DoD awards $35.7M contract for helicopter parts, raising questions about competition and value

Contract Overview

Contract Amount: $35,740,284 ($35.7M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-19

End Date: 2027-06-15

Contract Duration: 999 days

Daily Burn Rate: $35.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SLEEVE,BLADE,ROTARY

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06615

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $35.7 million to SIKORSKY AIRCRAFT CORPORATION for work described as: SLEEVE,BLADE,ROTARY Key points: 1. Contract awarded without competition, limiting price discovery and potentially increasing costs. 2. High value for a single delivery order suggests significant demand or specialized components. 3. Limited competition raises concerns about contractor performance and potential for cost overruns. 4. The contract duration extends over multiple fiscal years, indicating a long-term need. 5. The specific parts (sleeve, blade, rotary) are critical for helicopter operational readiness. 6. The award to a single, established manufacturer may reflect market concentration in this niche.

Value Assessment

Rating: questionable

The contract value of $35.7 million for a single delivery order is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition means the government did not benefit from potential cost savings that could arise from multiple vendors vying for the contract. This award warrants further scrutiny to ensure fair pricing and value for taxpayer dollars.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple qualified contractors. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they inherently reduce price competition and may lead to higher costs for the government.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the best possible price for these critical helicopter parts. The government's negotiating position is weakened, potentially leading to expenditures that could have been lower if multiple suppliers had been involved.

Public Impact

The Department of Defense benefits from the acquisition of essential helicopter components. This contract ensures the continued operational readiness and maintenance of military helicopters. The services delivered are crucial for national defense and security operations. The geographic impact is primarily within the defense sector, supporting military aviation units.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for money.
Sole-source awards can create dependency on a single supplier, increasing long-term risk.
Limited transparency in pricing due to the absence of competitive bids.
Potential for contractor to leverage sole-source status for future contract terms.

Positive Signals

Ensures supply of critical, potentially specialized helicopter parts.
Award to an established manufacturer may indicate reliability and proven capability.
Contract duration provides stability for essential maintenance and supply chain.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high barriers to entry, complex supply chains, and significant R&D investment. Contracts for aircraft parts, especially for military applications, often involve specialized components and stringent quality requirements. The market for certain helicopter parts can be concentrated, with a few key manufacturers dominating production. This contract fits within the broader category of defense industrial base support, ensuring the availability of critical components for military aviation.

Small Business Impact

This contract was not competed and there is no indication of small business set-aside or subcontracting requirements. As a sole-source award to a large corporation, it is unlikely to directly benefit small businesses through prime contracting. The absence of subcontracting clauses also limits potential opportunities for small businesses to participate in the supply chain for these parts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures would include contract performance monitoring, quality assurance checks, and financial audits. Transparency is limited due to the sole-source nature of the award, but contract award data is publicly available. The Inspector General's office within the DoD may conduct audits or investigations if concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Department of Defense Aircraft Procurement
Naval Aviation Maintenance and Sustainment
Rotary-Wing Aircraft Component Manufacturing
Defense Industrial Base Support Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.7 million to SIKORSKY AIRCRAFT CORPORATION. SLEEVE,BLADE,ROTARY

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 $35.7 million.

What is the period of performance?

Start: 2024-09-19. End: 2027-06-15.

What is the historical spending pattern for these specific helicopter parts (sleeve, blade, rotary) with Sikorsky Aircraft Corporation?

Analyzing historical spending data for these specific components from Sikorsky Aircraft Corporation is crucial for understanding the long-term financial commitment and potential trends. Without access to detailed historical contract databases for this precise itemization, a comprehensive analysis is challenging. However, if previous awards for similar parts were also sole-sourced or competitively bid, it would provide context for the current award's value and terms. A significant increase in price or volume compared to past procurements could indicate changing market conditions, increased demand, or potential pricing issues. Conversely, consistent spending patterns might suggest stable operational needs and predictable costs. Further investigation into prior contract awards for these parts would be necessary to establish a robust historical benchmark and assess value for money over time.

How does the $35.7 million value of this delivery order compare to typical spending on similar helicopter components by the Department of the Navy?

The $35.7 million value for a single delivery order of helicopter parts is substantial and warrants comparison with the Department of the Navy's typical spending on similar components. Without specific data on the unit cost of sleeves, blades, and rotary parts, it's difficult to make a precise benchmark. However, this amount suggests either a very large quantity of parts, highly specialized and expensive components, or a combination thereof. If the Navy typically procures such components in smaller batches or at lower unit costs, this award could represent a significant expenditure. Conversely, if these are critical, high-value components for a large fleet of helicopters, the amount might be within expected parameters. A comparative analysis would ideally involve looking at the total contract value over the period of performance and the number of units procured, benchmarked against other similar procurements within the DoD or across the aerospace industry.

What are the specific risks associated with awarding a contract of this magnitude on a sole-source basis?

Awarding a contract of $35.7 million on a sole-source basis carries several significant risks. Primarily, the lack of competition means the government cannot be assured it is receiving the best possible price. The contractor has little incentive to offer competitive pricing, potentially leading to cost overruns and reduced value for taxpayer money. Secondly, it can foster a lack of urgency and innovation from the supplier, as they face no direct threat from competitors. This can also lead to a dependency on a single supplier, creating supply chain vulnerabilities if that supplier experiences production issues, financial instability, or decides to exit the market. Furthermore, sole-source awards can reduce transparency in pricing and make it harder to justify the expenditure to oversight bodies and the public. Finally, it may discourage other capable suppliers from entering the market or developing competing products, potentially limiting future options.

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

Sikorsky Aircraft Corporation, a major defense contractor, has a history of receiving both competitive and sole-source contracts from the Department of Defense. As a primary manufacturer of many military helicopter platforms, it is not uncommon for them to be awarded sole-source contracts for specialized parts, unique systems, or sustainment services where they possess proprietary knowledge or manufacturing capabilities. Analyzing their specific track record with sole-source awards would involve reviewing past contract awards to identify patterns in contract value, duration, justification for sole-sourcing, and any associated performance or cost issues. While sole-source awards are sometimes necessary due to market dynamics or technical requirements, a pattern of frequent or high-value sole-source awards without clear justification can raise concerns about competition and cost-effectiveness. A detailed review of publicly available contract data would be needed to assess this specific aspect of their performance.

Are there any alternative suppliers or potential competitors for these specific helicopter parts, and why might they not have been considered?

Determining the existence of alternative suppliers and the reasons they may not have been considered requires in-depth market research and understanding of the specific helicopter parts in question (sleeve, blade, rotary). For highly specialized or proprietary components, Sikorsky Aircraft Corporation might be the only manufacturer with the necessary tooling, technical data, or certifications. In such cases, the justification for a sole-source award would likely center on technical necessity and the prohibitive cost or time required to qualify an alternative supplier. However, if the parts are more standardized or if other manufacturers produce compatible components, the decision to sole-source could stem from factors like existing relationships, perceived reliability, or a desire to streamline procurement by dealing with a single entity. Without specific technical details about the parts, it's difficult to definitively assess the competitive landscape and the validity of the sole-source justification.

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

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: $72,939,360

Exercised Options: $72,939,360

Current Obligation: $35,740,284

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $539,896

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038320GX901

IDV Type: BOA

Timeline