DoD awards $10.4M contract for UH-60M helicopter retrofits to Sikorsky Aircraft Corporation

Contract Overview

Contract Amount: $10,426,056 ($10.4M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2023-11-09

End Date: 2027-01-31

Contract Duration: 1,179 days

Daily Burn Rate: $8.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 36 MONTHS FIRM-FIXED PRICE (FFP) CONTRACT FOR MODE 5 RETROFIT AND NON-RECURRING ENGINEERING (NRE) IN SUPPORT OF ROYAL SAUDI LAND FORCES AVIATION COMMAND (RSLFAC) UH-60M HELICOPTERS FOR FOREIGN MILITARY SALES (FMS) CASE SR-B-ZAD.

Place of Performance

Location: ARECIBO, ARECIBO County, PUERTO RICO, 00614

Plain-Language Summary

Department of Defense obligated $10.4 million to SIKORSKY AIRCRAFT CORPORATION for work described as: 36 MONTHS FIRM-FIXED PRICE (FFP) CONTRACT FOR MODE 5 RETROFIT AND NON-RECURRING ENGINEERING (NRE) IN SUPPORT OF ROYAL SAUDI LAND FORCES AVIATION COMMAND (RSLFAC) UH-60M HELICOPTERS FOR FOREIGN MILITARY SALES (FMS) CASE SR-B-ZAD. Key points: 1. Contract awarded for essential retrofitting and engineering services for Royal Saudi Land Forces Aviation Command. 2. Firm-fixed-price contract structure aims to control costs for the duration of the agreement. 3. Foreign Military Sales case indicates international cooperation and support for allied aviation capabilities. 4. The contract duration of nearly 4 years suggests a significant scope of work and long-term support needs. 5. Sikorsky Aircraft Corporation, a known entity in helicopter manufacturing, is the sole awardee. 6. The contract falls under the Other Aircraft Parts and Auxiliary Equipment Manufacturing NAICS code.

Value Assessment

Rating: fair

The contract value of $10.4 million for retrofitting and engineering services for UH-60M helicopters appears reasonable given the scope and duration. However, without specific details on the number of units retrofitted or the complexity of the NRE, a direct comparison to similar contracts is challenging. The firm-fixed-price nature provides cost certainty, but the absence of competition limits the opportunity for price discovery and potential savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This is often the case for specialized equipment or when a specific manufacturer holds proprietary knowledge or rights. While this can ensure compatibility and expertise, it removes the potential for competitive bidding to drive down costs and encourage innovation from other suppliers.

Taxpayer Impact: Taxpayers may face higher costs due to the lack of competitive pressure, as the government cannot leverage multiple bids to secure the best possible price.

Public Impact

The primary beneficiaries are the Royal Saudi Land Forces Aviation Command, receiving upgraded and maintained UH-60M helicopters. Services delivered include Mode 5 retrofits and non-recurring engineering, enhancing the operational capabilities and safety of the aircraft. The geographic impact is primarily in Saudi Arabia, where the RSLFAC operates. Workforce implications may involve specialized technical personnel at Sikorsky Aircraft Corporation for engineering and retrofitting tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competed contract.
Sole-source awards can limit opportunities for other qualified vendors to participate.
Dependence on a single contractor for critical upgrades could pose a risk if performance issues arise.

Positive Signals

Award to an established manufacturer (Sikorsky) suggests a high likelihood of technical expertise and successful execution.
Firm-fixed-price contract provides cost predictability for the duration of the agreement.
Foreign Military Sales contracts often undergo rigorous interagency review, implying a level of oversight.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing. The market for helicopter maintenance, repair, and overhaul (MRO) services, particularly for established platforms like the UH-60 Black Hawk, is significant. This contract represents a portion of the broader spending on military aviation support and modernization, often facilitated through Foreign Military Sales programs.

Small Business Impact

This contract was not set aside for small businesses, nor is there an indication of significant subcontracting opportunities for small businesses within the provided data. The award to Sikorsky Aircraft Corporation, a large aerospace manufacturer, suggests that the primary work will be performed by the prime contractor. This limits the direct impact on the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, managing the Foreign Military Sales case. The firm-fixed-price nature provides a degree of financial oversight by locking in costs. Transparency is generally maintained through FMS case documentation and reporting requirements, though specific details of the NRE and retrofit process may be proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales Program
UH-60 Black Hawk Helicopter Support
Aviation Maintenance and Repair
Defense Logistics Agency (DLA) Aviation

Risk Flags

Sole-source award
Potential for cost overruns if NRE is complex
Dependence on single contractor for critical upgrades

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.4 million to SIKORSKY AIRCRAFT CORPORATION. 36 MONTHS FIRM-FIXED PRICE (FFP) CONTRACT FOR MODE 5 RETROFIT AND NON-RECURRING ENGINEERING (NRE) IN SUPPORT OF ROYAL SAUDI LAND FORCES AVIATION COMMAND (RSLFAC) UH-60M HELICOPTERS FOR FOREIGN MILITARY SALES (FMS) CASE SR-B-ZAD.

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 $10.4 million.

What is the period of performance?

Start: 2023-11-09. End: 2027-01-31.

What is Sikorsky Aircraft Corporation's track record with the UH-60M platform, particularly for FMS clients?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has an extensive and well-established track record with the UH-60 family of helicopters, including the UH-60M variant. They are the original equipment manufacturer (OEM) and have been responsible for the design, production, and ongoing support of these aircraft for decades. Their experience with Foreign Military Sales (FMS) clients is also substantial, having supplied and supported Black Hawks for numerous allied nations. This includes providing training, spare parts, maintenance, and upgrade services. Given their OEM status and long history with the platform, their technical expertise and ability to execute retrofits and engineering modifications on the UH-60M for FMS cases are generally considered high. Past performance on similar FMS contracts would be a key factor in the government's decision-making process, even in a sole-source scenario.

How does the $10.4 million contract value compare to similar Mode 5 retrofit contracts for the UH-60M?

Directly comparing the $10.4 million contract value for this specific Mode 5 retrofit and NRE contract to similar deals is challenging without access to detailed contract databases and specific scope of work for other awards. Mode 5 is a military Identification Friend or Foe (IFF) system upgrade, and its implementation can vary in complexity depending on the aircraft configuration, the number of aircraft involved, and the extent of non-recurring engineering (NRE) required. Contracts for such upgrades can range significantly. Factors influencing cost include the specific avionics integration required, the labor hours for installation and testing, and the cost of the Mode 5 transponders themselves. As this was a sole-source award, a direct benchmark against competitive bids is not available. However, the value appears to be within a plausible range for a significant avionics upgrade on a fleet of helicopters, especially considering the NRE component which involves development and engineering effort.

What are the primary risks associated with this sole-source contract for Mode 5 retrofits?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, Sikorsky Aircraft Corporation may not have had the same incentive to offer the lowest possible price. Another risk is contractor performance; while Sikorsky is a reputable manufacturer, any delays or quality issues in the retrofitting or NRE process could impact the operational readiness of the Royal Saudi Land Forces Aviation Command's UH-60M fleet. Furthermore, reliance on a single source for critical upgrades can create a dependency, potentially leading to higher sustainment costs in the future if follow-on support is also sole-sourced. Ensuring adequate government oversight to monitor progress and adherence to specifications is crucial to mitigate these risks.

How effective is the firm-fixed-price (FFP) contract type in managing costs for this type of aviation service?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks of cost overruns are relatively low or can be reasonably estimated. For aviation retrofits and engineering services like this, FFP provides cost certainty to the buyer (in this case, the FMS customer via the US government). Sikorsky Aircraft Corporation assumes the risk of cost overruns, incentivizing them to perform efficiently. This structure helps prevent unexpected cost increases for the buyer. However, if unforeseen technical challenges arise during the NRE or retrofit process that were not reasonably foreseeable, the FFP structure could lead to disputes or require contract modifications, potentially increasing the overall cost. For well-understood upgrades like Mode 5, FFP is often a suitable choice for cost control.

What is the historical spending trend for similar aircraft parts and auxiliary equipment manufacturing contracts by the Department of the Army?

Historical spending trends for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) by the Department of the Army are substantial, reflecting the significant investment in maintaining and modernizing its vast aviation fleet. This category encompasses a wide range of components, from engine parts and landing gear to avionics and structural elements. Spending in this area fluctuates based on modernization programs, fleet sustainment needs, and the volume of Foreign Military Sales. Over the past decade, the Army has consistently awarded billions of dollars annually in contracts falling under this NAICS code, supporting platforms like the UH-60 Black Hawk, AH-64 Apache, and CH-47 Chinook. FMS cases, like the one awarded to Sikorsky, represent a notable portion of this spending, as allied nations procure and upgrade U.S.-made military equipment.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ22R0171

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

Financial Breakdown

Contract Ceiling: $10,426,056

Exercised Options: $10,426,056

Current Obligation: $10,426,056

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $113,696

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline