DoD awards $25M for Aircraft Manufacturing upgrade, highlighting potential cost efficiencies

Contract Overview

Contract Amount: $24,961,283 ($25.0M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-23

End Date: 2022-05-30

Contract Duration: 249 days

Daily Burn Rate: $100.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AFC-511 BU 7.0/8.1 UPGRADE INSTALLATIONS

Place of Performance

Location: ENGLEWOOD, DENVER County, COLORADO, 80112

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $25.0 million to SIERRA NEVADA COMPANY, LLC for work described as: AFC-511 BU 7.0/8.1 UPGRADE INSTALLATIONS Key points: 1. Significant contract value for aircraft system upgrades. 2. Competition method appears robust, potentially driving value. 3. Cost-plus fixed fee structure warrants close monitoring for efficiency. 4. Sector focus on aircraft manufacturing indicates critical defense needs.

Value Assessment

Rating: good

The contract value of $24.96M for an aircraft upgrade appears reasonable given the scope. Benchmarking against similar complex aircraft system modifications would provide a clearer picture of its value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process that should have led to fair price discovery. The delivery order structure implies it's part of a larger IDIQ.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering competitive pricing and potentially reducing overall spending.

Public Impact

Enhances critical aircraft capabilities for the Department of Defense. Supports advanced manufacturing and technology within the defense sector. Potential for follow-on work or upgrades based on this installation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed fee contracts can incentivize cost overruns if not managed tightly.
The specific nature of the upgrade (7.0/8.1) could imply legacy system integration challenges.

Positive Signals

Awarded under full and open competition.
Delivery order structure suggests potential for future task orders.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical area for national defense. Spending in this sector often involves high R&D and complex integration costs, making competitive bidding essential.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). Further analysis would be needed to determine if small business participation was sought or achieved through subcontracting.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency, indicating established oversight mechanisms. However, the cost-plus fixed fee structure necessitates diligent monitoring to ensure cost control and prevent inefficiencies.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Cost-plus fixed fee contract type.
No small business participation indicated.
Specific upgrade details (7.0/8.1) require further context.
Delivery order implies potential for follow-on work with unknown scope/cost.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.0 million to SIERRA NEVADA COMPANY, LLC. AFC-511 BU 7.0/8.1 UPGRADE INSTALLATIONS

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $25.0 million.

What is the period of performance?

Start: 2021-09-23. End: 2022-05-30.

What is the specific impact of the 7.0/8.1 upgrade on aircraft performance and operational readiness?

The 7.0/8.1 upgrade likely pertains to software or avionics systems, aiming to enhance functionality, improve reliability, or meet new regulatory requirements. This could translate to better mission effectiveness, reduced maintenance downtime, and extended operational life for the aircraft fleet. Specific performance metrics and readiness improvements would be detailed in the technical documentation supporting the contract.

How effectively was the cost-plus fixed fee structure managed to ensure value for money?

Effective management of a cost-plus fixed fee contract requires rigorous oversight of incurred costs, detailed justification for expenses, and clear performance metrics. The agency must ensure that Sierra Nevada Company, LLC is operating efficiently and that costs are reasonable and allocable to the contract. Regular audits and performance reviews are crucial to prevent cost overruns and ensure the fixed fee remains appropriate for the work performed.

What is the long-term strategic value of this upgrade for the DoD's aviation capabilities?

This upgrade represents a strategic investment in maintaining and enhancing the capabilities of the DoD's aircraft fleet. By incorporating newer technologies or functionalities, it ensures the aircraft remain relevant and effective against evolving threats. The upgrade could improve operational efficiency, reduce lifecycle costs, and support future modernization efforts, thereby contributing to overall air superiority and mission success.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042116R0040

Pricing Type: COST PLUS FIXED FEE (U)

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: $27,318,703

Exercised Options: $27,318,703

Current Obligation: $24,961,283

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $16,788,992

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042117D0047

IDV Type: IDC

Timeline