DoD's $32M Sikorsky contract for aircraft parts awarded via sole-source justification

Contract Overview

Contract Amount: $32,086,339 ($32.1M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2024-09-28

End Date: 2033-04-30

Contract Duration: 3,136 days

Daily Burn Rate: $10.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SPARES

Place of Performance

Location: STRATFORD, GREATER BRIDGEPORT County, CONNECTICUT, 06615

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $32.1 million to SIKORSKY AIRCRAFT CORPORATION for work described as: SPARES Key points: 1. Contract awarded to a single supplier suggests potential lack of competitive pressure on pricing. 2. Long contract duration (over 9 years) may indicate a need for sustained support, but also warrants scrutiny of long-term cost-effectiveness. 3. Sole-source award raises questions about the availability of alternative suppliers and potential for price escalation. 4. The contract falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' a critical but potentially specialized sector. 5. Performance context is limited without details on specific parts or services required. 6. Risk indicators include potential for vendor lock-in and limited transparency in pricing due to sole-source nature.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific part numbers or detailed service descriptions. However, the sole-source nature of the award, coupled with a long performance period, raises concerns about whether the government is achieving optimal value. Without competitive bidding, it's difficult to ascertain if the pricing reflects market rates or if there's an opportunity for cost savings through competition. Further analysis would require comparing the unit costs of specific components to similar procurements or commercial off-the-shelf prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential vendors. The justification for this approach is not provided in the data, but typically it implies that only one responsible source is capable of meeting the government's needs. This lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the best possible value.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as there is no competitive pressure to ensure the lowest possible price. This can lead to higher overall spending for the same goods or services compared to a competed contract.

Public Impact

The Department of Defense is the primary beneficiary, ensuring the continued operation and maintenance of its aircraft fleet. Services delivered likely include the supply of critical aircraft parts and potentially related support, ensuring mission readiness. The geographic impact is primarily within Connecticut, where Sikorsky Aircraft Corporation is based, but the ultimate impact is on DoD operations nationwide. Workforce implications are positive for Sikorsky's employees in Connecticut, securing jobs and continued operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Long contract duration increases the risk of price escalation over time without regular re-competition.
Lack of transparency in the justification for sole-sourcing hinders public and congressional oversight.
Dependence on a single supplier can create vulnerabilities in the supply chain.
Contract value is substantial, warranting close monitoring of performance and spending.

Positive Signals

Award to a known entity (Sikorsky) suggests a degree of reliability and established relationship.
The contract supports critical defense logistics, ensuring operational readiness.
Firm Fixed Price contract type provides cost certainty for the government, assuming the price is fair.
The contract is for aircraft parts, a necessary component for maintaining military aviation capabilities.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. This industry is characterized by high technological barriers to entry, stringent quality control requirements, and significant government procurement. The market size for defense aerospace components is substantial, driven by the ongoing need for military readiness and modernization. This contract represents a portion of the broader spending on sustainment and logistics for military aircraft.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting goals for small businesses (sb: false). This suggests that the primary contractor, Sikorsky Aircraft Corporation, is likely a large business, and the contract may not directly benefit the small business ecosystem through set-asides or mandated subcontracting. Further investigation into subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Logistics Agency. Given its sole-source nature and substantial value, robust oversight mechanisms are crucial. This includes monitoring contractor performance against delivery schedules and quality standards, as well as scrutinizing any potential price adjustments. Transparency regarding the justification for the sole-source award and the basis for the negotiated price would be essential for accountability. The Inspector General's office within the DoD would likely have jurisdiction for audits and investigations.

Related Government Programs

DoD Aircraft Maintenance and Repair
Defense Logistics Agency Procurement
Aerospace Component Manufacturing
Sole-Source Defense Contracts
Long-Term Government Support Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Potential for price escalation
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.1 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 $32.1 million.

What is the period of performance?

Start: 2024-09-28. End: 2033-04-30.

What is the specific justification provided by the Defense Logistics Agency for awarding this contract on a sole-source basis to Sikorsky Aircraft Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as "only one responsible source and no other supplies or services will satisfy agency requirements" (FAR 6.302-1) or "brand name" justifications. Without the official justification document, it is impossible to determine the precise rationale. This lack of transparency is a significant concern, as it prevents a thorough assessment of whether competitive alternatives were genuinely unavailable or if the sole-source designation was appropriate. Further inquiry with the agency would be necessary to obtain this critical information.

How does the pricing structure (Firm Fixed Price) and duration of this contract compare to similar sole-source contracts for aircraft parts within the DoD?

Comparing this Firm Fixed Price (FFP) contract's pricing and duration to similar sole-source contracts is difficult without more specific data points. FFP contracts aim to provide cost certainty, but the "fixed" price itself is subject to negotiation. The long duration (nearly 10 years) is notable and could indicate a need for long-term sustainment of specific, potentially legacy, aircraft systems where competition is limited. However, extended FFP contracts can expose the government to risk if market prices for components decrease over time, or if the initial price was not adequately benchmarked against available alternatives. A comprehensive comparison would require access to pricing data for comparable sole-source awards for similar aircraft parts, including the specific justification and negotiation details.

What are the potential risks associated with a sole-source award of this magnitude and duration for critical aircraft parts?

The primary risks associated with this sole-source award are related to cost and supply chain. Without competition, Sikorsky Aircraft Corporation faces less pressure to offer the most competitive pricing, potentially leading to higher costs for the Defense Logistics Agency and, by extension, taxpayers. The long duration increases the risk of price escalation over the contract's life, especially if market conditions change. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; any disruption at Sikorsky could significantly impact the DoD's ability to maintain its aircraft fleet. There's also a risk of vendor lock-in, making it difficult and costly to switch suppliers in the future, even if better options emerge.

What performance metrics or oversight mechanisms are likely in place to ensure Sikorsky Aircraft Corporation delivers high-quality parts and meets delivery schedules under this contract?

While specific metrics are not detailed, standard DoD contracting practices would necessitate performance monitoring. The contract likely includes clauses for quality assurance, requiring parts to meet stringent military specifications. Delivery schedules would be tracked, with potential penalties for delays. The Defense Contract Management Agency (DCMA) would typically oversee contractor performance, conducting inspections and audits. Given the sole-source nature, the agency might place even greater emphasis on performance verification to mitigate risks associated with the lack of competition. Reporting requirements on production status and quality control would also be expected.

How does this contract align with the Defense Logistics Agency's broader strategy for aircraft parts procurement and sustainment?

This contract appears to align with the DLA's mission to provide logistics support for the DoD, specifically focusing on sustainment of aviation assets. Awarding a long-term contract for critical parts suggests a strategic decision to ensure a stable supply chain for essential components, potentially for aging aircraft systems where parts may be less common or require specialized manufacturing. The sole-source nature might reflect a situation where Sikorsky is the original equipment manufacturer or possesses unique capabilities essential for these specific parts, making competition impractical or detrimental to readiness. The DLA likely views this as a necessary measure to maintain operational capability, balancing the cost implications against the strategic importance of uninterrupted supply.

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: $32,086,339

Exercised Options: $32,086,339

Current Obligation: $32,086,339

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $41,005

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