DoD's $81.4M Boeing Sikorsky contract for air transport support lacked competition, raising value concerns

Contract Overview

Contract Amount: $81,425,614 ($81.4M)

Contractor: Boeing Sikorsky Aircraft Support, LLC

Awarding Agency: Department of Defense

Start Date: 2015-01-01

End Date: 2016-06-30

Contract Duration: 546 days

Daily Burn Rate: $149.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK ORDER FOR ORDERING PERIOD 1 JANUARY 2015 - 31 DECEMBER 2015 FOR THE CPFF AND COST CLINS.

Place of Performance

Location: FORT CAMPBELL, CHRISTIAN County, KENTUCKY, 42223

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $81.4 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC for work described as: TASK ORDER FOR ORDERING PERIOD 1 JANUARY 2015 - 31 DECEMBER 2015 FOR THE CPFF AND COST CLINS. Key points: 1. The contract was awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. Performance period extended beyond the initial ordering period, suggesting potential scope creep or evolving needs. 3. The cost-plus-fixed-fee structure may incentivize higher spending without strict cost controls. 4. The specific services provided under this task order are not detailed, making direct performance assessment difficult. 5. The contract's value is significant, representing a substantial investment in specialized aviation support. 6. The lack of a small business set-aside indicates a focus on large prime contractors for this requirement.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and limited public detail on the specific services rendered. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex services, can lead to higher overall costs if not meticulously managed. Without comparable contract data or a competitive baseline, it's difficult to definitively assess if the $81.4 million spent represents a fair market price or optimal value for the support provided to U.S. Special Operations Command.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or in urgent situations. The absence of competition means that Boeing Sikorsky Aircraft Support, LLC was the only provider considered, which can limit opportunities for price negotiation and potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from competitive bidding processes. This can result in higher overall expenditure for the government.

Public Impact

U.S. Special Operations Command personnel and operations benefit from specialized aviation support. The contract ensures the availability of critical air transportation services for special operations missions. The geographic impact is primarily within Kentucky, where the contractor is located, but the services support national security objectives. The contract supports a specialized workforce within the aerospace and defense sector, likely involving highly skilled technicians and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Cost-plus-fixed-fee structure offers limited incentive for cost savings.
Limited transparency on specific services and performance metrics.
Extended performance period beyond initial ordering period warrants scrutiny.
Sole-source award bypasses potential benefits of competitive market forces.

Positive Signals

Contract supports critical national security missions for Special Operations Command.
Boeing Sikorsky is a known entity with established capabilities in aviation support.
Task order addresses a specific need within the DoD's aviation support framework.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aviation support services. The market for such specialized support is often dominated by a few large, established prime contractors due to the high technical expertise, security clearances, and infrastructure required. While the overall market size for defense aviation support is substantial, individual task orders like this represent specific, often niche, requirements that may not be widely competed.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the prime contractor is Boeing Sikorsky Aircraft Support, LLC, a large business. There is no explicit information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless significant subcontracting opportunities were subsequently awarded by the prime.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Special Operations Command's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight by the Department of Defense Office of Inspector General. Transparency is limited by the sole-source nature and the specific details of the services provided, but contract awards and basic information are generally available through federal procurement databases.

Related Government Programs

Special Operations Forces Support Contracts
Aviation Maintenance and Repair Services
Logistics and Transportation Support
Department of Defense Aircraft Services

Risk Flags

Lack of Competition
Cost-Plus Contract Type
Extended Performance Period
Sole-Source Award Justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.4 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC. TASK ORDER FOR ORDERING PERIOD 1 JANUARY 2015 - 31 DECEMBER 2015 FOR THE CPFF AND COST CLINS.

Who is the contractor on this award?

The obligated recipient is BOEING SIKORSKY AIRCRAFT SUPPORT, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $81.4 million.

What is the period of performance?

Start: 2015-01-01. End: 2016-06-30.

What specific aviation support services were provided under this task order?

The provided data indicates the task order was for 'Other Support Activities for Air Transportation' under a Cost Plus Fixed Fee (CPFF) contract type. While the specific services are not detailed in the provided snippet, this category typically encompasses a range of activities such as maintenance, repair, overhaul, logistics support, and potentially operational support for aircraft. Given the contractor is Boeing Sikorsky Aircraft Support, LLC, it is highly probable that the services relate to the maintenance and sustainment of Sikorsky-manufactured aircraft, which are widely used by special operations forces. However, without access to the full contract statement of work, the precise nature and scope of these services remain unspecified.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or if the contractor is the only source capable of meeting specific performance requirements. For specialized aviation support, particularly for unique platforms or complex sustainment needs, a sole-source justification might be based on the original equipment manufacturer's expertise or specific contractual relationships. The rationale for this specific award would be detailed in the Justification and Approval (J&A) document, which is not provided here.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact overall spending compared to other contract types?

The Cost Plus Fixed Fee (CPFF) contract type involves the government reimbursing the contractor for all allowable costs incurred, plus a fixed fee representing profit. This structure can lead to higher overall spending because the contractor has less financial incentive to control costs, as their profit is fixed regardless of the final cost. If costs escalate, the government pays more. In contrast, fixed-price contracts provide a strong incentive for contractors to manage costs efficiently to maximize their profit margin. While CPFF is often used for research and development or complex services where cost is difficult to estimate upfront, it requires robust government oversight to manage expenditures effectively and prevent cost overruns.

What is the significance of the contract performance period extending beyond the initial ordering period?

The contract was awarded for an ordering period from January 1, 2015, to December 31, 2015, but the performance period extended to June 30, 2016. This indicates that the task order allowed for work to be performed beyond the initial ordering period. This can happen for several reasons: the nature of the services requires a longer execution timeline, there were delays in the ordering process, or the government exercised options to extend performance. An extended performance period, especially when coupled with a sole-source award, warrants scrutiny to ensure that the government is still receiving fair value and that the extended timeline is justified by the evolving needs of the program.

What are the potential risks associated with a sole-source contract for aviation support?

The primary risk associated with a sole-source contract for aviation support is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may pay a premium for services that could potentially be obtained at a lower price from other qualified vendors. Additionally, sole-source awards can reduce transparency and limit the government's leverage in negotiating terms and conditions. There's also a risk of vendor lock-in, where the government becomes dependent on a single provider, potentially hindering future flexibility and innovation. For critical aviation support, this dependency could also pose a risk if the sole provider experiences financial difficulties or operational issues.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: H9224111R0003

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 7244B NIGHTSTALKER WAY, FORT CAMPBELL, KY, 42223

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $81,425,614

Exercised Options: $81,425,614

Current Obligation: $81,425,614

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9224113D0007

IDV Type: IDC

Timeline