DoD awards $33.6M for rotary wing parts, with Sikorsky Aircraft Corporation as the sole provider

Contract Overview

Contract Amount: $33,598,276 ($33.6M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2019-12-04

End Date: 2023-11-09

Contract Duration: 1,436 days

Daily Burn Rate: $23.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BLADE,ROTARY WING, 1615-01-546-1148 180 EACH

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $33.6 million to SIKORSKY AIRCRAFT CORPORATION for work described as: BLADE,ROTARY WING, 1615-01-546-1148 180 EACH Key points: 1. Value for money is difficult to assess due to the lack of competition. 2. The contract was awarded on a sole-source basis, limiting price discovery. 3. Potential risks include over-reliance on a single supplier and price escalation. 4. Performance context is limited as this is a delivery order for parts. 5. This contract falls within the Defense sector, specifically aircraft parts manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of the parts. Without competitive bids, it's difficult to determine if the price reflects fair market value. The awarded amount of $33.6 million for 180 units suggests a significant per-unit cost, which warrants further scrutiny against historical pricing or alternative suppliers if they were ever considered.

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 competitive bidding process, which typically leads to better pricing and innovation. The lack of competition raises concerns about whether the government secured the best possible terms and pricing for these critical rotary wing parts.

Taxpayer Impact: Taxpayers may be paying a premium for these parts due to the absence of a competitive bidding process. The government's ability to negotiate favorable pricing is diminished when only one supplier is considered.

Public Impact

The Department of Defense benefits from the supply of essential rotary wing parts. These parts are critical for maintaining the operational readiness of military aircraft. The geographic impact is primarily within Connecticut, where Sikorsky Aircraft Corporation is based. Workforce implications are positive for Sikorsky's employees in Connecticut.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing.
Potential for price increases without competition.
Lack of transparency in the procurement process.

Positive Signals

Ensures supply of critical rotary wing parts.
Leverages established relationship with a known manufacturer.
Supports a key defense industrial base supplier.

Sector Analysis

The aerospace and defense industry is characterized by high barriers to entry and significant R&D investment. Contracts for specialized aircraft parts, like those for rotary wing platforms, often involve complex manufacturing processes and stringent quality control. Spending in this sub-sector is driven by military readiness requirements and the lifecycle of aging aircraft fleets. Comparable spending benchmarks are difficult to establish without more specific part details, but the overall market for aircraft parts is substantial.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, Sikorsky Aircraft Corporation, will likely fulfill the majority of the contract requirements internally, potentially limiting opportunities for small businesses to participate in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting oversight mechanisms, potentially involving the Defense Contract Management Agency (DCMA) for performance monitoring and the Defense Contract Audit Agency (DCAA) for financial audits. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Rotary Wing Aircraft Maintenance
Defense Logistics Agency Supply Chain Management
Aerospace Parts Manufacturing

Risk Flags

Sole-source award
Lack of competition
Potential for price escalation
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.6 million to SIKORSKY AIRCRAFT CORPORATION. BLADE,ROTARY WING, 1615-01-546-1148 180 EACH

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 $33.6 million.

What is the period of performance?

Start: 2019-12-04. End: 2023-11-09.

What is the historical spending pattern for this specific part or similar parts with Sikorsky Aircraft Corporation?

Analyzing historical spending patterns for this specific part or similar components procured from Sikorsky Aircraft Corporation is crucial for understanding value. Without access to historical contract data, it's difficult to ascertain if the current $33.6 million award represents an increase or decrease in price compared to previous procurements. A trend of increasing prices without corresponding improvements in quality or quantity could indicate a lack of competitive pressure. Further investigation into past solicitations and awards for these rotary wing parts would be necessary to establish a baseline and identify any significant deviations.

What justification was provided for the sole-source award, and were alternative suppliers ever considered?

The justification for a sole-source award typically centers on factors such as unique capabilities, proprietary technology, or urgent and compelling needs where competition is not feasible. For this contract, the justification would need to detail why Sikorsky Aircraft Corporation is the only viable source for these specific rotary wing parts. It is essential to understand if a market research was conducted to identify potential alternative suppliers and if any were deemed unsuitable. The absence of a competitive process suggests that either no other capable suppliers exist, or the government did not adequately explore the possibility of competition, which could lead to suboptimal pricing for taxpayers.

How does the per-unit cost of these parts compare to industry benchmarks or similar government contracts?

Determining the per-unit cost benchmark for these rotary wing parts is challenging without specific part numbers and detailed specifications. However, the total award of $33.6 million for 180 units implies a significant cost per unit. To assess value for money, this per-unit cost should be benchmarked against similar components purchased by the Department of Defense or other government agencies, ideally through competitive contracts. If this sole-source award's per-unit cost is substantially higher than comparable competitively procured items, it raises concerns about the efficiency of the procurement and potential overspending by the government.

What are the potential risks associated with relying on a single supplier for critical aircraft components?

Relying on a single supplier, like Sikorsky Aircraft Corporation in this case, for critical rotary wing parts introduces several risks. Firstly, there's a risk of supply chain disruption if the sole provider experiences production issues, labor strikes, or financial instability. Secondly, the lack of competition can lead to price escalation over time, as the government has limited leverage to negotiate better terms. Thirdly, it may stifle innovation, as the supplier may have less incentive to invest in process improvements or alternative solutions. Finally, it creates a dependency that could be problematic if the parts are essential for national security operations.

What is the expected lifespan and criticality of these rotary wing parts, and how does that influence the contract's value?

The expected lifespan and criticality of these rotary wing parts are key factors in evaluating the contract's overall value and risk. If these parts are high-wear items with short lifespans or are absolutely essential for the safe and effective operation of critical aircraft, then ensuring a reliable supply chain is paramount. In such cases, the government might accept a higher price or a sole-source arrangement to guarantee availability. However, if the parts have a long lifespan and are not mission-critical, the justification for a sole-source award at a potentially higher cost becomes weaker, suggesting potential overpayment for less essential components.

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: $33,598,276

Exercised Options: $33,598,276

Current Obligation: $33,598,276

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $135,948

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX15D9423

IDV Type: IDC

Timeline