Department of Defense awards $835.5M contract to Sikorsky Aircraft Corporation for aeronautical system manufacturing

Contract Overview

Contract Amount: $18,952,903 ($19.0M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2005-11-22

End Date: 2011-01-31

Contract Duration: 1,896 days

Daily Burn Rate: $10.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200602!000260!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CF002 !A!N! !N! ! !20051122!20101031!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74260!001!09!STRATFORD !FAIRFIELD !CONN !+000013784578!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334511!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!N!J!1!001!N!1G!A!N!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $19.0 million to SIKORSKY AIRCRAFT CORPORATION for work described as: 200602!000260!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CF002 !A!N! !N! ! !20051122!20101031!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74260!001!09!STRATFORD !FAIR… Key points: 1. Contract awarded for manufacturing of aeronautical system components, indicating a need for specialized parts. 2. The contract value of $835.5 million over approximately 5 years suggests a significant, long-term requirement. 3. Awarded as 'Not Competed', raising questions about potential cost efficiencies and market exploration. 4. The contractor, Sikorsky Aircraft Corporation, is a known entity in the aerospace industry, suggesting established capabilities. 5. The contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code, highlighting its technical focus. 6. The firm fixed-price contract type aims to transfer risk to the contractor, but requires careful oversight to ensure value.

Value Assessment

Rating: fair

The contract value of $835.5 million for a period of approximately 5 years equates to roughly $167 million annually. Without specific details on the deliverables, it is challenging to benchmark this against similar contracts. However, the 'Not Competed' nature of the award suggests that a thorough price comparison with other potential suppliers may not have occurred, potentially impacting the overall value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'Not Competed' procedure, which typically means it was a sole-source award. This implies that only one contractor was considered capable of fulfilling the requirement, or that specific circumstances justified bypassing a competitive bidding process. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: A sole-source award means taxpayers may not be receiving the most competitive pricing available in the market. Without a competitive process, there is less pressure on the contractor to offer cost savings.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically the Army, which will receive critical aeronautical system components. The services delivered involve the manufacturing and supply of specialized aircraft accessories and components. The geographic impact is centered in Connecticut, where Sikorsky Aircraft Corporation is located, potentially supporting local jobs and the regional economy. Workforce implications include the potential for skilled manufacturing jobs in aerospace engineering and production at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Potential for contractor lock-in due to specialized nature of components.
Limited transparency in pricing due to sole-source award.

Positive Signals

Award to an established aerospace manufacturer (Sikorsky Aircraft Corporation) suggests a high likelihood of technical capability.
Firm Fixed Price contract type provides cost certainty if managed effectively.
Contract duration of nearly 5 years indicates a stable, long-term need for these components.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft components and systems. The NAICS code 334511 covers a niche market for specialized instruments and systems. The overall market for aerospace manufacturing is substantial, driven by both defense and commercial demand. This contract represents a significant portion of spending within this specific sub-sector for the Department of the Army.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. Given the nature of the award and the prime contractor, it is unlikely that significant subcontracting opportunities for small businesses were mandated or highlighted in this specific award action. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a firm fixed-price contract, oversight would focus on ensuring timely delivery of specified components that meet quality standards. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Aircraft Procurement
Army Aviation Systems
Aerospace Component Manufacturing
Navigation and Guidance Systems

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns if contractor underestimates complexity.
Limited transparency on specific component details and justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.0 million to SIKORSKY AIRCRAFT CORPORATION. 200602!000260!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !W15P7T06CF002 !A!N! !N! ! !20051122!20101031!835551474!835551474!001344142!N!SIKORSKY AIRCRAFT CORPORATION !6900 MAIN STREET !STRATFORD !CT!06615!74260!001!09!STRATFORD !FAIRFIELD !CONN !+000013784578!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334511!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is SIKORSKY AIRCRAFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $19.0 million.

What is the period of performance?

Start: 2005-11-22. End: 2011-01-31.

What specific aeronautical system components are being manufactured under this contract, and what is their intended use?

The data indicates the contract is for 'MSL AIRCRAFT ACCESSORIES AND COMPONENTS' under NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing). While the exact components are not detailed, they are described as accessories and parts for aircraft systems. Given the contractor (Sikorsky Aircraft Corporation) and the awarding agency (Department of the Army), these components are likely critical for military aviation platforms, potentially including helicopters or other aircraft used for reconnaissance, transport, or combat support. The specific use would be tied to the operational needs of Army aviation units.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The provided data states the contract was 'NOT COMPETED'. This typically occurs when only one responsible source is available, or when an exception to the Competition in Contracting Act applies. Reasons could include the unique capabilities of Sikorsky Aircraft Corporation, proprietary technology, urgent and compelling needs where competition is not feasible, or if the contract is a follow-on to a previous sole-source award where switching contractors would be prohibitively expensive or technically disruptive. Without further documentation from the agency, the precise justification remains undisclosed.

How does the annual value of this contract compare to other similar contracts for aircraft components awarded by the Department of Defense?

The total award value is $835,551,474 over approximately 60 months (from Nov 2005 to Oct 2010), averaging about $167 million per year. Benchmarking this requires access to a broader dataset of DoD contracts for similar components. However, for major defense contractors like Sikorsky, annual contract values in the hundreds of millions are not uncommon for significant production runs or system development. The 'fair' rating suggests that while the value is substantial, its alignment with market rates and specific deliverables needs closer scrutiny, especially given the lack of competition.

What is Sikorsky Aircraft Corporation's track record with the federal government, particularly with the Department of Defense?

Sikorsky Aircraft Corporation, now part of Lockheed Martin, has a long and extensive history of contracting with the U.S. federal government, particularly the Department of Defense. They are a major manufacturer of helicopters and other aerospace products for military applications, including the Black Hawk, Seahawk, and Pave Hawk models. Their track record includes numerous large-scale production, modification, and support contracts. This specific contract, awarded in 2005, aligns with their core business of providing advanced aircraft and components to military branches.

What are the potential risks associated with a firm fixed-price contract for complex aerospace components?

While firm fixed-price (FFP) contracts aim to provide cost certainty and shift risk to the contractor, they carry specific risks for complex aerospace components. If the contractor underestimates costs, they may face financial losses, potentially leading to quality compromises or even contract termination. Conversely, if the initial price is too high due to inadequate cost analysis or lack of competition, the government may overpay. For complex systems, unforeseen technical challenges or material cost fluctuations can strain the FFP structure, requiring careful negotiation and oversight to ensure both parties fulfill their obligations without compromising the end product's integrity or value.

What is the historical spending trend for similar aeronautical system manufacturing contracts by the Department of the Army?

Historical spending on aeronautical system manufacturing by the Department of the Army is substantial and fluctuates based on modernization programs, operational tempo, and defense budgets. Contracts under NAICS code 334511, which includes search, detection, navigation, and guidance systems, represent a significant but specialized segment. Over the years, the Army has consistently invested in advanced avionics, sensors, and structural components to maintain and upgrade its vast fleet of aircraft. Spending patterns are influenced by geopolitical events, technological advancements, and strategic defense reviews, often involving multi-year procurement contracts for major systems.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument 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: RTX Corp (UEI: 001344142)

Address: 6900 MAIN STREET, STRATFORD, CT, 03

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline