DoD awards $40.2M contract for aircraft parts, with limited competition and potential value concerns

Contract Overview

Contract Amount: $40,256,437 ($40.3M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2022-12-07

End Date: 2026-05-01

Contract Duration: 1,241 days

Daily Burn Rate: $32.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SPARES

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $40.3 million to SIKORSKY AIRCRAFT CORPORATION for work described as: SPARES Key points: 1. Contract awarded through a sole-source justification, raising questions about price competitiveness. 2. Significant duration of the contract (over 3 years) suggests a long-term need for these parts. 3. The award is a delivery order under a larger contract, indicating a phased approach to procurement. 4. Lack of competition may lead to higher costs for taxpayers. 5. The specific part number (336413) points to a specialized component within aircraft maintenance. 6. Contractor has a history of significant federal awards, suggesting established performance. 7. The firm-fixed-price structure aims to control costs, but initial competition is key.

Value Assessment

Rating: questionable

Benchmarking the value of this specific delivery order is challenging without knowing the total contract value and the pricing of comparable parts. The sole-source nature of this award raises concerns about whether the government secured the best possible price. Without competitive bids, it's difficult to assess if the pricing is aligned with market rates or if it reflects a premium due to limited options. Further analysis of historical pricing for similar components and the contractor's pricing trends would be necessary for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor was solicited. This approach is typically used when only one responsible source is available or when there's a compelling justification for not seeking competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive process, potentially impacting the final price paid by the government.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the downward pressure that competition typically provides. This limits the government's ability to negotiate the most favorable terms and pricing.

Public Impact

The Department of Defense benefits from the continued availability of critical aircraft parts for its fleet. This contract supports the operational readiness and maintenance of military aircraft. The primary beneficiaries are the military personnel who rely on these aircraft for their missions. The contract's impact is primarily within the defense sector, ensuring the functionality of aviation assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs.
Lack of transparency in the justification for sole-sourcing requires further scrutiny.
Long contract duration without competitive re-evaluation could lead to sustained higher prices.

Positive Signals

Firm-fixed-price contract type helps to cap costs for the government.
Awarding agency (DLA) specializes in logistics, suggesting efficient management of parts.
Contractor is a known entity in defense aviation, implying a level of reliability.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components is often characterized by high barriers to entry due to technical expertise, certifications, and intellectual property. While the overall aerospace market is substantial, the segment for specific military aircraft parts can be more concentrated, sometimes leading to limited competition for unique or legacy systems. Benchmarking spending in this niche requires comparing it to other contracts for similar specialized aircraft components within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor, Sikorsky Aircraft Corporation, is a large business. There is no explicit information provided regarding subcontracting plans or opportunities for small businesses within this specific delivery order. Further investigation into the prime contractor's subcontracting history and goals would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA), which is responsible for procuring and managing supplies for the U.S. military. As a delivery order under a larger contract, it likely adheres to the oversight mechanisms established for the parent contract. Transparency regarding the sole-source justification and the pricing structure would be key areas for oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair
Military Aircraft Parts Procurement
Defense Logistics Agency Contracts
Sikorsky Aircraft Corporation Contracts

Risk Flags

Sole Source Justification
Potential for Overpricing
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.3 million to SIKORSKY AIRCRAFT CORPORATION. SPARES

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 $40.3 million.

What is the period of performance?

Start: 2022-12-07. End: 2026-05-01.

What is Sikorsky Aircraft Corporation's track record with the Department of Defense, particularly for aircraft parts?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long and extensive history of contracting with the Department of Defense. They are a major manufacturer of military helicopters and have also been involved in providing parts, maintenance, and support services for various aircraft platforms. Their federal contracting history includes numerous awards across different agencies, primarily the DoD, for a wide range of aviation-related products and services. Analyzing their past performance on similar contracts, including delivery timeliness, quality of parts, and adherence to cost targets, would provide valuable context for this current award. Their established presence suggests a deep understanding of military requirements and a capacity to fulfill complex orders, but also highlights their significant role in the defense supply chain.

How does the pricing of this contract compare to similar aircraft parts procured by the DoD?

Direct comparison of pricing for this specific delivery order is difficult without access to detailed pricing data and a comprehensive list of comparable parts. The fact that this was a sole-source award complicates benchmarking, as competitive pricing dynamics were absent. To assess value, one would need to compare the unit price of part number 336413 against historical prices paid by the DoD for the same part, or against prices for functionally equivalent parts from other manufacturers, if available. Furthermore, analyzing Sikorsky's pricing trends across their portfolio of DoD contracts could reveal patterns. The firm-fixed-price nature provides cost certainty, but the absence of competition means the government cannot be assured it received the lowest possible price without further detailed analysis.

What are the primary risks associated with a sole-source award for critical aircraft parts?

The primary risk associated with a sole-source award for critical aircraft parts is the potential for inflated pricing due to the lack of competition. Without competing bids, the government may pay a premium compared to what could have been achieved in an open market. Another risk is reduced innovation, as there is less incentive for the sole provider to invest in cost-saving measures or product improvements if they are guaranteed the contract. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if the sole source experiences production issues or goes out of business, the government's ability to procure these essential parts could be severely disrupted. This necessitates robust contract management and monitoring by the procuring agency.

What is the historical spending pattern for aircraft parts by the Defense Logistics Agency (DLA)?

The Defense Logistics Agency (DLA) is a major entity within the Department of Defense responsible for providing logistics support, including the procurement of a vast array of parts and equipment for all branches of the military. Historical spending patterns for aircraft parts by the DLA are substantial, often running into billions of dollars annually, reflecting the extensive needs of the U.S. military's aviation fleet. This spending encompasses a wide range of components, from raw materials and standard hardware to highly specialized and proprietary parts for various aircraft platforms. The DLA manages numerous contracts, including both competitive and sole-source awards, to ensure the availability of these critical items. Analyzing DLA's historical spending data can reveal trends in specific part categories, identify key suppliers, and highlight areas where competition is prevalent or limited.

How does the contract duration (1241 days) impact the overall value and risk assessment?

A contract duration of 1241 days (approximately 3.4 years) for aircraft parts suggests a long-term, sustained need for these components, likely tied to the operational life or maintenance schedule of specific military aircraft. From a value perspective, a longer duration can offer price stability and predictability, especially under a firm-fixed-price agreement, shielding the government from short-term market fluctuations. However, it also extends the period during which the government is committed to a particular supplier, potentially at a non-competitive price if market conditions change favorably for buyers. The risk associated with a long duration, particularly in a sole-source context, is that the government might be locked into paying above-market rates for an extended period. Conversely, it can reduce the administrative burden and cost associated with frequent re-competitions for essential, long-lifecycle items.

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: $40,256,437

Exercised Options: $40,256,437

Current Obligation: $40,256,437

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $2,310,928

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