Department of Defense awards $146.5M contract for 17 modified Black Hawk helicopters to Sikorsky Aircraft Corporation

Contract Overview

Contract Amount: $146,497,644 ($146.5M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2018-01-11

End Date: 2022-11-30

Contract Duration: 1,784 days

Daily Burn Rate: $82.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF 17 UNIQUELY MODIFIED UH-60 BLACK HAWK HELICOPTERS IN SUPPORT OF THE SAUDI ARABIAN NATIONAL GUARD AND ROYAL SAUDI LAND FORCES-AIRBORNE SPECIAL SECURITY FORCES.

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $146.5 million to SIKORSKY AIRCRAFT CORPORATION for work described as: PROCUREMENT OF 17 UNIQUELY MODIFIED UH-60 BLACK HAWK HELICOPTERS IN SUPPORT OF THE SAUDI ARABIAN NATIONAL GUARD AND ROYAL SAUDI LAND FORCES-AIRBORNE SPECIAL SECURITY FORCES. Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and lack of competitive pressure. 2. Significant investment in specialized aircraft highlights a critical need for advanced rotary-wing capabilities. 3. The duration of the contract (1784 days) suggests a complex modification and delivery process. 4. Focus on supporting allied forces indicates a strategic foreign military sales component. 5. The absence of small business involvement suggests this contract is outside the typical scope for SMB participation. 6. High value indicates a substantial commitment to a specific defense platform.

Value Assessment

Rating: questionable

The contract value of $146.5 million for 17 modified UH-60 Black Hawk helicopters represents a significant investment. Without competitive bidding, it is difficult to benchmark the value for money. The per-unit cost, approximately $8.6 million, needs to be compared against similar sole-source procurements of modified military aircraft to assess its fairness. The lack of competition inherently limits the government's ability to secure the best possible price.

Cost Per Unit: Approximately $8.6 million per helicopter, but requires comparison to similar sole-source procurements of modified military aircraft.

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or authorized by statute. The lack of competition means that Sikorsky Aircraft Corporation was the only bidder, which can lead to higher prices than if multiple companies had vied for the contract. Price discovery is therefore limited.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure, as the government did not have multiple offers to choose from to ensure the lowest possible price.

Public Impact

The primary beneficiaries are the Saudi Arabian National Guard and Royal Saudi Land Forces, receiving advanced rotary-wing aircraft. The contract delivers 17 uniquely modified UH-60 Black Hawk helicopters, tailored for specific operational requirements. The geographic impact is primarily in Saudi Arabia, supporting the defense capabilities of allied nations. Workforce implications include specialized manufacturing and modification roles within Sikorsky Aircraft Corporation and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
High contract value could indicate significant risk if modifications do not meet operational needs.
Dependence on a single contractor for specialized aircraft modifications.

Positive Signals

Procurement of advanced, modified aircraft addresses critical defense needs.
Long contract duration suggests a commitment to ensuring successful delivery and integration.
Firm Fixed Price contract type shifts some financial risk to the contractor.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government reliance. This contract falls within the military aircraft manufacturing sub-sector, specifically focusing on specialized modifications of established platforms like the UH-60 Black Hawk. The market for such specialized military hardware is often dominated by a few large prime contractors, making sole-source procurements more common for unique requirements. Comparable spending benchmarks would involve looking at other foreign military sales of similarly modified rotorcraft.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the nature of manufacturing and modifying complex military aircraft like the Black Hawk, the primary contractor, Sikorsky Aircraft Corporation, is a large business. There is no explicit information regarding subcontracting plans to small businesses, but it is unlikely to be a primary focus for this type of specialized, sole-source award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Inspector General of the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award, with justifications for such awards typically being made public but detailed pricing and negotiation strategies often being proprietary.

Related Government Programs

Foreign Military Sales (FMS)
UH-60 Black Hawk Helicopter Program
Rotary-Wing Aircraft Procurement
Defense Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
Limited transparency in justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $146.5 million to SIKORSKY AIRCRAFT CORPORATION. PROCUREMENT OF 17 UNIQUELY MODIFIED UH-60 BLACK HAWK HELICOPTERS IN SUPPORT OF THE SAUDI ARABIAN NATIONAL GUARD AND ROYAL SAUDI LAND FORCES-AIRBORNE SPECIAL SECURITY FORCES.

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 $146.5 million.

What is the period of performance?

Start: 2018-01-11. End: 2022-11-30.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded as a 'SOLE SOURCE'. While the specific justification is not detailed in the provided data snippet, common reasons for sole-source awards in defense procurement include: unique capabilities or proprietary technology held by a single contractor, urgent and compelling needs where competition is not feasible, or when only one responsible source is available. For specialized modifications of the UH-60 Black Hawk, it's possible that Sikorsky Aircraft Corporation, as the original manufacturer, possesses unique expertise, tooling, or data rights necessary for these specific modifications, making them the only viable source. Further investigation into the official justification documentation (e.g., Justification and Approval for Other Than Full and Open Competition) would be required for a definitive answer.

How does the per-unit cost of these modified Black Hawks compare to standard UH-60 models or other similar procurements?

The total contract value is $146,497,643.91 for 17 helicopters, resulting in a per-unit cost of approximately $8.62 million ($146,497,643.91 / 17). Standard UH-60M Black Hawk helicopters have a unit cost that can vary significantly based on configuration and year of procurement, but typically range from $5 million to $7 million. The higher cost in this contract is attributed to 'UNIQUELY MODIFIED' configurations for specific support roles for the Saudi Arabian National Guard and Royal Saudi Land Forces. Without details on the specific modifications, a direct comparison is challenging. However, sole-source awards for specialized military equipment often result in higher per-unit costs compared to competitively procured, standard configurations due to the lack of price negotiation leverage and the specialized nature of the work.

What are the key modifications being made to the UH-60 Black Hawks under this contract?

The contract description states the procurement is for '17 UNIQUELY MODIFIED UH-60 BLACK HAWK HELICOPTERS'. However, the specific details of these modifications are not provided in the data. These modifications could range from avionics upgrades, enhanced communication systems, specialized mission equipment (e.g., sensors, weapons integration), structural reinforcements, or environmental protection systems tailored to the operational requirements of the Saudi Arabian National Guard and Royal Saudi Land Forces. The term 'uniquely modified' suggests a high degree of customization beyond standard configurations. Accessing the contract's Statement of Work (SOW) or technical exhibits would be necessary to understand the precise nature and scope of these modifications.

What is the track record of Sikorsky Aircraft Corporation in fulfilling similar foreign military sales contracts?

Sikorsky Aircraft Corporation, now a subsidiary of Lockheed Martin, has a long and extensive history of producing and delivering helicopters, including the UH-60 Black Hawk, to numerous domestic and international customers. They have a well-established track record in fulfilling Foreign Military Sales (FMS) contracts. The UH-60 platform itself is a mature and widely exported military helicopter. Sikorsky has experience in providing various configurations and modifications to meet the diverse needs of allied nations. While specific performance metrics for all past FMS contracts are not publicly detailed, the continued reliance on Sikorsky for such procurements suggests a generally positive history of delivery and capability provision within the defense sector.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risk associated with a sole-source contract of this magnitude ($146.5 million) is the potential for inflated pricing due to the lack of competitive bidding. Without competing offers, the government has reduced leverage to negotiate the best possible price. Other risks include potential schedule delays if the sole contractor faces unforeseen production issues, and a lack of innovation that might have been spurred by competition. Furthermore, there's a risk of vendor lock-in, where the government becomes highly dependent on a single supplier for critical components or modifications, potentially limiting future flexibility. Ensuring rigorous oversight and clear performance metrics becomes even more crucial in sole-source situations to mitigate these risks.

How does this spending compare to overall US military aircraft procurement or foreign military sales in recent years?

This $146.5 million contract for 17 modified Black Hawks represents a significant, but not exceptionally large, expenditure within the broader context of US military aircraft procurement and foreign military sales. The US Department of Defense's annual budget for aircraft procurement and modification runs into the tens of billions of dollars. Foreign Military Sales (FMS) also represent billions of dollars annually. For instance, in a typical fiscal year, FMS cases can range from tens of millions to several billion dollars. This specific contract, while substantial for the platform and quantity, is a component of a much larger global defense spending ecosystem. Its significance lies in its specific application and the sole-source nature rather than its sheer dollar amount relative to the entire defense budget.

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: W58RGZ17R0065

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: $308,385,058

Exercised Options: $146,497,644

Current Obligation: $146,497,644

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $2,527,455

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline