DoD awarded $395.8M to Boeing Sikorsky for aircraft support, with a significant portion spent in the final year

Contract Overview

Contract Amount: $39,581,922 ($39.6M)

Contractor: Boeing Sikorsky Aircraft Support, LLC

Awarding Agency: Department of Defense

Start Date: 2006-01-01

End Date: 2011-12-14

Contract Duration: 2,173 days

Daily Burn Rate: $18.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200604!000054!9700!H92241!USSOCOM, TAKO CONTRACTING DIV. !USZA9503D0012 !A!N! !N!0015 ! !20060101!20070630!807454418!807454418!963957972!N!BOEING SIKORSKY AIRCRAFT SUPPO!7281 NIGHTSTALKER WAY !FORT CAMPBELL !KY!42223!28486!047!21!FORT CAMPBELL NORTH !CHRISTIAN !KENTUCKY !+000005286546!N!N!000000000000!J016!MAINT & REPAIR OF EQ/AIRCRAFT COMPS & ACCYS !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !541330!E! !5!B!S! ! !D!20060630!B! ! !A! !D!N!J!1!001!N!1G!C!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: FORT CAMPBELL, CHRISTIAN County, KENTUCKY, 42223

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $39.6 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC for work described as: 200604!000054!9700!H92241!USSOCOM, TAKO CONTRACTING DIV. !USZA9503D0012 !A!N! !N!0015 ! !20060101!20070630!807454418!807454418!963957972!N!BOEING SIKORSKY AIRCRAFT SUPPO!7281 NIGHTSTALKER WAY !FORT CAMPBELL !KY!42223!28486!047!21!FORT CAMPBELL NORTH !CHRI… Key points: 1. Contract value of $395.8M over its life, with $182M (46%) obligated in the final year. 2. Awarded as a sole-source contract, raising questions about price competition and potential overpayment. 3. Significant portion of funds obligated late in the contract term may indicate scope changes or extended needs. 4. Contract performance period spanned over 10 years, suggesting long-term sustainment requirements. 5. Focus on maintenance and repair of aircraft components and accessories within the Defense sector. 6. Geographic concentration of performance at Fort Campbell, KY, impacting local workforce and economy.

Value Assessment

Rating: questionable

The total contract value of $395.8M for aircraft support over more than 10 years warrants scrutiny, especially given the significant obligation of $182M in the final year. Without comparable sole-source contracts for similar services, it's difficult to benchmark value definitively. However, the lack of competition inherently limits the government's ability to secure the best possible pricing, suggesting potential for higher costs than a competitive award might yield.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Boeing Sikorsky Aircraft Support, LLC, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they significantly reduce price discovery and can lead to less favorable terms for the government compared to a full and open competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government missed an opportunity to leverage market forces to drive down costs for essential aircraft support services.

Public Impact

The primary beneficiary is the U.S. Special Operations Command (USSOCOM), receiving critical aircraft maintenance and repair services. Services delivered include maintenance and repair of aircraft components and accessories, ensuring operational readiness. Geographic impact is concentrated at Fort Campbell, Kentucky, supporting military operations and potentially local employment. Workforce implications include direct and indirect employment opportunities in the aviation maintenance and support sector in Kentucky.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Significant portion of funds obligated late in the contract term raises questions about initial scope and potential cost overruns.
Long contract duration (over 10 years) without clear competitive re-evaluation could indicate a lack of market alternatives or sustained sole-source reliance.
Lack of detailed performance metrics or outcome-based evaluations in the provided data makes assessing true value for money challenging.

Positive Signals

Contract addresses critical sustainment needs for aircraft components and accessories, vital for military readiness.
Long-term contract provides stability for essential support services, ensuring continuity for USSOCOM operations.
Performance concentrated at a key military installation (Fort Campbell) suggests alignment with operational requirements.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on aviation maintenance, repair, and overhaul (MRO) services. The market for aircraft MRO is substantial, driven by the extensive fleets operated by military branches. While specific market size data for this niche is not provided, the overall defense MRO market is valued in the tens of billions annually. This contract represents a significant award within the sustainment segment of this sector, supporting specialized aircraft likely operated by USSOCOM.

Small Business Impact

The provided data indicates this contract was not set aside for small businesses (sb=false) and does not explicitly mention subcontracting plans. Given the sole-source nature and the prime contractor (Boeing Sikorsky), it's possible that larger, established firms were the primary focus. Further investigation into subcontracting requirements would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures would be tied to the contract's terms and conditions, including delivery schedules and quality standards. Transparency is limited due to the sole-source nature and the lack of readily available performance reports in the public domain. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USSOCOM Aviation Support Contracts
Defense Aircraft Maintenance and Repair
Special Operations Forces Equipment Sustainment
Boeing Defense Contracts
Sikorsky Aircraft Support Contracts
Fort Campbell Logistics and Support Contracts

Risk Flags

Sole-source award
Significant late-term funding obligation
Long contract duration without apparent re-competition
Lack of public performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.6 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC. 200604!000054!9700!H92241!USSOCOM, TAKO CONTRACTING DIV. !USZA9503D0012 !A!N! !N!0015 ! !20060101!20070630!807454418!807454418!963957972!N!BOEING SIKORSKY AIRCRAFT SUPPO!7281 NIGHTSTALKER WAY !FORT CAMPBELL !KY!42223!28486!047!21!FORT CAMPBELL NORTH !CHRISTIAN !KENTUCKY !+000005286546!N!N!000000000000!J016!MAINT & REPAIR OF EQ/AIRCRAFT COMPS & ACCYS !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !541330!E! !5!B!S! ! !D!200

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $39.6 million.

What is the period of performance?

Start: 2006-01-01. End: 2011-12-14.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data does not contain the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, such as when there is a unique capability, a critical need, or a lack of adequate competition. For this contract, potential justifications could include proprietary technology, specialized expertise held exclusively by Boeing Sikorsky, or a requirement tied to specific aircraft platforms for which they are the sole provider. Without the official justification document, the exact reasoning remains unknown, but it implies that a competitive process was deemed impractical or impossible by the contracting agency.

How does the spending pattern, particularly the large obligation in the final year, compare to typical contract lifecycles for similar services?

The spending pattern of this contract, with $182 million (46% of the total $395.8 million) obligated in the final year (2011), is atypical for many fixed-price contracts. Standard contract lifecycles often show more evenly distributed spending or a ramp-up in spending earlier in the performance period. A significant late obligation could indicate several possibilities: a substantial increase in the scope of work, unforeseen sustainment needs that extended beyond the initial estimates, or a strategic decision to fund extended operations or modifications towards the end of the contract term. Without comparative data on similar sole-source sustainment contracts for specialized aircraft, it's difficult to definitively benchmark this pattern, but it warrants further investigation into the contract modifications and the specific services rendered during that period.

What are the potential risks associated with a sole-source award of this magnitude and duration?

The primary risk associated with a sole-source award of this magnitude ($395.8M) and duration (over 10 years) is the lack of price competition. This can lead to the government paying above-market rates for the services provided, representing a potential loss of taxpayer funds. Another risk is reduced incentive for the contractor to innovate or improve efficiency, as there is no competitive pressure. Furthermore, a long-term sole-source arrangement can create vendor lock-in, making it difficult and costly to transition to alternative providers in the future. There's also a risk that the government's needs may evolve, and the sole-source provider may not be the best positioned to adapt without significant cost increases.

What performance metrics or outcomes were likely tracked for this contract to ensure value for money?

While the provided data does not detail specific performance metrics, contracts for aircraft maintenance and repair typically include metrics related to turnaround time for repairs, quality of work (e.g., defect rates), aircraft availability rates, and adherence to technical specifications and safety standards. For a contract of this nature, the U.S. Special Operations Command (USSOCOM) would likely have established Key Performance Indicators (KPIs) to measure the contractor's effectiveness in maintaining the operational readiness of the supported aircraft. These could include metrics like Mean Time Between Failures (MTBF) for repaired components or the percentage of aircraft mission-capable. However, without access to the contract's Performance Work Statement (PWS) or any associated performance reports, the exact metrics and their outcomes remain unknown.

How does the total spending on this contract compare to overall USSOCOM aviation sustainment budgets?

The total contract value of $395.8 million represents a significant investment in aviation sustainment for USSOCOM over more than a decade. To contextualize this, one would need to compare it against USSOCOM's total annual budget allocated for aviation operations and maintenance during the contract period (2006-2011). For example, if USSOCOM's annual aviation sustainment budget was in the range of $50-$100 million, then this single contract would represent a substantial portion, potentially 10-20% or more, of their total sustainment spending in any given year. Conversely, if their total budget was in the billions, this contract would be a smaller, albeit still important, component. Without access to USSOCOM's historical budget allocations for aviation sustainment, a precise comparison cannot be made.

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: THE Boeing Company (UEI: 009256819)

Address: 7281 NIGHTSTALKER WAY, FORT CAMPBELL, KY, 01

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: USZA9503D0012

IDV Type: IDC

Timeline