Department of Defense awards $28.8M contract for aircraft parts, with limited competition

Contract Overview

Contract Amount: $28,852,454 ($28.9M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2023-04-26

End Date: 2028-12-25

Contract Duration: 2,070 days

Daily Burn Rate: $13.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NOUN: SPINDLE,HEAD,ROTARY NSN: 1615016943180 PN: 70102-08200-073

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to SIKORSKY AIRCRAFT CORPORATION for work described as: NOUN: SPINDLE,HEAD,ROTARY NSN: 1615016943180 PN: 70102-08200-073 Key points: 1. Contract value of $28.8 million over its period of performance. 2. Awarded to Sikorsky Aircraft Corporation, a significant player in the aerospace industry. 3. Classified as 'NOT COMPETED', indicating potential for higher costs and limited market engagement. 4. The contract spans nearly 5 years, suggesting a long-term need for these parts. 5. The primary sector is Defense, specifically focusing on aircraft parts manufacturing. 6. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 7. The award was a Delivery Order under an existing contract vehicle.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific part details and market comparisons. However, the 'NOT COMPETED' status raises concerns about whether the government secured the best possible price. Firm Fixed Price contracts can be advantageous, but the lack of competition limits the ability to assess if the pricing is competitive against other potential suppliers or alternative solutions. Further analysis would require understanding the criticality of the part and the availability of alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT COMPETED' basis, meaning it was not openly solicited. This suggests that either a specific justification for sole-source procurement was made, or it was a delivery order against an existing contract where competition may have been limited or previously addressed. The lack of open competition means that multiple potential suppliers were not evaluated, potentially impacting price discovery and the government's ability to leverage market forces.

Taxpayer Impact: The absence of full and open competition for this $28.8 million contract means taxpayers may not have benefited from the most competitive pricing available in the market. This approach can lead to higher overall spending compared to scenarios with robust bidding.

Public Impact

The primary beneficiaries are the U.S. military units relying on Sikorsky aircraft for operational readiness. The contract ensures the supply of critical 'Other Aircraft Parts and Auxiliary Equipment'. The geographic impact is primarily within Connecticut, where Sikorsky Aircraft Corporation is based. Workforce implications include continued employment for manufacturing and support staff at Sikorsky.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing for taxpayers.
Sole-source awards can reduce transparency and accountability in the procurement process.
Dependence on a single supplier for critical parts can create supply chain risks.

Positive Signals

Firm Fixed Price contract structure shifts cost overrun risks to the contractor.
Award to an established contractor like Sikorsky suggests a focus on reliability and existing expertise.
The contract duration indicates a stable, long-term supply chain for essential aircraft components.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the broader aerospace and defense industry. This industry is characterized by high barriers to entry, significant R&D investment, and stringent quality control requirements. Spending in this sector is heavily influenced by defense budgets and the operational tempo of military aviation. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar aircraft components.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large corporation (Sikorsky Aircraft Corporation), there are no direct subcontracting implications for small businesses stemming from this specific award mechanism. The primary focus is on the prime contractor's capabilities, rather than fostering small business participation through set-asides.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA) and the Defense Logistics Agency (DLA), responsible for contract administration and ensuring delivery of goods. The 'NOT COMPETED' status suggests a justification was likely provided and reviewed internally within the Department of Defense. Transparency is limited due to the lack of public competition, and Inspector General oversight would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Aircraft Component Procurement
Defense Logistics Agency Contracts
Sikorsky Aircraft Support
Firm Fixed Price Awards
Sole Source Defense Contracts

Risk Flags

Lack of Competition
Potential for Overpricing
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to SIKORSKY AIRCRAFT CORPORATION. NOUN: SPINDLE,HEAD,ROTARY NSN: 1615016943180 PN: 70102-08200-073

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 $28.9 million.

What is the period of performance?

Start: 2023-04-26. End: 2028-12-25.

What is the specific nature of the 'NOUN: SPINDLE,HEAD,ROTARY' and its criticality to Sikorsky aircraft operations?

The provided data identifies the item as 'NOUN: SPINDLE,HEAD,ROTARY' with a specific NSN (1615016943180) and Part Number (70102-08200-073). While the exact function isn't detailed, its classification under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' and the substantial contract value suggest it is a critical component for the operational integrity and safety of Sikorsky helicopters. These components often relate to rotor systems, engine assemblies, or flight control mechanisms, requiring high precision and reliability. The 'NOT COMPETED' status further implies that Sikorsky may be the sole or primary manufacturer with the necessary technical data, tooling, and expertise to produce this specific part, making it essential for maintaining the existing fleet.

What justification was likely provided for the 'NOT COMPETED' award status?

The 'NOT COMPETED' status typically arises from specific justifications outlined in federal acquisition regulations. Common reasons include: proprietary data or unique capabilities held by only one source (like Sikorsky for their own aircraft parts), urgent and compelling needs where competition is impractical, or if the contract is a follow-on effort to a previously competed contract where only the original awardee possesses the necessary knowledge or infrastructure. Given Sikorsky's role as an aircraft manufacturer, it's probable that this award relates to proprietary parts or specialized knowledge integral to their helicopter designs, making competition infeasible or excessively costly due to the need for extensive technical transfer and requalification.

How does the Firm Fixed Price (FFP) contract type mitigate risk for the government in this sole-source scenario?

A Firm Fixed Price (FFP) contract obligates the contractor (Sikorsky) to perform the work specified for a single, agreed-upon price. This structure is generally favorable to the government as it shifts the risk of cost overruns entirely to the contractor. If Sikorsky's costs increase due to material prices, labor, or unforeseen production issues, the government is not obligated to pay more than the agreed-upon price. While this is beneficial, the lack of competition in a sole-source FFP contract means the government might still be paying a higher price than if multiple bidders had competed, as the contractor may price in a risk premium for the lack of competitive pressure.

What is the historical spending pattern for similar aircraft parts by the Department of Defense or Defense Logistics Agency?

Historical spending on similar aircraft parts by the Department of Defense (DoD) and the Defense Logistics Agency (DLA) is substantial, reflecting the vast and complex needs of maintaining a global military aviation fleet. The DLA, in particular, manages a massive inventory of spare parts, components, and sustainment services across all military branches. While specific data for 'SPINDLE,HEAD,ROTARY' parts isn't publicly itemized, the DoD procures billions of dollars annually in aircraft components, engines, and related services. Spending patterns often show a mix of competitive bids for standardized parts and sole-source or limited-competition awards for proprietary or highly specialized components, similar to this Sikorsky contract. Analyzing past DLA or DoD spending on helicopter parts from major manufacturers like Sikorsky would provide context on typical award values and contract types.

What are the potential long-term implications of relying on Sikorsky Aircraft Corporation for these specific parts?

The long-term implications of relying on Sikorsky Aircraft Corporation for these specific parts are multifaceted. On the positive side, it ensures a consistent and potentially high-quality supply chain for critical components, leveraging Sikorsky's established expertise and direct knowledge of their aircraft systems. This can contribute to the sustained readiness and operational capability of the helicopter fleet. However, the 'NOT COMPETED' status raises concerns about long-term cost efficiency and potential vendor lock-in. Over time, the absence of competition could lead to escalating prices if not carefully managed through contract reviews and negotiations. It also highlights a potential vulnerability in the supply chain should Sikorsky face production challenges or strategic shifts, as alternative sources may not exist or be readily available.

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: $28,852,454

Exercised Options: $28,852,454

Current Obligation: $28,852,454

Actual Outlays: $3,307,065

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $566,462

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