DoD's $66.8M Sikorsky Rotor Blade Contract Awarded Without Competition

Contract Overview

Contract Amount: $66,816,871 ($66.8M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2018-01-12

End Date: 2020-10-31

Contract Duration: 1,023 days

Daily Burn Rate: $65.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 1615-01-106-1903 70150-09100-043 BLADE,MAIN ROTOR

Place of Performance

Location: STRATFORD, FAIRFIELD County, CONNECTICUT, 06614

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $66.8 million to SIKORSKY AIRCRAFT CORPORATION for work described as: 1615-01-106-1903 70150-09100-043 BLADE,MAIN ROTOR Key points: 1. Significant contract awarded to a single supplier, raising questions about competitive pricing. 2. The contract's duration of over 1000 days suggests a long-term need for these critical parts. 3. Lack of competition may lead to higher costs for taxpayers compared to a bid environment. 4. The 'Other Aircraft Parts' manufacturing code indicates a specialized component within the defense supply chain. 5. Awarded by the Defense Logistics Agency, highlighting its role in maintaining military readiness. 6. The firm fixed-price contract type offers some cost certainty but doesn't mitigate the lack of competition.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source award. Without competitive bids, it's difficult to ascertain if $66.8 million represents a fair market price for main rotor blades. The price per unit, while not explicitly provided, would be a key metric to assess value if comparable data were available. The lack of competition inherently limits the potential for cost savings that typically arise from a robust bidding process.

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. There is no indication of a competitive bidding process. This approach is typically used when a unique capability or proprietary technology is required, or in urgent situations. However, it bypasses the opportunity for multiple suppliers to offer their best pricing, potentially impacting overall cost-effectiveness.

Taxpayer Impact: Taxpayers may bear a higher cost due to the absence of competitive pressure driving down prices.

Public Impact

The primary beneficiaries are the U.S. military branches relying on Sikorsky helicopters for operational readiness. The contract ensures the supply of critical main rotor blades, essential for helicopter flight safety and performance. The geographic impact is primarily within Connecticut, where Sikorsky Aircraft Corporation is based, potentially supporting local jobs. The contract supports specialized manufacturing jobs within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potentially increases costs for taxpayers.
Sole-source awards can create vendor lock-in, reducing future flexibility and negotiation power.
The long contract duration without re-competition could mask inefficiencies or price creep over time.

Positive Signals

Firm fixed-price contract provides cost certainty for the awarded amount.
Award to an established manufacturer like Sikorsky suggests a focus on reliability and proven performance.
Ensures availability of critical components for ongoing military operations.

Sector Analysis

This contract falls within the aerospace manufacturing sector, specifically focusing on aircraft parts. The market for specialized helicopter components like main rotor blades is often concentrated among a few key manufacturers with the necessary expertise and certifications. The Defense Logistics Agency's role suggests this is part of a broader strategy to maintain and equip military aviation assets, where spending on such components can be substantial and driven by readiness requirements rather than purely commercial market dynamics.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false) and there is no information on subcontracting plans. As a sole-source award to a large corporation, it is unlikely to directly benefit small businesses through set-asides. However, Sikorsky may engage small businesses as subcontractors, though this is not specified. The absence of small business participation in the prime contract limits opportunities for this segment of the industrial base.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and potentially the Department of Defense's Inspector General, especially given the significant dollar amount and sole-source nature. Transparency is limited by the lack of a competitive bidding process. Accountability would focus on delivery schedules, quality specifications, and adherence to the firm fixed-price terms. The contract's specific oversight mechanisms are not detailed in the provided data.

Related Government Programs

Department of Defense Aircraft Procurement
Defense Logistics Agency Aviation Support
Helicopter Component Manufacturing
Military Readiness and Sustainment

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.8 million to SIKORSKY AIRCRAFT CORPORATION. 1615-01-106-1903 70150-09100-043 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 $66.8 million.

What is the period of performance?

Start: 2018-01-12. End: 2020-10-31.

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

Sikorsky Aircraft Corporation, a subsidiary of Lockheed Martin, has a long history of supplying rotorcraft and components to the U.S. military. While specific data on their past sole-source contracts for main rotor blades isn't provided here, their position as a major defense contractor suggests they have been awarded such contracts previously, often justified by proprietary technology, unique manufacturing capabilities, or urgent operational needs. Analyzing historical awards and justifications for sole-source procurements involving Sikorsky would provide further context on their track record in non-competitive environments. It's important to note that sole-source awards are exceptions, and the justification for each must be robust to ensure fair pricing and prevent potential abuses.

How does the $66.8 million value compare to market rates for similar rotor blades?

Direct comparison of the $66.8 million total contract value to market rates for similar main rotor blades is difficult without knowing the exact quantity, specifications, and unit price. However, the sole-source nature of this award raises concerns about whether the price reflects competitive market dynamics. Typically, competitive bidding allows for price discovery and can lead to lower costs. If comparable military or commercial rotor blades from other manufacturers were available, a benchmark could be established. Given the lack of competition, it is plausible that the price is higher than what might be achieved in an open bidding environment. Further analysis would require detailed specifications and quantity data.

What are the primary risks associated with awarding a contract of this magnitude without competition?

The primary risk associated with awarding a $66.8 million contract without competition is the potential for overpayment. Without competing bids, there is no market pressure to ensure the government receives the best possible price. This can lead to inflated costs for taxpayers. Another risk is reduced innovation, as there is less incentive for the sole provider to invest in cost-saving technologies or process improvements if they are guaranteed the contract. Furthermore, sole-source awards can create dependency on a single supplier, making future procurements potentially more difficult and expensive if the supplier raises prices or faces production issues. Ensuring rigorous oversight and justification for the sole-source determination is crucial to mitigate these risks.

How effective is the firm fixed-price contract type in managing costs for this sole-source award?

The firm fixed-price (FFP) contract type provides a degree of cost certainty for this sole-source award by establishing a set price for the goods. This shifts the risk of cost overruns from the government to the contractor, Sikorsky Aircraft Corporation. If Sikorsky incurs higher costs than anticipated in manufacturing the rotor blades, their profit margin will decrease, but the government's total expenditure remains capped at $66.8 million. While FFP is generally preferred for its cost control, its effectiveness in ensuring *value* for money is diminished in a sole-source context. The government still pays the negotiated price, which may be higher than a competitively determined price, even though the contractor bears the risk of production cost fluctuations.

What is the historical spending pattern for main rotor blades by the Defense Logistics Agency?

Historical spending data for main rotor blades by the Defense Logistics Agency (DLA) would reveal trends in procurement volume, pricing, and supplier base over time. Without access to DLA's specific historical contract databases, it's challenging to provide precise figures. However, the DLA is responsible for providing logistical support to the U.S. Armed Forces, including aviation components. Their spending on rotor blades is likely influenced by the size and operational tempo of the helicopter fleet, as well as the lifecycle of different aircraft models. Analyzing past DLA contracts for similar components, including both competitive and sole-source awards, would help contextualize the current $66.8 million contract in terms of its scale and frequency within the agency's overall budget for aviation parts.

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: $66,816,871

Exercised Options: $66,816,871

Current Obligation: $66,816,871

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $16,381,692

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX15D9423

IDV Type: IDC

Timeline