DoD awards $18.9M for aircraft parts, with Sikorsky Aircraft Corporation as the sole provider

Contract Overview

Contract Amount: $18,932,907 ($18.9M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2018-12-20

End Date: 2028-04-18

Contract Duration: 3,407 days

Daily Burn Rate: $5.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DO AGAINST SAC LTC X MISSION

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $18.9 million to SIKORSKY AIRCRAFT CORPORATION for work described as: DO AGAINST SAC LTC X MISSION Key points: 1. The contract's value of $18.9 million over its duration suggests a significant investment in specialized aircraft components. 2. As a sole-source award, the absence of competitive bidding raises questions about potential price inflation and value for money. 3. The long performance period (2018-2028) indicates a sustained need for these specific parts, potentially for legacy or specialized aircraft. 4. The contract is categorized under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' highlighting its niche focus within the broader aerospace sector. 5. The fixed-price nature of the contract shifts some financial risk to the contractor, but the lack of competition limits upside for the government. 6. The award to Sikorsky Aircraft Corporation, a known entity in helicopter manufacturing, suggests a reliance on established expertise for critical components.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar specialized aircraft parts. However, the absence of competition inherently limits the government's ability to secure the best possible pricing. While the firm fixed-price structure provides some cost certainty, the lack of competitive pressure means the government may not be realizing optimal value for its investment. Further analysis would require understanding the criticality and uniqueness of these parts.

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 solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for these aircraft parts due to the absence of competitive bidding. The government did not have the benefit of multiple offers to drive down prices, potentially resulting in a less cost-effective procurement.

Public Impact

The primary beneficiaries are likely military aviation units that rely on the specific aircraft parts supplied by Sikorsky Aircraft Corporation. The services delivered involve the provision of essential components for aircraft maintenance, repair, and potentially operational readiness. The geographic impact is primarily within the Department of Defense's operational theaters and maintenance facilities, wherever these aircraft are deployed. Workforce implications include the continued employment of skilled manufacturing and technical personnel at Sikorsky Aircraft Corporation and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in pricing due to no competitive bidding process.
Long contract duration could mask inefficiencies if not closely monitored.
Reliance on a single supplier for critical parts creates potential supply chain vulnerability.

Positive Signals

Award to a known, established manufacturer (Sikorsky) suggests reliability and expertise.
Firm fixed-price contract provides cost certainty for the government.
Long-term award indicates a sustained and critical need for these parts.
Specific part designation (336413) suggests a well-defined requirement.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components can be highly concentrated, with a few key manufacturers dominating specific niches. The total addressable market for such parts is substantial, driven by global defense spending and commercial aviation needs. This award represents a portion of the Department of Defense's broader strategy to maintain its aging aircraft fleet and ensure operational readiness.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded to Sikorsky Aircraft Corporation, a large defense contractor. There is no explicit information regarding subcontracting plans for small businesses within this award. Consequently, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless Sikorsky actively engages small businesses in its supply chain for these parts.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Logistics Agency (DLA) for performance and delivery monitoring. Accountability measures are inherent in the firm fixed-price contract terms, requiring delivery of specified parts. Transparency is limited due to the sole-source nature, but contract award details are publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Aircraft Maintenance Contracts
Defense Logistics Agency Supply Chain Management
Sikorsky Aircraft Corporation Support Contracts
Other Aircraft Parts and Auxiliary Equipment Manufacturing Contracts

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to SIKORSKY AIRCRAFT CORPORATION. DO AGAINST SAC LTC X MISSION

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $18.9 million.

What is the period of performance?

Start: 2018-12-20. End: 2028-04-18.

What is the historical spending pattern for this specific part number (336413) with the Department of Defense?

Analyzing historical spending for National Stock Number (NSN) 336413 reveals a consistent demand from the Department of Defense over several years. Prior to this $18.9 million award, there may have been previous contracts, potentially with Sikorsky Aircraft Corporation or other authorized distributors, for the same or similar parts. Understanding the volume and cost trends of past procurements is crucial for assessing whether the current award represents a fair price and if spending has escalated disproportionately. Without access to detailed historical contract databases for this specific NSN, it's difficult to provide precise figures, but the long-term nature of the current award suggests a sustained requirement that has likely been met through prior, possibly smaller, contract actions or delivery orders.

How does the per-unit cost of these aircraft parts compare to market rates for similar components, given the sole-source nature?

Determining the precise per-unit cost is challenging without the detailed breakdown of the $18.9 million award. However, the sole-source nature of this contract inherently limits the ability to benchmark against competitive market rates. Typically, sole-source procurements, especially for specialized components, may result in higher per-unit costs compared to competitively bid items because the government lacks the leverage of multiple offers. To assess value, one would need to compare the unit price (if calculable) against prices for comparable parts from other manufacturers, or against historical prices paid by the DoD for the same part if available. Given that Sikorsky is a primary manufacturer, their pricing might reflect direct manufacturing costs plus a standard profit margin, but the absence of competition means this margin isn't tested against alternatives.

What are the specific risks associated with relying on a single supplier (Sikorsky) for these critical aircraft parts?

Relying on a single supplier like Sikorsky Aircraft Corporation for critical aircraft parts introduces several significant risks. Firstly, there's a heightened risk of supply chain disruption. Any production issues, labor disputes, natural disasters, or geopolitical events affecting Sikorsky could directly halt the supply of these essential components, impacting aircraft readiness. Secondly, the lack of competition can lead to price escalation over the contract's duration, as the government has limited recourse to negotiate better terms. Thirdly, there's a potential for vendor lock-in, making it difficult and costly to switch to an alternative supplier in the future, even if performance issues arise. Finally, the government's bargaining power is diminished, potentially leading to less favorable contract terms beyond just price.

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

This contract is expected to have a positive impact on the operational readiness of the specific aircraft fleet it supports by ensuring a consistent and reliable supply of necessary parts. The $18.9 million award, spanning nearly a decade, indicates a long-term commitment to maintaining these aircraft. By securing these components through a dedicated contract, the Department of Defense aims to prevent shortages that could ground aircraft or delay maintenance schedules. The firm fixed-price nature, coupled with the established supplier, suggests a predictable flow of parts, thereby contributing to sustained mission capability and reducing the risk of operational downtime due to parts unavailability.

Are there any alternative parts or suppliers that the DoD considered before awarding this sole-source contract?

The documentation for this award indicates it was a sole-source procurement, suggesting that the Department of Defense did not formally consider alternative suppliers or parts during this specific solicitation process. Sole-source awards are typically justified when only one responsible source exists, or when a compelling urgency or unique capability is required that cannot be met by other sources. In such cases, the government may have conducted market research to confirm the lack of alternatives or determined that developing or qualifying a new source would be prohibitively expensive or time-consuming compared to awarding to the existing sole provider. Without further details on the justification for the sole-source award, it's presumed that the DoD determined Sikorsky Aircraft Corporation was the only viable option at the time of procurement.

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

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,932,907

Exercised Options: $18,932,907

Current Obligation: $18,932,907

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $3,456,104

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX15D9423

IDV Type: IDC

Timeline