DoD awards $54.4M for rotary wing parts, with no competition and a long performance period

Contract Overview

Contract Amount: $54,356,354 ($54.4M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2023-09-18

End Date: 2029-01-30

Contract Duration: 1,961 days

Daily Burn Rate: $27.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BLADE, ROTARY WING

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $54.4 million to SIKORSKY AIRCRAFT CORPORATION for work described as: BLADE, ROTARY WING Key points: 1. The contract's value is substantial, indicating significant demand for these specialized aircraft components. 2. The lack of competition raises concerns about potential overpricing and limited innovation. 3. The extended performance period of nearly 2 years presents a long-term commitment for the agency. 4. The contract is for parts supporting rotary wing aircraft, a critical component of military operations. 5. The fixed-price nature of the contract shifts some risk to the contractor, but price justification is key without competition.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and specific part details. However, the $54.4 million award for aircraft parts, especially with a sole-source designation, warrants scrutiny. Without comparative pricing from other vendors, it's difficult to ascertain if the price reflects fair market value. The extended duration of the contract also means that any potential overpricing will have a prolonged impact.

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 considered. This significantly limits price discovery and the potential for cost savings that typically arise from a competitive bidding process. The absence of multiple bidders suggests that either no other qualified sources were identified or the agency opted not to pursue a broader competition.

Taxpayer Impact: Taxpayers may be paying a premium for these parts due to the absence of competitive pressure. The government has fewer options to negotiate better terms or explore alternative, potentially more cost-effective suppliers.

Public Impact

The primary beneficiaries are the U.S. Army and potentially other branches relying on Sikorsky rotary wing aircraft. The contract ensures the continued availability of critical spare parts for maintaining operational readiness of helicopters. The geographic impact is primarily within Connecticut, where Sikorsky Aircraft Corporation is based, potentially supporting local jobs. The contract supports the defense industrial base, specifically the manufacturing and supply chain for military aircraft components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Long contract duration could lock in potentially unfavorable terms.
Sole-source awards reduce transparency in pricing.
Dependence on a single supplier can create supply chain risks.

Positive Signals

Ensures availability of critical parts for national defense.
Supports a key defense contractor and its supply chain.
Fixed-price contract provides some cost certainty for the government.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry code (NAICS 336413). Spending in this area is crucial for maintaining military readiness. Comparable spending benchmarks are difficult to establish without more specific part data, but the overall defense budget allocates billions to aircraft sustainment and parts.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the sole-source nature and the likely specialized requirements for rotary wing aircraft parts, it is improbable that small businesses would be primary recipients or subcontractors unless they are part of Sikorsky's established supply chain. Further investigation into subcontracting plans would be needed to assess small business impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The Defense Contract Management Agency (DCMA) would likely be involved in monitoring performance and compliance. Transparency is limited by the sole-source award, but contract modifications and payment reports would be subject to standard government oversight. Inspector General reviews could be initiated if specific concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Rotary Wing Aircraft Maintenance
Defense Logistics Agency Procurement
Aircraft Parts Manufacturing
Sikorsky Aircraft Support Contracts
Military Helicopter Sustainment

Risk Flags

Sole-source award
Long contract duration
Lack of competitive bidding
Potential for price escalation without competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.4 million to SIKORSKY AIRCRAFT CORPORATION. BLADE, ROTARY WING

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 $54.4 million.

What is the period of performance?

Start: 2023-09-18. End: 2029-01-30.

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

Analyzing historical spending with Sikorsky Aircraft Corporation for similar rotary wing parts is crucial for understanding value. Without access to specific past contract numbers or detailed part descriptions, a precise historical comparison is difficult. However, the Department of Defense, particularly through the Defense Logistics Agency, frequently awards contracts for aircraft parts. Sikorsky, as a major helicopter manufacturer, has a long history of receiving such awards. Trends in defense spending on aircraft sustainment, coupled with any publicly available data on previous sole-source awards to Sikorsky for comparable components, would provide context. A significant increase in price or volume over time, especially without a competitive justification, would be a red flag.

What specific parts are covered under this $54.4 million contract, and how critical are they to aircraft operation?

The provided data indicates the contract is for 'BLADE, ROTARY WING' parts. This suggests components such as main rotor blades, tail rotor blades, or associated hardware critical for helicopter flight. The criticality of these parts is extremely high; rotor blades are fundamental to generating lift and control. Any deficiency or unavailability of these components would directly impact the operational readiness and safety of the affected rotary wing aircraft fleets. Understanding the specific part numbers and their role within different helicopter models (e.g., Black Hawk, Chinook, if applicable) would allow for a more precise assessment of their importance and the potential consequences of supply disruptions.

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

Sole-source awards require a formal justification, typically documented under specific federal acquisition regulations (e.g., FAR Part 6). Common justifications include unique capabilities, proprietary technology, or the unavailability of other sources. For Sikorsky Aircraft Corporation, the justification might stem from proprietary designs of their rotor blade technology or a determination that only Sikorsky possesses the necessary technical data, manufacturing capabilities, or certifications to produce these specific parts. The agency is generally required to conduct market research to ensure no other responsible sources exist or can be made available. The specific justification document for this contract would detail the rationale and any steps taken to explore alternatives, which is essential for evaluating the necessity of a sole-source approach.

How does the $54.4 million contract value compare to industry benchmarks for similar aircraft parts?

Comparing the $54.4 million contract value to industry benchmarks for similar aircraft parts is challenging without granular data on the specific components, quantities, and their associated market prices. However, the aerospace and defense sector, particularly for military-grade components, often commands higher prices due to stringent quality control, testing requirements, and specialized manufacturing processes. Sikorsky Aircraft Corporation is a major original equipment manufacturer (OEM), and OEM parts typically carry a premium over aftermarket alternatives. If this contract is for OEM-specified blades, the price might be within a reasonable range for such specialized, high-reliability components. However, the lack of competition prevents a direct market comparison to ascertain if this price is competitive relative to what other qualified suppliers might offer.

What are the potential risks associated with a sole-source award for critical aircraft components like rotor blades?

The primary risks associated with a sole-source award for critical components like rotor blades include potential price inflation, reduced innovation, and supply chain vulnerability. Without competition, the government lacks leverage to negotiate the lowest possible price, potentially leading to overspending. The sole supplier may have less incentive to invest in process improvements or cost-saving innovations. Furthermore, reliance on a single source creates a significant risk; any disruption at Sikorsky Aircraft Corporation (e.g., production issues, labor disputes, natural disasters) could directly impact the availability of these essential parts, jeopardizing military readiness. This also limits the government's ability to switch suppliers if performance issues arise.

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 Corporation

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: $54,356,354

Exercised Options: $54,356,354

Current Obligation: $54,356,354

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $7,405,050

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