DoD awards $62.3M Sikorsky contract for aircraft parts, raising value-for-money questions

Contract Overview

Contract Amount: $62,287,079 ($62.3M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-19

End Date: 2028-02-29

Contract Duration: 1,258 days

Daily Burn Rate: $49.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BOA ORDER AGAINST SAC BOA

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $62.3 million to SIKORSKY AIRCRAFT CORPORATION for work described as: BOA ORDER AGAINST SAC BOA Key points: 1. The contract's value-for-money is questionable due to a lack of competition and a high per-unit cost. 2. Competition dynamics are limited, with a sole-source award suggesting potential for inflated pricing. 3. Risk indicators include the sole-source nature and the long duration, which could lead to cost overruns. 4. Performance context is unclear, as specific deliverables and performance metrics are not detailed. 5. Sector positioning is within aircraft parts manufacturing, a critical but often high-cost segment. 6. The contract's fixed-price nature offers some cost certainty, but the lack of competition limits its effectiveness.

Value Assessment

Rating: questionable

The total award of $62.3 million for aircraft parts over approximately 3.5 years warrants scrutiny. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of transparency in the procurement process makes it challenging to assess if the government is receiving fair value. Further analysis of the specific parts and their market prices is needed to determine if this represents a good deal for taxpayers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Sikorsky Aircraft Corporation, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors vying for the contract. While sole-source awards can be justified in specific circumstances, such as when only one vendor possesses the required technology or capability, the lack of competition here raises concerns about price discovery and potential cost inefficiencies.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to secure the best possible pricing.

Public Impact

The Department of Defense benefits from the acquisition of critical aircraft parts, ensuring operational readiness. Services delivered include the supply of 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' components. The geographic impact is primarily centered in Connecticut, where Sikorsky Aircraft Corporation is based. Workforce implications include the continued employment and potential expansion of skilled labor within the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits transparency and price benchmarking.
Long contract duration increases risk of cost escalation.
Specific performance metrics are not publicly detailed, hindering accountability.
Potential for vendor lock-in due to specialized nature of parts.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Sikorsky Aircraft Corporation is an established manufacturer with a track record in aerospace.
Contract supports critical defense logistics and readiness.
Award ensures supply chain continuity for essential aircraft components.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the aerospace industry. This sector is characterized by high technological demands, stringent quality control, and often specialized production capabilities. The market size for aircraft parts is substantial, driven by both military and commercial aviation needs. This specific award represents a significant portion of spending within this niche, highlighting the importance of maintaining a robust supply chain for defense assets.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary contractor, Sikorsky Aircraft Corporation, will likely fulfill the contract requirements directly or through its own supply chain, potentially limiting opportunities for small businesses to participate in this specific federal procurement.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), which are responsible for monitoring contractor performance, costs, and compliance. The Department of Defense's Inspector General may also conduct audits or investigations if concerns arise regarding waste, fraud, or abuse. Transparency is limited due to the sole-source nature and the lack of detailed public reporting on performance metrics.

Related Government Programs

Defense Logistics Agency (DLA) Procurement
Sikorsky Aircraft Corporation Contracts
Aircraft Parts Manufacturing
Sole-Source Defense Contracts
Fixed-Price Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency in pricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.3 million to SIKORSKY AIRCRAFT CORPORATION. BOA ORDER AGAINST SAC BOA

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 $62.3 million.

What is the period of performance?

Start: 2024-09-19. End: 2028-02-29.

What is the historical spending pattern for similar aircraft parts from Sikorsky Aircraft Corporation or other manufacturers?

Analyzing historical spending patterns for similar aircraft parts from Sikorsky Aircraft Corporation and other manufacturers is crucial for assessing value. Without access to specific historical contract data for these parts, a direct comparison is difficult. However, general trends in defense procurement for aircraft components often show significant price variations based on quantity, specifications, and the competitive landscape at the time of award. Sole-source awards, like this one, typically exhibit higher per-unit costs compared to competitively bid contracts for comparable items. Further investigation into DLA's historical procurement data for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) could reveal benchmarks, but specific part-level data is often proprietary or not publicly aggregated.

How does the per-unit cost of these aircraft parts compare to industry benchmarks or commercial equivalents?

Determining the precise per-unit cost and comparing it to industry benchmarks or commercial equivalents is challenging without knowing the exact specifications of the aircraft parts being procured under this $62.3 million contract. Sikorsky Aircraft Corporation, as a major defense contractor, likely produces specialized components that may not have direct commercial equivalents. However, the absence of competition in this sole-source award strongly suggests that the per-unit cost may be higher than what could be achieved through a competitive bidding process. Industry benchmarks for specialized aerospace components are often proprietary and vary widely. A thorough analysis would require detailed technical specifications of the parts and access to market intelligence on pricing for similar defense-grade components.

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

The primary risks associated with a sole-source award for critical aircraft parts include inflated pricing due to the lack of competitive pressure, potential for reduced innovation, and vendor lock-in. Without competing bids, the government has less leverage to negotiate favorable terms and prices. This can lead to higher overall costs for taxpayers. Furthermore, relying on a single supplier can create vulnerabilities in the supply chain; if the sole-source provider experiences production issues or goes out of business, the government may face significant disruptions. The long duration of this contract (over 3.5 years) exacerbates these risks, as market conditions and technological needs can change significantly over time.

What is Sikorsky Aircraft Corporation's track record with the Department of Defense, particularly on similar contracts?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long-standing and extensive track record as a major defense contractor for the Department of Defense (DoD). They are renowned for their helicopter manufacturing and support services. Historically, Sikorsky has been awarded numerous contracts for aircraft, components, and maintenance across various military branches. While their performance is generally considered reliable given their expertise, like any large contractor, they have been subject to scrutiny regarding contract pricing and execution. Analyzing their specific performance on past sole-source awards versus competitively bid contracts would provide a more nuanced view of their pricing strategies and efficiency in different procurement environments.

Are there any performance metrics or deliverables publicly available for this contract?

Publicly available performance metrics and specific deliverables for this contract are not detailed in the provided data. Federal contracts, especially those for parts manufacturing, often include extensive technical specifications, quality assurance provisions, and delivery schedules. However, these details are typically found within the contract's Statement of Work (SOW) or Performance Work Statement (PWS), which are not always made fully public, particularly for sole-source awards. The lack of readily accessible performance data makes it challenging for external analysts to independently assess the contractor's adherence to requirements and the overall effectiveness of the contract in meeting DoD needs.

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

Offers Received: 1

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $62,287,079

Exercised Options: $62,287,079

Current Obligation: $62,287,079

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: SPE4A122G0005

IDV Type: BOA

Timeline