DoD Awards $11.6B for 916 H-60 Helicopters Over 5 Years, Lacking Competition

Contract Overview

Contract Amount: $11,602,480,135 ($11.6B)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2012-06-06

End Date: 2023-07-21

Contract Duration: 4,062 days

Daily Burn Rate: $2.9M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MULTI SERVICE, 5 YR, MULTI-YR CONTRACT FOR H-60 HELICOPTERS. FY2012 FY2016 PRODUCTION CONTRACT FOR ARMY/NAVY/FMS UH/HH/MH-60 HELICOPTERS TO INCLUDE PROCUREMENT OF UP TO 916 EACH AIRCRAFT AND RELATED SUPPORT, SERVICES, SYSTEMS/PROJECT MANAGEMENT, PUBLICATIONS, AND TECHNICAL DATA. FMS COUNTRIES INCLUDE SAUDI ARABIAN NATIONAL GUARD (SANG), TAIWAN, THAILAND AND ROYAL AUSTRALIAN NAVY (RAN).

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $11.60 billion to SIKORSKY AIRCRAFT CORPORATION for work described as: MULTI SERVICE, 5 YR, MULTI-YR CONTRACT FOR H-60 HELICOPTERS. FY2012 FY2016 PRODUCTION CONTRACT FOR ARMY/NAVY/FMS UH/HH/MH-60 HELICOPTERS TO INCLUDE PROCUREMENT OF UP TO 916 EACH AIRCRAFT AND RELATED SUPPORT, SERVICES, SYSTEMS/PROJECT MANAGEMENT, PUBLICATIONS, AND TECHNICAL DATA. … Key points: 1. Significant investment in critical rotary-wing aircraft for multiple branches and allies. 2. Sole-source nature raises concerns about price discovery and potential overspending. 3. Long-term contract duration (5 years) could limit flexibility and market responsiveness. 4. Inclusion of Foreign Military Sales (FMS) indicates international reliance on U.S. defense platforms.

Value Assessment

Rating: questionable

The contract value of $11.6 billion for up to 916 aircraft is substantial. Without competitive bidding, it's difficult to benchmark pricing against similar contracts or market rates, raising questions about value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Sikorsky Aircraft Corporation. The lack of competition limits price discovery and may result in higher costs for the government.

Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these essential aircraft and their support services.

Public Impact

Ensures continued availability of vital H-60 helicopters for U.S. Army, Navy, and allied forces. Supports critical missions including troop transport, search and rescue, and special operations. Potential for job creation and economic impact within the aerospace manufacturing sector. Foreign Military Sales component strengthens international partnerships and interoperability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Sole-Source Award
Long-Term Contract

Positive Signals

Critical Asset Procurement
Multi-Service Support
International Sales

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a high-value segment of the defense industrial base. Spending benchmarks for similar large-scale, sole-source aircraft procurements are difficult to establish due to their unique nature.

Small Business Impact

The data does not indicate specific provisions or subcontracting goals for small businesses within this large, sole-source contract. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The long duration and sole-source nature of this contract warrant robust oversight to ensure cost control and performance. Regular reviews of contract modifications and pricing are essential for accountability.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of Competition
Potential for Cost Overruns
Limited Flexibility
Long-Term Dependency on Single Supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.60 billion to SIKORSKY AIRCRAFT CORPORATION. MULTI SERVICE, 5 YR, MULTI-YR CONTRACT FOR H-60 HELICOPTERS. FY2012 FY2016 PRODUCTION CONTRACT FOR ARMY/NAVY/FMS UH/HH/MH-60 HELICOPTERS TO INCLUDE PROCUREMENT OF UP TO 916 EACH AIRCRAFT AND RELATED SUPPORT, SERVICES, SYSTEMS/PROJECT MANAGEMENT, PUBLICATIONS, AND TECHNICAL DATA. FMS COUNTRIES INCLUDE SAUDI ARABIAN NATIONAL GUARD (SANG), TAIWAN, THAILAND AND ROYAL AUSTRALIAN NAVY (RAN).

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 $11.60 billion.

What is the period of performance?

Start: 2012-06-06. End: 2023-07-21.

What is the justification for awarding this contract sole-source, and what measures are in place to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, for a platform like the H-60, which has a long production history, the rationale needs careful scrutiny. Robust oversight, including independent cost analyses and regular price reasonableness reviews, is crucial to mitigate the risks associated with non-competitive procurement and ensure taxpayer funds are used efficiently.

How does the lack of competition impact the long-term sustainment costs of the H-60 fleet?

A sole-source award for initial production can set a precedent for sustainment and spare parts, potentially leading to higher long-term costs. Without competitive pressure, the incumbent contractor may have less incentive to offer competitive pricing for maintenance, repair, and overhaul services, as well as for future upgrades and modifications. This could result in a sustained cost premium for the government over the operational life of the aircraft.

What is the strategic advantage of including Foreign Military Sales (FMS) in a sole-source contract, and does it affect the U.S. military's procurement priorities?

Including FMS in a sole-source contract can leverage economies of scale, potentially lowering the per-unit cost for the U.S. military by increasing the total production volume. It also strengthens alliances and interoperability. However, it's essential that U.S. military requirements remain the priority and are not compromised by FMS demands. The contract structure should clearly delineate priorities and delivery schedules to safeguard U.S. readiness.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ10R0010

Offers Received: 1

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: $13,057,891,753

Exercised Options: $11,602,480,135

Current Obligation: $11,602,480,135

Actual Outlays: $20,491,441

Subaward Activity

Number of Subawards: 1377

Total Subaward Amount: $549,390,199

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline