DoD Awards $1.25B for UH-72 Lakota Helicopter Support, Lacking Competition
Contract Overview
Contract Amount: $1,254,505,134 ($1.3B)
Contractor: Airbus US Space & Defense Inc
Awarding Agency: Department of Defense
Start Date: 2022-07-01
End Date: 2027-02-03
Contract Duration: 1,678 days
Daily Burn Rate: $747.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: THIS CONTRACT IS FOR THE FIRM-FIXED PRICE UH-72 LAKOTA HELICOPTER CONTRACTOR LOGISTICS SUPPORT AND ENGINEERING SERVICES WITH A BASE YEAR (6 MONTHS), FOUR ONE-YEAR OPTIONS, AND A SIX MONTH EXTENSION UNDER FAR CLAUSE 52.217-8.
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $1.25 billion to AIRBUS US SPACE & DEFENSE INC for work described as: THIS CONTRACT IS FOR THE FIRM-FIXED PRICE UH-72 LAKOTA HELICOPTER CONTRACTOR LOGISTICS SUPPORT AND ENGINEERING SERVICES WITH A BASE YEAR (6 MONTHS), FOUR ONE-YEAR OPTIONS, AND A SIX MONTH EXTENSION UNDER FAR CLAUSE 52.217-8. Key points: 1. Significant contract value of over $1.25 billion for essential helicopter logistics and engineering. 2. Sole contractor, AIRBUS US SPACE & DEFENSE INC, raises concerns about market competition. 3. Firm-fixed-price contract type helps control costs, but lack of competition may inflate pricing. 4. The "Other Support Activities for Air Transportation" sector sees substantial investment here.
Value Assessment
Rating: questionable
The firm-fixed-price structure is generally good for cost control. However, without competition, it's difficult to benchmark pricing against alternatives, potentially leading to less favorable rates than could be achieved in a competitive environment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may result in higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for a contract of this magnitude means taxpayers may be paying a premium for these essential services.
Public Impact
Ensures continued operational readiness for the UH-72 Lakota helicopter fleet. Supports critical logistics and engineering services vital for military aviation. Potential for higher costs due to the absence of competitive bidding. Long-term commitment to a single provider for essential aircraft support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
Positive Signals
- Firm-fixed-price contract
- Essential services for military aircraft
Sector Analysis
This contract falls within the "Other Support Activities for Air Transportation" sector, which includes services like logistics, maintenance, and engineering for aircraft. Spending in this area is critical for maintaining military readiness and operational capabilities.
Small Business Impact
The contract was awarded to AIRBUS US SPACE & DEFENSE INC, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is a missed opportunity for small business participation.
Oversight & Accountability
The contract's sole-source nature warrants close oversight to ensure fair pricing and performance. The Department of the Army should actively monitor contract execution and explore competitive strategies for future procurements.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Long-term reliance on a single vendor
- Limited transparency in price determination
- Missed opportunity for small business engagement
Tags
other-support-activities-for-air-transpo, department-of-defense, va, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.25 billion to AIRBUS US SPACE & DEFENSE INC. THIS CONTRACT IS FOR THE FIRM-FIXED PRICE UH-72 LAKOTA HELICOPTER CONTRACTOR LOGISTICS SUPPORT AND ENGINEERING SERVICES WITH A BASE YEAR (6 MONTHS), FOUR ONE-YEAR OPTIONS, AND A SIX MONTH EXTENSION UNDER FAR CLAUSE 52.217-8.
Who is the contractor on this award?
The obligated recipient is AIRBUS US SPACE & DEFENSE INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $1.25 billion.
What is the period of performance?
Start: 2022-07-01. End: 2027-02-03.
What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or circumstances. However, for a contract of this size and duration, a thorough review should have been conducted to explore all competitive options. Agencies must provide robust documentation for sole-source awards and implement stringent price analysis techniques, including benchmarking against similar services and historical data, to mitigate the risk of overpayment.
What are the long-term risks associated with relying on a single contractor for critical helicopter support services?
The primary long-term risk is vendor lock-in and potential price escalation over time, as the contractor faces no competitive pressure. This can also lead to reduced innovation and responsiveness. Furthermore, a sole-source arrangement can create a critical dependency, making the government vulnerable if the contractor experiences financial difficulties or decides to exit the market.
How does the firm-fixed-price structure mitigate risk in a sole-source environment for these services?
The firm-fixed-price (FFP) structure shifts most of the cost risk to the contractor, providing budget certainty for the government. Even in a sole-source scenario, FFP helps prevent cost overruns due to contractor inefficiencies. However, it does not eliminate the risk of the initial price being too high due to the lack of competition.
Industry Classification
NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ20R0137
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1525 WILSON BLVD STE 500, ARLINGTON, VA, 22209
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $1,564,988,539
Exercised Options: $1,254,505,134
Current Obligation: $1,254,505,134
Actual Outlays: $3,556,483
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2022-07-01
Current End Date: 2027-02-03
Potential End Date: 2027-06-30 00:00:00
Last Modified: 2025-12-18
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