DoD's $41.9M Sikorsky Aircraft contract for helicopter parts awarded without competition

Contract Overview

Contract Amount: $41,911,290 ($41.9M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2019-01-08

End Date: 2023-08-17

Contract Duration: 1,682 days

Daily Burn Rate: $24.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BLADE,ROTARY WING NSN: 1615-01-546-1148 MFR PART NUMBER: 70150-09200-041

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $41.9 million to SIKORSKY AIRCRAFT CORPORATION for work described as: BLADE,ROTARY WING NSN: 1615-01-546-1148 MFR PART NUMBER: 70150-09200-041 Key points: 1. Contract awarded to a single, established manufacturer, raising questions about competitive pricing. 2. Significant contract value for specialized aircraft parts suggests critical operational reliance. 3. Lack of competition indicates potential for higher costs compared to a more open market. 4. Contract duration of over 4 years points to long-term sustainment needs. 5. The award is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' a niche sector. 6. No small business set-aside was applied, suggesting the contractor is a large entity.

Value Assessment

Rating: questionable

The contract's value of $41.9 million for helicopter parts, awarded without competition, warrants scrutiny. Without competitive bids, it is difficult to benchmark the pricing against market rates or similar contracts. The reliance on a sole source, Sikorsky Aircraft Corporation, suggests a potential lack of price discovery and may lead to less favorable terms for the government. Further analysis would be needed to determine if the pricing reflects fair market value given the absence of competitive pressure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, 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 typically result in less price competition and potentially higher costs for the government. The absence of multiple bidders means there was no opportunity to leverage market forces to achieve the best possible price.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the most cost-effective solutions, potentially leading to taxpayer funds being used less efficiently. The lack of competition means taxpayers do not benefit from the cost savings that typically arise from a competitive bidding environment.

Public Impact

The Department of Defense benefits from the acquisition of critical helicopter parts necessary for maintaining operational readiness. This contract supports the sustainment and operational capabilities of military aviation units. The primary beneficiaries are military personnel who rely on functional aircraft for their missions. The contract's impact is primarily within the defense sector, ensuring the availability of specialized equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can reduce transparency in pricing.
Potential for vendor lock-in due to specialized nature of parts.
Limited opportunities for other manufacturers to supply these parts.

Positive Signals

Ensures supply of critical, potentially proprietary, helicopter parts.
Award to an established manufacturer like Sikorsky suggests reliability.
Long contract duration indicates a stable supply chain for essential components.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a specialized segment of the aerospace industry. The market for such parts is often characterized by high barriers to entry due to proprietary technology, stringent quality requirements, and long development cycles. Spending in this sector is critical for defense readiness, as it ensures the continued operation of complex military aircraft. Comparable spending benchmarks are difficult to establish without more specific part details and market analysis, but the $41.9 million value indicates a significant procurement for the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates the awardee, Sikorsky Aircraft Corporation, is a large entity. There is no indication of subcontracting requirements for small businesses within this specific award. Consequently, this contract does not directly contribute to the small business ecosystem or provide opportunities for small business set-asides. The focus appears to be on securing parts from a primary, likely original equipment manufacturer.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the contract terms, such as delivery schedules and quality specifications. Transparency is limited due to the sole-source nature of the award, making public scrutiny of pricing and justification more challenging. The Defense Contract Audit Agency (DCAA) and the Department of Defense Office of Inspector General (DoDIG) would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

DoD Rotary Wing Aircraft Sustainment
Defense Logistics Agency Aviation Parts Procurement
Military Helicopter Fleet Maintenance
Aerospace Parts Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.9 million to SIKORSKY AIRCRAFT CORPORATION. BLADE,ROTARY WING NSN: 1615-01-546-1148 MFR PART NUMBER: 70150-09200-041

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 $41.9 million.

What is the period of performance?

Start: 2019-01-08. End: 2023-08-17.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, such as when the item is proprietary, unique, or essential for interoperability with existing systems. For a contract of this value, a detailed justification and approval (J&A) document would normally be required by federal acquisition regulations, outlining why full and open competition was not feasible. Without this document, the rationale remains unclear, but it could relate to proprietary technology, unique manufacturing capabilities of Sikorsky, or critical sustainment needs for specific helicopter platforms where Sikorsky is the sole provider.

How does the pricing of this contract compare to similar sole-source awards for aircraft parts?

Direct comparison of pricing for this $41.9 million contract to similar sole-source awards is challenging without access to detailed pricing breakdowns and specific part identifiers. Sole-source awards inherently lack the price discovery mechanism of competitive bidding, making external benchmarking difficult. However, federal procurement data and historical analysis of sole-source contracts often reveal that prices can be higher than if the items were competitively procured. Agencies typically rely on cost realism analyses and audits to ensure prices are fair and reasonable, but the absence of competition limits the government's leverage. Further investigation into the contractor's cost structure and profit margins would be necessary for a more definitive comparison.

What are the potential risks associated with relying on a sole-source supplier for critical helicopter parts?

Relying on a sole-source supplier like Sikorsky Aircraft Corporation for critical helicopter parts presents several risks. Firstly, there is a significant risk of price escalation over time, as the government has limited negotiation leverage without competitive alternatives. Secondly, there's a potential for supply chain disruptions if the sole supplier faces production issues, financial instability, or geopolitical challenges. Thirdly, this arrangement can lead to vendor lock-in, making it difficult and costly to switch suppliers even if better options emerge. Lastly, the lack of competition can stifle innovation and improvements in parts manufacturing, as the supplier faces less pressure to enhance efficiency or quality beyond contractual minimums.

What is the historical spending pattern with Sikorsky Aircraft Corporation for similar parts?

The provided data represents a single contract award of $41.9 million to Sikorsky Aircraft Corporation. To assess historical spending patterns, a broader search across federal procurement databases would be necessary. This would involve looking for previous contracts awarded to Sikorsky for 'BLADE,ROTARY WING' or similar NSNs and part numbers, as well as other aircraft parts. Analyzing the volume, value, and competition levels of past awards would reveal trends in the government's reliance on Sikorsky, the pricing trends over time, and whether similar sole-source awards have been common for this contractor. Without this broader data, it's impossible to establish a historical spending pattern from this single data point.

What is the performance track record of Sikorsky Aircraft Corporation with the Department of Defense?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long-standing and extensive track record as a major supplier of helicopters and related components to the U.S. military and other government agencies. They are known for producing iconic aircraft like the Black Hawk and Seahawk. Their performance track record with the Department of Defense is generally considered robust, characterized by the delivery of complex systems and sustainment services. However, like any large defense contractor, specific contract performance can vary. Assessing their track record for this particular contract would require examining past performance evaluations, on-time delivery rates, quality metrics, and any past disputes or contract modifications related to similar parts or services.

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 (UEI: 834951691)

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: $41,911,290

Exercised Options: $41,911,290

Current Obligation: $41,911,290

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $91,677

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX15D9423

IDV Type: IDC

Timeline