Army awards $51.8M for main rotor blades, highlighting a sole-source procurement for critical aircraft parts

Contract Overview

Contract Amount: $51,815,988 ($51.8M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2017-08-31

End Date: 2020-05-31

Contract Duration: 1,004 days

Daily Burn Rate: $51.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OVERHAUL/UPGRADE, CATAGORY IV, MAIN ROTOR BLADE, 414 EA

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $51.8 million to SIKORSKY AIRCRAFT CORPORATION for work described as: OVERHAUL/UPGRADE, CATAGORY IV, MAIN ROTOR BLADE, 414 EA Key points: 1. Procurement was sole-source, limiting competitive pressure and potentially impacting price. 2. The contract covers a significant quantity of main rotor blades, indicating a substantial operational need. 3. The fixed-price contract type shifts risk to the contractor for cost overruns. 4. The duration of the contract suggests a long-term requirement for these components. 5. The awardee, Sikorsky Aircraft Corporation, is a major player in the aerospace industry. 6. This contract falls under the 'Other Aircraft Parts' manufacturing category.

Value Assessment

Rating: fair

The contract value of $51.8 million for 414 main rotor blades equates to approximately $125,159 per blade. Benchmarking this against similar contracts is challenging without more specific technical details and market data. However, given the specialized nature of military aircraft components and the sole-source award, it is difficult to definitively assess value for money. The fixed-price nature provides some cost certainty, but the lack of competition raises questions about whether the best possible price was achieved.

Cost Per Unit: Approximately $125,159 per main rotor blade. Direct comparison is difficult due to the specialized nature and sole-source award, but this figure represents a significant investment per unit.

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 is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means there was no direct price comparison from multiple vendors, which can limit the government's ability to secure the lowest possible price.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, it's harder to ensure that the price reflects the most economical option available in the market.

Public Impact

The primary beneficiaries are the U.S. Army aviation units requiring operational readiness and maintenance for their helicopters. The contract delivers essential main rotor blades, critical components for helicopter flight safety and performance. The geographic impact is primarily within the U.S. Army's operational theaters, ensuring fleet availability. Workforce implications include continued employment for skilled manufacturing personnel at Sikorsky Aircraft Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
High per-unit cost for critical components requires careful monitoring.
Potential for price escalation if future contracts are also sole-sourced.

Positive Signals

Fixed-price contract shifts cost overrun risk to the contractor.
Awardee is an established manufacturer with a track record in rotorcraft.
Contract ensures availability of critical spare parts for Army aviation.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized helicopter components like main rotor blades is often dominated by a few key manufacturers due to high barriers to entry, including complex engineering, rigorous testing, and established supply chains. Spending in this category is driven by military readiness requirements and the lifecycle of existing aircraft fleets. Comparable spending benchmarks would typically involve other major rotorcraft component procurements, which can vary significantly based on aircraft type and quantity.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the provided data. The award went directly to Sikorsky Aircraft Corporation, a large aerospace manufacturer. This suggests that the primary focus was on securing the specialized components from an established prime contractor rather than fostering small business participation through set-asides or prime contracting roles.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the contract terms, particularly the fixed-price structure which obligates the contractor to deliver the specified goods. Transparency is generally maintained through contract databases like FPDS, though the specifics of the sole-source justification may not always be publicly detailed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Aviation Maintenance
Helicopter Component Procurement
Defense Logistics Agency
Aerospace Manufacturing Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source procurement
High per-unit cost
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.8 million to SIKORSKY AIRCRAFT CORPORATION. OVERHAUL/UPGRADE, CATAGORY IV, MAIN ROTOR BLADE, 414 EA

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 $51.8 million.

What is the period of performance?

Start: 2017-08-31. End: 2020-05-31.

What is Sikorsky Aircraft Corporation's track record with the Department of Defense for similar rotor blade procurements?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long and extensive history of supplying rotorcraft and components to the U.S. military, including the Department of Defense. They are a primary manufacturer for many Army helicopter platforms, such as the Black Hawk and Chinook. Their track record typically involves numerous contracts for new aircraft, upgrades, and sustainment, including the procurement of critical components like main rotor blades. While specific data on past sole-source rotor blade contracts of this exact nature is not detailed here, their overall performance history with the DoD is generally characterized by large-scale, complex, and often sole-source or limited-competition awards due to the specialized and proprietary nature of their products. Their experience suggests a high level of technical capability and production capacity, but also reinforces the pattern of limited competition for such specialized military hardware.

How does the per-unit cost of these main rotor blades compare to industry benchmarks or other government contracts for similar items?

The per-unit cost of approximately $125,159 per main rotor blade is substantial. Direct, apples-to-apples comparisons are challenging without knowing the exact model, material composition, technological sophistication, and specific performance requirements of these blades. However, for high-performance, military-grade rotor blades, this price range is not entirely unexpected, especially when considering the extensive research, development, testing, and certification processes involved. Government contracts for similar, albeit potentially less complex or older, rotor blade systems have ranged significantly. If this contract were competed, it would be possible to establish a more precise market-based benchmark. The sole-source nature of this award means that the government relied on Sikorsky's pricing without the benefit of competitive offers to drive down the cost, making a definitive value assessment difficult without further internal cost analysis or market intelligence.

What are the primary risks associated with a sole-source award for critical aircraft components like main rotor blades?

The primary risks associated with a sole-source award for critical aircraft components like main rotor blades include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or improve efficiency, and a potential lack of supply chain resilience if the sole-source provider faces production issues. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, the government becomes heavily reliant on a single supplier, which can create strategic vulnerabilities. If the contractor experiences financial difficulties, labor disputes, or production delays, it could significantly impact the operational readiness of the affected Army aviation assets. The absence of competition also limits the government's leverage in negotiating future contracts or modifications.

What is the expected impact of this contract on the operational readiness and maintenance schedules of the U.S. Army's helicopter fleet?

This contract is crucial for maintaining the operational readiness and supporting the maintenance schedules of the U.S. Army's helicopter fleet that utilize these specific main rotor blades. By procuring 414 units, the Army is ensuring a sufficient supply of these critical components to replace worn-out or damaged blades, perform scheduled maintenance, and potentially build up inventory for future needs. Having an adequate supply of main rotor blades directly impacts the availability of aircraft for training, deployment, and operational missions. Delays or shortages in these components could lead to grounded aircraft, impacting readiness levels and potentially extending maintenance downtimes, thereby affecting the Army's overall aviation capability.

Can we analyze historical spending patterns for main rotor blades by the Department of the Army to identify trends or potential cost efficiencies?

Analyzing historical spending patterns for main rotor blades by the Department of the Army is essential for identifying trends and potential cost efficiencies. This would involve examining past contracts for similar components, noting quantities, award types (competed vs. sole-source), contract values, and per-unit costs over time. Trends might reveal increasing costs, indicating potential market consolidation or rising material prices, or stable costs suggesting effective procurement strategies. Identifying periods of competitive bidding versus sole-source awards can highlight the cost impact of competition. For instance, comparing the per-unit cost of this $51.8 million sole-source contract to previously competed contracts for comparable blades could quantify the 'competition premium.' Such analysis helps inform future procurement strategies, justify sole-source awards, or advocate for increased competition where feasible to achieve better value for taxpayer dollars.

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

Solicitation ID: W58RGZ15R0408

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

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: $51,815,988

Exercised Options: $51,815,988

Current Obligation: $51,815,988

Actual Outlays: $638,640

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $1,209,337

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline