DoD awards $6.6M for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $6,586,403 ($6.6M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2022-03-31

End Date: 2025-02-24

Contract Duration: 1,061 days

Daily Burn Rate: $6.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS TASK ORDER IS TO AWARD A UCA

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $6.6 million to SIKORSKY AIRCRAFT CORPORATION for work described as: THE PURPOSE OF THIS TASK ORDER IS TO AWARD A UCA Key points: 1. Contract awarded on a sole-source basis, limiting price discovery. 2. Significant duration of over 3 years suggests a critical need for parts. 3. High value for aircraft parts manufacturing indicates a specialized and potentially costly market. 4. Lack of competition raises concerns about potential overpayment. 5. The contract's value is substantial within the aircraft parts manufacturing sector. 6. Performance risk is moderate given the fixed-price nature of the award.

Value Assessment

Rating: questionable

The contract value of $6.6 million for aircraft parts is substantial. Without competitive bidding, it is difficult to benchmark this price against market rates or similar contracts. The sole-source nature means that the government may not have secured the best possible price. Further analysis would be needed to determine if the pricing is fair and reasonable given the specific parts and services required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Sikorsky Aircraft Corporation, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors vying for the contract. The lack of competition limits the government's ability to leverage market forces to achieve lower prices and potentially better terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing offers, there is a reduced incentive for the contractor to offer the lowest possible price.

Public Impact

The Department of the Army benefits from the acquisition of critical aircraft parts. This contract ensures the continued operational readiness of specific aircraft platforms. The primary beneficiaries are military personnel relying on these aircraft for defense operations. The contract supports jobs within the aerospace manufacturing sector, specifically in Connecticut.

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 procurement process due to non-competitive award.
Potential for contractor to leverage sole-source position for less favorable terms.
Limited visibility into alternative solutions or innovative approaches that competition might yield.

Positive Signals

Award to a known entity (Sikorsky Aircraft Corporation) may indicate a reliance on specialized expertise.
Fixed-price contract type can provide cost certainty if the scope is well-defined.
Long-term nature of the contract (over 3 years) suggests a stable supply chain for critical components.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the broader aerospace industry. The industry is characterized by high barriers to entry, specialized manufacturing processes, and significant R&D investment. Spending in this sector is often driven by defense needs, requiring adherence to stringent quality and performance standards. Comparable spending benchmarks are difficult to establish without detailed specifications, but large sole-source awards often indicate unique capabilities or long-standing relationships.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans for small businesses. The award to a large, established manufacturer like Sikorsky suggests that small businesses are unlikely to be direct beneficiaries or significant subcontractors on this specific task order.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The Inspector General's office within the Department of Defense may conduct audits or investigations if concerns arise regarding waste, fraud, or abuse. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process challenging.

Related Government Programs

Department of Defense Aircraft Procurement
Army Aviation Support Contracts
Aerospace Parts Manufacturing
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Limited price transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.6 million to SIKORSKY AIRCRAFT CORPORATION. THE PURPOSE OF THIS TASK ORDER IS TO AWARD A UCA

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 $6.6 million.

What is the period of performance?

Start: 2022-03-31. End: 2025-02-24.

What specific aircraft parts are being procured under this contract?

The provided data indicates the contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS code 336413) awarded to Sikorsky Aircraft Corporation. However, the specific list of parts is not detailed in the provided data. This information is crucial for a comprehensive value assessment, as the complexity, rarity, and criticality of the parts significantly influence their cost. Without this detail, it's challenging to ascertain if the $6.6 million price tag is justified based on the actual components being supplied. Further inquiry into the contract's statement of work or associated documentation would be necessary to identify the exact parts.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract type as 'NOT COMPETED' (ct: NOT COMPETED), indicating a sole-source award. Common justifications for sole-source procurements include situations where only one responsible source is available, urgent and compelling needs exist that preclude competition, or specific capabilities are required that only one contractor possesses. Without further documentation or justification from the Department of the Army, the precise reason for bypassing competition remains unclear. This lack of transparency is a significant concern for ensuring fair pricing and maximizing taxpayer value.

What is Sikorsky Aircraft Corporation's track record with similar sole-source contracts?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long history of supplying aircraft and components, particularly to the U.S. military. While specific data on their sole-source contract history is not provided here, large defense contractors frequently engage in sole-source or limited-competition awards due to the specialized nature of their products and long-standing relationships with government agencies. Analyzing Sikorsky's past performance on similar sole-source awards, including pricing trends and any associated audits or reviews, would be essential to assess the risk and value proposition of this current $6.6 million task order.

How does the $6.6 million value compare to historical spending on aircraft parts by the Department of the Army?

The provided data offers a single data point for this specific task order ($6.6 million). To establish a historical spending context, one would need to analyze broader spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) by the Department of the Army over several fiscal years. This would involve querying federal procurement databases for similar contracts, noting award types (competed vs. sole-source), quantities, and unit prices where available. Without this broader dataset, it is difficult to definitively state whether $6.6 million represents an increase, decrease, or is in line with historical spending trends for comparable parts or services.

What are the potential risks associated with a sole-source award for critical aircraft parts?

The primary risk of a sole-source award for critical aircraft parts is the potential for inflated pricing due to the absence of competitive pressure. This can lead to inefficient use of taxpayer funds. Additionally, reliance on a single supplier can create vulnerabilities in the supply chain; if the sole source experiences production issues, quality control problems, or financial instability, it could directly impact the operational readiness of the aircraft. There's also a reduced incentive for the contractor to innovate or offer cost-saving efficiencies when competition is not a factor.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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

Financial Breakdown

Contract Ceiling: $6,586,403

Exercised Options: $6,586,403

Current Obligation: $6,586,403

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $716,928

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ19D0079

IDV Type: IDC

Timeline