DoD awards $19M for aircraft parts, with limited competition and long-term delivery

Contract Overview

Contract Amount: $19,077,794 ($19.1M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-13

End Date: 2029-06-29

Contract Duration: 1,750 days

Daily Burn Rate: $10.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MOTOR,CONTROL

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $19.1 million to SIKORSKY AIRCRAFT CORPORATION for work described as: MOTOR,CONTROL Key points: 1. Contract awarded as a delivery order under an existing contract. 2. Long performance period suggests a need for sustained supply. 3. Sole-source award raises questions about price competitiveness. 4. Focus on aircraft parts indicates a critical component of defense readiness. 5. Contract value is moderate within the broader defense procurement landscape.

Value Assessment

Rating: fair

The contract value of $19.1 million over approximately 4.8 years appears moderate for specialized aircraft parts. Without a competitive bidding process, it is difficult to benchmark the value for money effectively. The firm-fixed-price contract type offers some cost certainty, but the absence of competition limits the ability to assess if the pricing is optimal compared to market rates or alternative suppliers.

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 specific capability or product is only available from a single source, or in cases of urgent need. The lack of competition means that the government did not benefit from a range of proposals and potentially lower prices that could arise from a more open bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not achieve the most favorable pricing due to the absence of competitive pressure.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the continued operation and maintenance of aircraft. Services delivered include the supply of critical aircraft parts, essential for mission readiness. The geographic impact is primarily within the United States, supporting defense logistics and maintenance operations. Workforce implications include continued employment for those involved in the manufacturing and supply chain of these specialized parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Long contract duration may not allow for reassessment of market prices or technological advancements.
Lack of transparency in the sole-source justification could obscure potential alternatives.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established contractor like Sikorsky may indicate reliability and proven performance.
Delivery order structure suggests it's part of a larger, pre-existing framework agreement.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicates a specialized segment of this industry. Spending in this area is crucial for maintaining military aviation capabilities. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft components or maintenance services within the Department of Defense.

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. The award to a large prime contractor like Sikorsky suggests that opportunities for small businesses would likely be through direct subcontracting relationships, the extent of which is not detailed in this award notice.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. As a delivery order under an existing contract, the initial award and justification would have undergone review. Transparency regarding the sole-source justification and performance metrics would be key to assessing accountability.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Parts Manufacturing
Defense Logistics Support
Military Aircraft Procurement

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.1 million to SIKORSKY AIRCRAFT CORPORATION. MOTOR,CONTROL

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 $19.1 million.

What is the period of performance?

Start: 2024-09-13. End: 2029-06-29.

What is the historical spending pattern for Sikorsky Aircraft Corporation with the Department of Defense for similar aircraft parts?

Analyzing historical spending for Sikorsky Aircraft Corporation with the Department of Defense for similar aircraft parts requires access to comprehensive contract databases. Generally, Sikorsky, as a major defense contractor, has a long history of supplying aircraft and components to the DoD. Past awards would likely show a pattern of significant contract values, particularly for platforms like the Black Hawk helicopter. Understanding the volume, frequency, and specific types of parts procured historically would provide context for the current $19.1 million award. Without specific historical data for this exact part category, it's challenging to determine if this award represents an increase, decrease, or continuation of previous spending levels. However, the sole-source nature of this award suggests a specific, potentially long-standing requirement.

How does the per-unit cost of these aircraft parts compare to industry benchmarks or similar government contracts?

Determining the per-unit cost benchmark for these aircraft parts is challenging without specific details on the items being procured and their quantities. As this contract was awarded sole-source, direct comparison to competitively bid contracts is not feasible. Industry benchmarks for specialized aerospace components can vary widely based on complexity, materials, and manufacturing processes. Government contracts often have negotiated pricing, but sole-source awards inherently lack the price discovery mechanism of competition. To assess value, one would need to compare the unit prices against historical data for the same or equivalent parts, or against prices paid by other government agencies or commercial entities for similar items, assuming such data is publicly available and comparable.

What are the specific risks associated with a sole-source award for critical aircraft parts?

The primary risk associated with a sole-source award for critical aircraft parts is the potential for inflated pricing due to the absence of competitive pressure. This can lead to reduced value for taxpayer money. Another significant risk is the potential for vendor lock-in, where the government becomes dependent on a single supplier, limiting flexibility and negotiation power in the future. Furthermore, sole-source awards can sometimes mask inefficiencies or a lack of innovation from the awarded contractor, as there is less incentive to improve processes or reduce costs when competition is not a factor. Ensuring the justification for the sole-source award is robust and that the government has exercised due diligence in negotiating the best possible price is crucial to mitigate these risks.

What is the expected impact of this contract on the operational readiness of the specific aircraft platforms it supports?

This contract is expected to have a positive impact on the operational readiness of the specific aircraft platforms it supports by ensuring the continued availability of necessary parts. Aircraft require regular maintenance and component replacement to remain airworthy and mission-capable. By securing a supply of these parts, the Department of Defense can mitigate potential grounding of aircraft due to parts shortages, thereby maintaining the fleet's readiness. The long duration of the contract (ending in June 2029) suggests a commitment to sustained support, which is vital for platforms with long service lives. This ensures that maintenance, repair, and overhaul activities can proceed without interruption, directly contributing to the DoD's ability to deploy and operate its air assets effectively.

Are there any performance metrics or key performance indicators (KPIs) associated with this delivery order to ensure contractor accountability?

While the award notice itself does not detail specific performance metrics or Key Performance Indicators (KPIs), delivery orders under larger contracts typically operate within the framework of the parent contract's terms and conditions. These often include requirements for on-time delivery, quality standards, and adherence to specifications. The Defense Contract Management Agency (DCMA) is usually responsible for monitoring contractor performance. For critical aircraft parts, KPIs might include defect rates, delivery timeliness, and compliance with technical specifications. The firm-fixed-price nature of the contract incentivizes the contractor to meet these requirements to avoid financial penalties or future contract issues, though specific KPIs would be detailed in the full contract documentation.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038324RF121

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: $38,934,272

Exercised Options: $38,934,272

Current Obligation: $19,077,794

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $6,921,436

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038320GX901

IDV Type: BOA

Timeline