DoD awards $44.4M to Sikorsky for H-60 helicopter sustainment, raising competition concerns

Contract Overview

Contract Amount: $44,421,474 ($44.4M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Defense

Start Date: 2008-12-02

End Date: 2010-04-30

Contract Duration: 514 days

Daily Burn Rate: $86.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROVIDE INTEGRATED SERVICES AND SUPPLIES TO INCLUDE TECHNICAL, ENGINEERING, AND LOGISTICAL SERVICES (TELS) AND 100% MATERIAL TO SUPPORT CORPUS CHRISTI ARMY DEPOT (CCAD) AND US ARMY AVIATION AND MISSILE COMMAND (AMCOM) IN THE OVERHAUL, REPAIR AND RECAPITALIZATION OF THE H-60 WEAPON SYSTEM.

Place of Performance

Location: CORPUS CHRISTI, NUECES County, TEXAS, 78419

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $44.4 million to SIKORSKY AIRCRAFT CORPORATION for work described as: PROVIDE INTEGRATED SERVICES AND SUPPLIES TO INCLUDE TECHNICAL, ENGINEERING, AND LOGISTICAL SERVICES (TELS) AND 100% MATERIAL TO SUPPORT CORPUS CHRISTI ARMY DEPOT (CCAD) AND US ARMY AVIATION AND MISSILE COMMAND (AMCOM) IN THE OVERHAUL, REPAIR AND RECAPITALIZATION OF THE H-60 WEAPO… Key points: 1. The contract focuses on critical technical, engineering, and logistical support for H-60 helicopter sustainment. 2. Sikorsky Aircraft Corporation is the sole awardee, indicating a lack of broader market competition. 3. The firm-fixed-price contract type aims to control costs for overhaul, repair, and recapitalization. 4. The award supports the Corpus Christi Army Depot (CCAD) and AMCOM, highlighting its strategic importance.

Value Assessment

Rating: fair

The $44.4 million award for H-60 sustainment services appears to be within a reasonable range for specialized aviation support. However, without direct comparable contracts for similar scope and complexity, a precise pricing assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, suggesting a sole-source award. This limits price discovery and potentially leads to higher costs compared to a competitive environment.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these essential aviation support services.

Public Impact

Ensures continued operational readiness of the H-60 fleet, vital for military operations. Supports critical maintenance and repair functions at key Army aviation depots. Potential for increased costs due to sole-source nature impacts overall defense budget allocation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Lack of transparency in pricing due to no-bid nature.
Potential for cost overruns without competitive pressure.

Positive Signals

Supports critical military aviation systems.
Ensures depot-level maintenance capabilities.
Firm-fixed-price contract provides cost certainty.

Sector Analysis

Engineering services for defense applications are highly specialized. Spending benchmarks for aviation sustainment can vary significantly based on system complexity and required support levels. This award falls within the defense sector's significant investment in maintaining aging aircraft fleets.

Small Business Impact

This contract was awarded directly to Sikorsky Aircraft Corporation and does not indicate any subcontracting opportunities for small businesses. The nature of specialized aviation sustainment often favors large, established prime contractors.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and prevent potential waste. Further oversight may be needed to confirm the necessity of a non-competitive award and explore future competitive opportunities.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Potential for price escalation
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.4 million to SIKORSKY AIRCRAFT CORPORATION. PROVIDE INTEGRATED SERVICES AND SUPPLIES TO INCLUDE TECHNICAL, ENGINEERING, AND LOGISTICAL SERVICES (TELS) AND 100% MATERIAL TO SUPPORT CORPUS CHRISTI ARMY DEPOT (CCAD) AND US ARMY AVIATION AND MISSILE COMMAND (AMCOM) IN THE OVERHAUL, REPAIR AND RECAPITALIZATION OF THE H-60 WEAPON SYSTEM.

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 $44.4 million.

What is the period of performance?

Start: 2008-12-02. End: 2010-04-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Agencies must still conduct market research and negotiate pricing to ensure it is fair and reasonable, often by benchmarking against similar services or historical data, though competitive pricing is generally preferred.

What are the long-term cost implications of relying on a sole-source provider for critical H-60 sustainment services?

Long-term reliance on a sole-source provider can lead to escalating costs due to a lack of competitive pressure. Without market alternatives, the provider may increase prices over time. This can strain the defense budget and reduce the funds available for other critical programs or modernization efforts.

How does this contract contribute to the overall readiness and modernization of the H-60 fleet?

This contract directly supports the operational readiness of the H-60 fleet by ensuring essential overhaul, repair, and recapitalization services are performed. It maintains the airworthiness and capability of these vital aircraft, which are crucial for various military missions. However, it does not inherently address modernization efforts beyond sustainment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

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: $44,421,474

Exercised Options: $44,421,474

Current Obligation: $44,421,474

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ09D0029

IDV Type: IDC

Timeline