terms, particularly the fixed-price nature which obligates the contractor to deliver specified goods. Transparency is limited due to the sole-source nature of the award, as public disclosure of the justification for not competing is often less detailed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Procurement
Naval Aviation Sustainment
Defense Logistics Agency Contracts
Aerospace Manufacturing Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Lack of competition
Potential for uncompetitive pricing
Limited transparency in procurement justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.6 million to SIKORSKY AIRCRAFT CORPORATION. BOLT

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 $29.6 million.

What is the period of performance?

Start: 2024-09-23. End: 2027-06-21.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' (CT). Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. Without further documentation (e.g., Justification for Other Than Full and Open Competition - JOFOC), the precise reason remains unknown. Common justifications include proprietary technology, unique capabilities, or the need to maintain compatibility with existing systems where only one manufacturer can fulfill the requirement. This lack of competition warrants further investigation to ensure taxpayer funds are used efficiently.

How does the pricing of this contract compare to similar aircraft parts procured competitively?

Direct comparison of pricing is challenging without access to a database of similar competitively awarded contracts for identical or comparable aircraft parts. The value of $29.6 million for 1001 units (implied by duration and value, though unit count is not explicit) suggests an average price of approximately $29,570 per unit. However, the nature of 'Other Aircraft Parts and Auxiliary Equipment' is broad, encompassing items with vastly different costs. A thorough analysis would require identifying the specific parts, their technical specifications, and then benchmarking against prices from multiple bids on similar items awarded by the Department of Defense or other federal agencies. The absence of competition here means this benchmark is currently unavailable.

What are the potential risks associated with awarding a contract of this magnitude without competition?

The primary risk of a sole-source award is the potential for inflated pricing, as the government lacks the leverage of competitive bids to drive down costs. There's also a risk of reduced innovation, as potential suppliers with alternative solutions are not engaged. Furthermore, over-reliance on a single supplier can create supply chain vulnerabilities, especially if that supplier faces production issues or financial instability. For a contract valued at nearly $30 million, these risks are significant and underscore the importance of robust justification for non-competitive awards.

What is the track record of Sikorsky Aircraft Corporation in fulfilling similar defense contracts?

Sikorsky Aircraft Corporation, a Lockheed Martin company, has a long and established history of supplying aircraft and components to the U.S. military, including the Navy. They are well-known for their helicopter production (e.g., Black Hawk, Seahawk). Their track record in fulfilling defense contracts is generally considered strong, characterized by extensive experience and technical expertise. However, the specific performance history related to 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' for the Navy, particularly concerning on-time delivery, quality, and adherence to budget on past sole-source awards, would require a deeper dive into contract performance databases and past performance reviews.

How does this contract fit into the broader spending patterns for aircraft parts within the Department of the Navy?

This $29.6 million contract represents a specific procurement within the vast and complex ecosystem of naval aviation sustainment. The Department of the Navy spends billions annually on aircraft maintenance, repair, and overhaul (MRO), which includes the procurement of a wide array of parts. While this single award is substantial, it is likely one of many thousands of contracts issued for aircraft components. Its significance lies in its sole-source nature and the specific category of parts. Analyzing its place requires comparing it to the total annual spend on aircraft parts, the proportion allocated to sole-source vs. competitive awards, and the specific types of aircraft these parts support.

What are the implications of the fixed-price contract type for this sole-source award?

A Firm Fixed Price (FFP) contract type means the price is set and not subject to adjustment based on the contractor's cost experience. For the government, this offers cost certainty, as the total expenditure is known upfront, assuming the contractor meets the contract requirements. For the contractor (Sikorsky), it means they bear the risk of cost overruns. In a sole-source scenario, the government relies on its pre-award price negotiation and cost analysis to ensure the fixed price is fair and reasonable. While FFP is generally preferred for its cost control, the effectiveness of the price negotiation is paramount when competition is absent.

Industry Classification

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

Product/Service Code: MECHANICAL POWER TRANSMISSION EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

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: $39,520,000

Exercised Options: $39,520,000

Current Obligation: $29,640,000

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $4,788,723

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038320GX901

IDV Type: BOA

Timeline