DoD awards $35M contract for aircraft manufacturing demonstrator, with Sierra Technical Services Inc. as prime

Contract Overview

Contract Amount: $35,070,855 ($35.1M)

Contractor: Sierra Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-03-17

End Date: 2022-03-24

Contract Duration: 1,833 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BASELINE CONTRACT- 1ST DEMONSTRATOR, MATERIAL/EQUIPMENT AND TRAVEL

Place of Performance

Location: TEHACHAPI, KERN County, CALIFORNIA, 93561

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $35.1 million to SIERRA TECHNICAL SERVICES, INC. for work described as: BASELINE CONTRACT- 1ST DEMONSTRATOR, MATERIAL/EQUIPMENT AND TRAVEL Key points: 1. Contract awarded via full and open competition after exclusion of sources, indicating a competitive process. 2. The contract duration of 1833 days suggests a long-term project with significant development or production phases. 3. The firm-fixed-price contract type aims to control costs for the government. 4. The North American Industry Classification System (NAICS) code 336411 points to the Aircraft Manufacturing sector. 5. The contract was awarded by the Department of the Army, a major component of the Department of Defense. 6. The contract's base value is over $35 million, representing a substantial investment in aircraft technology.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the demonstrator's capabilities and market rates for similar development projects. The firm-fixed-price structure is a positive indicator for cost control. However, the absence of detailed performance metrics or comparisons to alternative solutions makes a definitive value assessment difficult. Further analysis would require understanding the technological advancements and operational benefits this demonstrator is expected to provide.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This suggests that while the competition was intended to be open, specific sources may have been excluded for particular reasons, or the initial exclusion of sources was later lifted for a broader competition. The number of bidders is not specified, but the 'after exclusion of sources' phrasing implies a potentially narrower field than a pure 'full and open' competition from the outset. This could impact price discovery if fewer than expected vendors participated.

Taxpayer Impact: The competition level, while aiming for openness, might have limited the number of potential bidders, potentially impacting the government's ability to secure the lowest possible price compared to a truly unrestricted full and open competition.

Public Impact

The primary beneficiaries are likely the Department of Defense and its operational units, which will receive an advanced aircraft demonstrator. The contract supports the development and delivery of a first demonstrator, crucial for testing and validating new aircraft technologies. The geographic impact is centered around the contractor's operations in California (ST), but the ultimate deployment and use of the technology will be within DoD operational theaters. Workforce implications include skilled labor in aircraft manufacturing, engineering, and related technical fields within the contractor's organization and potentially its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the 'demonstrator' phase proves more complex than initially scoped.
Risk of technological obsolescence if the demonstrator's capabilities are surpassed by emerging technologies during its development cycle.
Dependence on a single contractor (Sierra Technical Services, Inc.) for this specific demonstrator could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract type helps mitigate cost uncertainty for the government.
Awarded after exclusion of sources, suggesting a deliberate process to ensure the best fit for the requirement.
Long contract duration (1833 days) indicates a commitment to developing and maturing the technology.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical component of the aerospace and defense industry. This sector is characterized by high R&D investment, complex supply chains, and stringent regulatory requirements. Spending in this area is often driven by national security needs and technological advancement. Comparable spending benchmarks would typically involve other major aircraft development programs, which can range from tens to hundreds of millions of dollars depending on the complexity and scale.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests the prime contract was awarded to a large business, and there is no explicit indication of small business subcontracting goals being mandated within the provided data. The impact on the small business ecosystem would depend on whether Sierra Technical Services, Inc. voluntarily engages small businesses in its supply chain for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which incentivizes the contractor to meet cost, schedule, and performance requirements. Transparency is generally maintained through contract award databases and reporting requirements, though specific technical details of the demonstrator may be sensitive.

Related Government Programs

Advanced Aircraft Development Programs
Aerospace Manufacturing Contracts
Department of Defense Research and Development
Military Aircraft Prototypes

Risk Flags

Potential for scope creep given the nature of demonstrator development.
Contract duration may lead to technology obsolescence concerns.
Limited competition details require further investigation into bidder pool size.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.1 million to SIERRA TECHNICAL SERVICES, INC.. BASELINE CONTRACT- 1ST DEMONSTRATOR, MATERIAL/EQUIPMENT AND TRAVEL

Who is the contractor on this award?

The obligated recipient is SIERRA TECHNICAL SERVICES, 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 $35.1 million.

What is the period of performance?

Start: 2017-03-17. End: 2022-03-24.

What is the specific nature of the 'first demonstrator' being developed under this contract, and what are its intended capabilities?

The provided data identifies the contract's purpose as 'BASELINE CONTRACT- 1ST DEMONSTRATOR, MATERIAL/EQUIPMENT AND TRAVEL' within the Aircraft Manufacturing sector (NAICS 336411). However, it does not specify the exact nature or intended capabilities of this first demonstrator. Typically, a demonstrator contract aims to prove the feasibility and potential of a new technology, system, or design concept. This could range from a new aerodynamic configuration, an advanced propulsion system integration, novel avionics, or a combination thereof. Without further details from the contract's statement of work or technical exhibits, the specific capabilities remain undefined. The $35 million award suggests a significant undertaking, likely involving substantial engineering, prototyping, and testing.

How does the $35 million contract value compare to typical spending on aircraft demonstrator programs within the Department of Defense?

The $35 million award for an aircraft demonstrator falls within a common range for such programs, particularly for initial development phases or proof-of-concept prototypes. Larger, more complex programs involving full-scale flight demonstrators or advanced system integration can easily exceed this amount, reaching hundreds of millions or even billions of dollars. Conversely, smaller, more focused technology demonstrations might be awarded for less. This contract's value suggests a substantial project, likely involving significant material, equipment, and engineering effort over its 1833-day duration, positioning it as a mid-to-high value demonstrator program within the DoD's portfolio.

What are the potential risks associated with a firm-fixed-price contract for a technology demonstrator, especially one with a long duration?

While firm-fixed-price (FFP) contracts are generally favored for cost control, they can introduce risks in technology development, particularly for demonstrators. The primary risk is that the initial cost and scope estimates may not accurately reflect the complexities discovered during development. If unforeseen technical challenges arise, the contractor may struggle to deliver within the fixed price, potentially leading to reduced quality, scope cuts, or even contractor default. For a long-duration contract (1833 days), the risk of evolving requirements, technological obsolescence, or market changes impacting the demonstrator's relevance also increases. The government bears less financial risk than with cost-plus contracts, but the risk of not achieving the desired technological outcome or facing contractor performance issues is heightened.

What does 'Full and Open Competition After Exclusion of Sources' imply about the procurement process and potential bidder pool?

The phrase 'Full and Open Competition After Exclusion of Sources' suggests a nuanced procurement approach. Initially, certain sources may have been excluded from consideration, perhaps due to specific requirements, past performance issues, or a belief that only a limited number of vendors could meet the need. However, the 'after exclusion of sources' part indicates that this exclusion was either lifted or that the competition proceeded with a broader pool than initially anticipated, but not necessarily every possible vendor. This implies that while the intent was competitive, the final pool might have been smaller than a completely unrestricted 'full and open' competition. This could impact the level of price competition achieved, as fewer bidders might lead to less aggressive pricing compared to a scenario with numerous participants.

What is the significance of the NAICS code 336411 (Aircraft Manufacturing) in understanding this contract's context?

The NAICS code 336411 specifically identifies the industry sector as Aircraft Manufacturing. This is highly significant as it places the contract squarely within a core defense industrial base capability. Companies operating under this code are involved in the design, development, manufacturing, and assembly of aircraft, including military and commercial planes, helicopters, and related components. For the Department of Defense, securing capabilities within this sector is crucial for national security. Contracts like this one, even for a demonstrator, contribute to maintaining and advancing the technological edge and production capacity within this vital industry.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9123816R0089

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kratos Systems and Solutions, Inc.

Address: 101 COMMERICAL WAY UNIT D, TEHACHAPI, CA, 93561

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $54,794,993

Exercised Options: $36,609,415

Current Obligation: $35,070,855

Actual Outlays: $691,388

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline