DoD awards $23.2M for wire harnesses, with limited competition raising cost concerns

Contract Overview

Contract Amount: $23,225,050 ($23.2M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-20

End Date: 2027-06-16

Contract Duration: 999 days

Daily Burn Rate: $23.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: WIRE HARNESS

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to SIKORSKY AIRCRAFT CORPORATION for work described as: WIRE HARNESS Key points: 1. Contract awarded through a sole-source justification, limiting price discovery and potentially increasing costs. 2. The fixed-price contract type offers some cost certainty but relies heavily on initial negotiation quality. 3. The duration of the contract (nearly 3 years) suggests a long-term need for these critical components. 4. This award falls within the 'Other Aircraft Parts' manufacturing NAICS code, indicating a specialized industrial base. 5. The sole-source nature warrants scrutiny regarding the necessity of this procurement approach. 6. Potential for higher unit costs due to lack of competitive bidding.

Value Assessment

Rating: questionable

Benchmarking the value of this $23.2 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The fixed-price contract type provides some cost control, but the absence of competition means the government did not benefit from potential cost reductions that could arise from multiple bidders vying for the contract. Further analysis would require access to historical pricing for similar wire harnesses or internal cost estimates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one bidder, Sikorsky Aircraft Corporation, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they inherently limit the government's ability to secure the best possible price and terms. The lack of competition means taxpayers may not be receiving the most cost-effective solution.

Taxpayer Impact: The absence of competition means taxpayers are potentially paying a premium for these wire harnesses. Without multiple bids, there's less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially the broader Department of Defense, ensuring the availability of critical components for aircraft. The contract will deliver essential wire harnesses, vital for the operational readiness and functionality of aircraft. The geographic impact is primarily centered in Connecticut, where Sikorsky Aircraft Corporation is located, potentially supporting local jobs and the regional aerospace industry. This contract supports the specialized manufacturing workforce within the aerospace sector, particularly those skilled in producing complex aircraft components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the procurement process due to the absence of multiple bidders.
Reliance on a single contractor for critical aircraft components could pose supply chain risks if not managed carefully.
Fixed-price contract requires robust oversight to ensure quality and prevent scope creep, especially without competitive pressure.

Positive Signals

The fixed-price contract type provides cost certainty for the government once negotiated.
The award ensures the continued supply of essential components for naval aviation.
The contractor, Sikorsky Aircraft Corporation, is a known entity with established experience in aerospace manufacturing.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, complex supply chains, and significant R&D investment. This contract for wire harnesses falls under NAICS code 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing). Spending in this sub-sector is driven by defense procurement and commercial aviation demand. Comparable spending benchmarks are difficult to establish without more specific details on the wire harness specifications, but overall defense spending on aircraft parts is substantial, often involving long-term contracts with key suppliers.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the sole-source nature and the prime contractor (Sikorsky Aircraft Corporation), it is unlikely that significant subcontracting opportunities for small businesses will be mandated or easily accessible through this specific award. The focus is on fulfilling the prime contractor's requirements, and any small business involvement would likely be at the discretion of Sikorsky.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, which define deliverables and payment schedules. Transparency is limited due to the sole-source award, making public scrutiny of the pricing and justification more challenging. The Inspector General for the Department of Defense may have jurisdiction for audits and investigations if fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Naval Aviation Sustainment Programs
Aerospace Component Manufacturing
Sole-Source Defense Contracts
Fixed-Price Supply Contracts

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to SIKORSKY AIRCRAFT CORPORATION. WIRE HARNESS

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 $23.2 million.

What is the period of performance?

Start: 2024-09-20. End: 2027-06-16.

What is the specific technical requirement for these wire harnesses, and how does it justify a sole-source award?

The provided data does not detail the specific technical requirements for the wire harnesses. A sole-source award is typically justified when only one responsible source is available or capable of meeting the requirement, often due to proprietary technology, unique capabilities, or urgent and compelling needs where competition is not feasible. For this contract, the justification would need to articulate why Sikorsky Aircraft Corporation is the only entity capable of producing these specific wire harnesses to the required specifications and timeline. Without this detailed justification, it's difficult to assess the validity of the sole-source approach and its impact on value for money.

How does the $23.2 million contract value compare to historical spending on similar wire harnesses by the Navy or DoD?

The provided data does not include historical spending figures for similar wire harnesses, making a direct comparison impossible. To assess value, one would need to analyze past contracts for comparable wire harnesses, considering factors like quantity, specifications, and inflation. The current $23.2 million award, being sole-source, lacks a competitive benchmark. If previous awards for similar items were competed and resulted in significantly lower prices, it would suggest potential overpayment in this instance. Conversely, if the specifications are highly specialized or unique, the price might be justifiable, but this requires further investigation into the contract's technical details and the justification for sole-sourcing.

What are the key performance indicators (KPIs) and delivery milestones outlined in the contract?

The provided data indicates the contract start date is September 20, 2024, and the end date is June 16, 2027, with a duration of 999 days (approximately 2.7 years). However, specific Key Performance Indicators (KPIs) and detailed delivery milestones are not included in this summary. For a comprehensive assessment, one would need to review the full contract document, which would outline specific quality standards, delivery schedules for different batches or components, and potential penalties for non-compliance. These details are crucial for evaluating the contractor's performance and ensuring timely delivery of critical aircraft parts.

What is Sikorsky Aircraft Corporation's track record with the Department of the Navy, particularly on similar sole-source contracts?

Sikorsky Aircraft Corporation is a well-established defense contractor with a long history of supplying aircraft and components to the Department of the Navy and other military branches. While specific details on their track record with sole-source contracts for wire harnesses are not provided here, their general experience suggests a capacity to fulfill complex requirements. However, a deeper dive into their performance history, including past sole-source awards, on-time delivery rates, quality metrics, and any disputes or contract modifications, would be necessary to fully assess their reliability and the appropriateness of this specific award.

Are there any provisions for price adjustments or audits within this fixed-price contract, given the sole-source nature?

The data indicates this is a 'FIRM FIXED PRICE' (FFP) contract. Typically, FFP contracts offer the least flexibility for price adjustments, as the price is set at the time of award and is not subject to changes based on the contractor's cost experience. However, certain clauses, such as economic price adjustments (EPAs) or government audit rights, can sometimes be included even in FFP contracts, particularly for long-duration procurements or specialized items. Without the full contract text, it's unknown if such provisions exist. If not, the government has limited recourse to adjust the price downwards if costs decrease, and the contractor bears the risk of cost overruns.

What is the estimated total value of wire harnesses procured by the DoD annually, and how does this contract fit into that spending?

The provided data does not offer a figure for the total annual DoD spending on wire harnesses. This $23.2 million contract represents a specific procurement for the Department of the Navy, likely for a particular aircraft platform or program. To understand its broader context, one would need to aggregate spending data across all DoD agencies and contract types for wire harnesses. This would reveal whether this award is a significant portion of overall spending or a relatively minor component. Such analysis would help in identifying trends and potential areas for cost savings or increased competition across the department.

Industry Classification

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

Product/Service Code: IT AND TELECOM - COMPUTE

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: $30,966,734

Exercised Options: $30,966,734

Current Obligation: $23,225,050

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0038320GX901

IDV Type: BOA

Timeline