DoD awards $54.1M for helicopter rotor blades, with Sikorsky Aircraft Corporation as the sole provider

Contract Overview

Contract Amount: $54,106,700 ($54.1M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2017-04-11

End Date: 2020-04-30

Contract Duration: 1,115 days

Daily Burn Rate: $48.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BLADE, MAIN ROTOR

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $54.1 million to SIKORSKY AIRCRAFT CORPORATION for work described as: BLADE, MAIN ROTOR Key points: 1. The contract value of $54.1 million for helicopter rotor blades represents a significant investment in aviation sustainment. 2. Sole-source procurement raises concerns about potential overpricing and lack of competitive pressure to innovate. 3. The duration of the contract (1115 days) suggests a long-term need for these critical components. 4. The absence of a small business set-aside indicates this contract was not specifically targeted to support smaller enterprises. 5. The fixed-price contract type aims to provide cost certainty for the government, shifting some risk to the contractor. 6. The procurement falls under the 'Other Aircraft Parts' manufacturing NAICS code, highlighting a specialized industrial segment.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the $54.1 million price reflects fair market value. The lack of transparency inherent in sole-source awards means we cannot compare pricing against alternative suppliers or assess if cost efficiencies were achieved through competition. The government may have paid a premium for guaranteed supply from a single source.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Sikorsky Aircraft Corporation, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in situations where only one responsible source can fulfill the requirement. The lack of competition means potential cost savings and innovation that could arise from a bidding process were not realized.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This can result in less efficient use of public funds compared to competitively awarded contracts.

Public Impact

The primary beneficiaries are the U.S. military units relying on helicopters equipped with these specific rotor blades for operational readiness. The services delivered include the manufacturing and supply of critical helicopter components, ensuring the continued functionality of aviation assets. The geographic impact is primarily national, supporting defense operations across various theaters, with manufacturing likely concentrated in Connecticut. Workforce implications include the employment of skilled labor in aerospace manufacturing, particularly at Sikorsky Aircraft Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the sole-source justification process.
Dependence on a single supplier creates supply chain risk.
No explicit small business subcontracting goals were identified, potentially limiting opportunities for smaller firms.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Sikorsky Aircraft Corporation is a known entity with established manufacturing capabilities in aerospace.
Contract ensures continued availability of critical helicopter components for defense operations.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, significant R&D investment, and stringent quality control requirements. This contract for helicopter rotor blades falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category. The defense industry, a major consumer of such components, often relies on specialized suppliers like Sikorsky due to the complex engineering and safety standards involved. Spending in this sub-sector is driven by military modernization, sustainment needs, and global security demands.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for them. As a sole-source award to a large corporation, it bypasses the typical mechanisms designed to funnel opportunities to the small business ecosystem. While Sikorsky may engage small businesses as suppliers, this contract structure does not inherently promote their participation or growth within the federal contracting landscape.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the relevant Inspector General for the Department of Defense. The firm fixed-price nature of the contract provides a degree of financial oversight by establishing a ceiling cost. However, the sole-source justification and the absence of competitive bidding limit the transparency and accountability typically associated with a robust procurement process.

Related Government Programs

DoD Helicopter Procurement
Aerospace Component Manufacturing
Defense Logistics Agency Contracts
Sikorsky Aircraft Corporation Contracts

Risk Flags

Sole Source Justification
Lack of Competition
Potential for Overpricing
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.1 million to SIKORSKY AIRCRAFT CORPORATION. BLADE, MAIN ROTOR

Who is the contractor on this award?

The obligated recipient is SIKORSKY AIRCRAFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $54.1 million.

What is the period of performance?

Start: 2017-04-11. End: 2020-04-30.

What is the historical spending pattern for helicopter rotor blades by the Department of Defense?

Analyzing historical spending on helicopter rotor blades by the DoD requires a deep dive into procurement databases, filtering by specific part numbers, NAICS codes (like 336413), and contractor names. Without access to such granular data, a precise historical trend is difficult to establish. However, it's reasonable to infer that spending fluctuates based on fleet modernization programs, operational tempo, and the lifecycle of existing helicopter platforms. Contracts for components like rotor blades are often long-term sustainment efforts, indicating consistent, albeit variable, annual expenditures to maintain readiness across various helicopter fleets. The sole-source nature of this specific award suggests that for certain critical components, the DoD may have limited options, leading to potentially higher or more stable spending with a particular manufacturer over time.

How does the price of these rotor blades compare to similar components purchased competitively?

Direct price comparison is challenging for this sole-source contract. Competitive procurements allow for benchmarking against multiple bids, revealing market-driven pricing. In a sole-source scenario, the government relies on negotiation and potentially cost-plus-incentive-fee structures (though this contract is fixed-price) to ensure value. Without comparable competitive bids for identical or highly similar rotor blades, it's impossible to definitively state if the $54.1 million represents a fair market price. The absence of competition means the government lacks the leverage to negotiate based on multiple offers, potentially resulting in a higher unit cost than if the contract had been competed.

What are the primary risks associated with a sole-source award for critical aircraft components?

The primary risks associated with a sole-source award for critical aircraft components like rotor blades are multifaceted. Firstly, there's a significant risk of inflated pricing due to the lack of competitive pressure, potentially leading to inefficient use of taxpayer funds. Secondly, dependence on a single supplier creates supply chain vulnerability; any disruption at the contractor's facility (e.g., production issues, labor disputes, natural disasters) could severely impact military readiness. Thirdly, sole-source contracts can stifle innovation, as the incumbent contractor may have less incentive to invest in developing more cost-effective or technologically advanced alternatives. Finally, the lack of transparency in the justification and negotiation process can obscure potential conflicts of interest or suboptimal deal-making.

What is Sikorsky Aircraft Corporation's track record with the Department of Defense for similar contracts?

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long and extensive history of contracting with the Department of Defense, particularly for helicopters and related components. They are a primary manufacturer for numerous military rotorcraft platforms, including the Black Hawk, Seahawk, and Pave Hawk families. Their track record typically involves large, complex, and often sole-source or limited-competition contracts for aircraft production, upgrades, and sustainment. While generally recognized for its manufacturing capabilities and product quality, Sikorsky, like other major defense contractors, has been subject to scrutiny regarding pricing and contract terms in various awards over the years. Specific performance data and historical pricing for rotor blade contracts would require detailed analysis of past solicitations and awards.

How does the contract duration (1115 days) impact the overall value and risk assessment?

The contract duration of 1115 days (approximately three years) indicates a sustained need for these rotor blades, suggesting they are critical for ongoing operations or a specific program phase. For the government, a longer duration can offer supply chain stability and predictability, potentially simplifying planning and reducing the frequency of contract actions. However, it also locks the government into a single supplier for an extended period, increasing the risk associated with the sole-source nature mentioned previously. From a contractor's perspective, it provides revenue certainty. The value assessment must consider the total cost over this period against the operational necessity and the potential risks of being tied to one provider.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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 (UEI: 834951691)

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: $54,106,700

Exercised Options: $54,106,700

Current Obligation: $54,106,700

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $13,731,446

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX15D9423

IDV Type: IDC

Timeline