DoD Awards $5.58 Billion Black Hawk Production Contract to Sikorsky Aircraft Corporation

Contract Overview

Contract Amount: $5,584,742,287 ($5.6B)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2017-06-22

End Date: 2025-12-31

Contract Duration: 3,114 days

Daily Burn Rate: $1.8M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: W58RGZ-17-C-0009 MY IX BLACK HAWK PRODUCTION CONTRACT AWARD.

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $5.58 billion to SIKORSKY AIRCRAFT CORPORATION for work described as: W58RGZ-17-C-0009 MY IX BLACK HAWK PRODUCTION CONTRACT AWARD. Key points: 1. Significant investment in critical military aviation assets. 2. Sole-source award raises questions about price discovery and competition. 3. Long-term contract (2017-2025) indicates sustained demand for Black Hawk helicopters. 4. Focus on aircraft manufacturing within the Defense sector.

Value Assessment

Rating: questionable

The contract's value of $5.58 billion over 8 years suggests a substantial investment. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to potential alternatives or previous contracts.

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. This lack of competition limits the government's ability to leverage market forces for potentially better pricing or innovative solutions.

Taxpayer Impact: The absence of competition may lead to higher costs for taxpayers, as there was no pressure on the contractor to offer the lowest possible price.

Public Impact

Ensures continued availability of the widely used Black Hawk utility helicopter for military operations. Supports jobs and economic activity within the aerospace manufacturing sector. Potential for follow-on contracts or modifications, extending the program's lifecycle. Impacts readiness and operational capabilities of Army aviation units.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
High contract value

Positive Signals

Essential military asset
Long-term production
Firm Fixed Price contract type

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. The $5.58 billion award is a significant expenditure, reflecting the high cost of advanced military hardware and the specialized nature of this industry.

Small Business Impact

The data indicates that small business participation was not a stated factor in this contract award, and the prime contractor is a large corporation. There is no explicit information on subcontracting opportunities for small businesses.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny regarding the justification for not pursuing competitive bidding. Oversight should focus on ensuring the price is fair and reasonable, and that the government is receiving best value.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competitive bidding
Potential for inflated pricing
Limited transparency in price negotiation
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.58 billion to SIKORSKY AIRCRAFT CORPORATION. W58RGZ-17-C-0009 MY IX BLACK HAWK PRODUCTION CONTRACT AWARD.

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 $5.58 billion.

What is the period of performance?

Start: 2017-06-22. End: 2025-12-31.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of viable alternatives. Without specific documentation, it's presumed that the government determined Sikorsky was the only source capable of meeting the requirements for Black Hawk production within the necessary timeframe and specifications.

How does the firm-fixed-price structure mitigate risk for the government in a sole-source scenario?

A firm-fixed-price (FFP) contract shifts most of the cost risk to the contractor. In a sole-source situation, FFP provides cost certainty for the government, as the price is set upfront and generally not subject to increases due to contractor cost overruns. This protects the government from unexpected budget fluctuations.

What is the long-term strategic value of maintaining a sole-source relationship for Black Hawk production?

Maintaining a sole-source relationship can ensure continuity of supply for a critical platform, preserve specialized manufacturing capabilities, and potentially streamline upgrades and modifications. However, it also risks stifling innovation and may result in higher long-term costs compared to a competitive environment.

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: W58RGZ14R0003

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

Financial Breakdown

Contract Ceiling: $6,987,329,237

Exercised Options: $5,584,742,287

Current Obligation: $5,584,742,287

Subaward Activity

Number of Subawards: 808

Total Subaward Amount: $199,508,075

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline