DoD's $112.5M Boeing Sikorsky contract for aircraft support lacked competition, raising value concerns

Contract Overview

Contract Amount: $112,537,212 ($112.5M)

Contractor: Boeing Sikorsky Aircraft Support, LLC

Awarding Agency: Department of Defense

Start Date: 2015-12-22

End Date: 2017-06-30

Contract Duration: 556 days

Daily Burn Rate: $202.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BSAS CY16 OMNIBUS ORDER

Place of Performance

Location: FORT CAMPBELL, CHRISTIAN County, KENTUCKY, 42223

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $112.5 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC for work described as: BSAS CY16 OMNIBUS ORDER Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Performance risk appears moderate given the fixed-fee structure, but oversight is crucial. 3. The contract duration of 556 days is relatively short for complex aircraft support. 4. Sector positioning is within specialized aerospace support for military operations. 5. No small business set-aside was included, indicating a focus on large prime contractors.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns if not rigorously monitored. Without comparable contracts or market data, it's difficult to definitively assess if the $112.5 million represents a fair price for the services rendered. The absence of competition suggests potential for inflated costs compared to a more open bidding process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically reserved for situations where only one vendor possesses the necessary capabilities or proprietary technology. The lack of competition means that Boeing Sikorsky Aircraft Support, LLC was the only bidder, which can lead to higher prices as there is no market pressure to offer the most competitive rate.

Taxpayer Impact: Taxpayers may have paid a premium for this aircraft support due to the absence of competitive bidding. The government did not benefit from the price reductions that typically result from a competitive procurement process.

Public Impact

U.S. Special Operations Command (SOCOM) personnel and operations benefit from the continued availability of supported aircraft. Services delivered include essential maintenance, repair, and logistical support for critical aviation assets. The geographic impact is primarily within Kentucky, where the contract is administered. Workforce implications include direct employment for Boeing Sikorsky personnel and potential indirect support roles.

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 pricing due to non-competitive nature.
Potential for cost creep in CPFF contracts if not closely managed.

Positive Signals

Contract awarded to a known entity with established capabilities in aircraft support.
Fixed fee component provides some cost certainty for the government.
Supports critical operational needs for U.S. Special Operations Command.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on specialized support services for military aircraft. The market for such services is often characterized by high barriers to entry due to technical expertise, security clearances, and established relationships with government agencies. Spending in this niche area is critical for maintaining operational readiness of specialized military assets, and contracts are often long-term and high-value.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contractor, Boeing Sikorsky Aircraft Support, LLC, is a large business. There is no information provided regarding subcontracting plans or opportunities for small businesses within this specific award, which is common for sole-source, specialized support contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command contracting and program management offices. As a sole-source award, rigorous oversight of performance, cost, and adherence to contract terms is essential to ensure value for money. Transparency may be limited due to the non-competitive nature, but internal government audits and reviews would be expected to monitor contractor performance and expenditures.

Related Government Programs

Defense Logistics Agency (DLA) Aviation Support Contracts
Air Force Materiel Command Aircraft Maintenance
Naval Air Systems Command (NAVAIR) Support Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (CPFF)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $112.5 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC. BSAS CY16 OMNIBUS ORDER

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 $112.5 million.

What is the period of performance?

Start: 2015-12-22. End: 2017-06-30.

What is the historical spending pattern for Boeing Sikorsky Aircraft Support, LLC with the Department of Defense?

Analyzing historical spending with Boeing Sikorsky Aircraft Support, LLC requires access to broader federal procurement databases beyond this single contract. However, given Boeing's significant role in defense contracting, it is reasonable to assume a substantial history of awards. This specific contract, valued at approximately $112.5 million over its period of performance, represents a notable investment. To understand the full pattern, one would need to examine contract vehicles, award types (competitive vs. sole-source), and spending trends across different DoD agencies over multiple fiscal years. This would reveal if this sole-source award is an anomaly or part of a consistent strategy for acquiring specialized support services from this contractor.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar aircraft support services?

The Cost Plus Fixed Fee (CPFF) contract type, used here, reimburses the contractor for allowable costs plus a fixed fee representing profit. This structure is often employed when the scope of work is not precisely defined or when there's uncertainty in costs. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but can be more flexible for evolving requirements. However, FFP contracts generally provide better incentives for cost control by the contractor. For specialized aircraft support, a mix of contract types might be seen, with FFP used for well-defined services and CPFF for more developmental or uncertain tasks. The choice depends on risk assessment and the ability to define the work scope.

What are the specific risks associated with sole-source procurements in the defense sector?

Sole-source procurements in the defense sector carry several inherent risks. The most significant is the lack of price competition, which can lead to inflated costs for the government as the contractor faces no market pressure to offer the lowest price. This can result in a poor value for taxpayer money. Additionally, sole-source awards can stifle innovation by limiting opportunities for new or smaller companies to enter the market and demonstrate their capabilities. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, potentially reducing leverage in future negotiations. Ensuring robust oversight and justification for sole-source awards is critical to mitigate these risks.

What performance metrics or Key Performance Indicators (KPIs) are typically used to evaluate aircraft support contracts like this one?

For aircraft support contracts, performance metrics often revolve around availability, reliability, and turnaround time for maintenance and repairs. Key Performance Indicators (KPIs) might include aircraft mission capable rates, mean time between failures (MTBF) for critical components, on-time delivery of parts and services, and adherence to maintenance schedules. For a CPFF contract, tracking the efficiency of resource utilization and cost performance against the estimated cost baseline is also crucial. The government would likely establish specific, measurable, achievable, relevant, and time-bound (SMART) KPIs within the contract's Performance Work Statement (PWS) to objectively assess the contractor's performance and ensure mission requirements are met.

What is the typical duration and value range for similar aircraft support contracts awarded by the Department of Defense?

The duration and value of similar aircraft support contracts within the Department of Defense can vary significantly based on the type of aircraft, the scope of services required (e.g., depot maintenance, component repair, logistics), and the specific branch of service. Contracts can range from short-term, task-order-based agreements to multi-year, comprehensive support programs. Values can span from a few million dollars for specific component repairs to hundreds of millions or even billions for full-spectrum fleet support. A $112.5 million contract over approximately 1.5 years, as indicated here, falls within a moderate range for specialized, but not necessarily fleet-wide, support services. Longer-term, broader contracts often exceed this value significantly.

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

Offers Received: 1

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: $127,083,354

Exercised Options: $127,083,354

Current Obligation: $112,537,212

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9224113D0007

IDV Type: IDC

Timeline