DoD's $104M Boeing Sikorsky contract for aircraft spares and repairs awarded without competition

Contract Overview

Contract Amount: $104,094,963 ($104.1M)

Contractor: Boeing Sikorsky Aircraft Support, LLC

Awarding Agency: Department of Defense

Start Date: 2018-01-01

End Date: 2018-12-31

Contract Duration: 364 days

Daily Burn Rate: $286.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SPARES AND REPAIRS

Place of Performance

Location: FORT CAMPBELL, CHRISTIAN County, KENTUCKY, 42223

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $104.1 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC for work described as: SPARES AND REPAIRS Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to higher costs if not managed closely. 2. The contract was not competed, raising questions about potential price efficiencies and market responsiveness. 3. Performance period of one year (2018) suggests a tactical need rather than a long-term strategic acquisition. 4. The specific North American Industry Classification System (NAICS) code '488190' indicates a focus on support activities for air transportation. 5. The contract's value of over $104 million warrants scrutiny regarding its necessity and cost-effectiveness. 6. The absence of competition limits the ability to benchmark pricing against market alternatives.

Value Assessment

Rating: questionable

The contract's value of $104 million for a single year of spares and repairs is substantial. Without a competitive bidding process, it is difficult to assess if the pricing represents fair market value. Cost-plus-fixed-fee contracts, while offering flexibility, can incentivize contractors to incur higher costs to increase their fee, necessitating robust oversight. Benchmarking against similar sole-source contracts for aircraft support would be crucial for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential vendors. This approach is typically used when only one vendor can provide the required goods or services, or in urgent situations. The lack of competition means that the government did not benefit from the price discovery and potential cost savings that a competitive bidding process could have offered.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The government's negotiating position is also weakened without alternative offers.

Public Impact

The Department of Defense benefits from the continued availability of essential spares and repair services for its aircraft fleet. This contract supports the operational readiness of military aviation assets, crucial for national security missions. The services are likely delivered at a specific military installation or contractor facility within Kentucky. The contract may indirectly support a workforce skilled in aerospace maintenance and repair, though specific employment figures are not provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-plus-fixed-fee structure requires diligent oversight to prevent cost overruns.
Sole-source award limits transparency in pricing and vendor selection.
Short performance period (one year) might indicate a reactive procurement rather than strategic planning.

Positive Signals

Ensures availability of critical spares and repair services for DoD aircraft.
Supports the operational readiness of military aviation assets.
Contract awarded to a known entity (Boeing Sikorsky) potentially leveraging existing expertise and supply chains.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance, repair, and overhaul (MRO) services. The market for military aircraft MRO is substantial, often characterized by long-term relationships between defense contractors and government agencies due to the specialized nature of the equipment. Spending benchmarks for similar support contracts can vary widely based on aircraft type, age, and operational tempo, but contracts in the tens to hundreds of millions of dollars for comprehensive support are not uncommon.

Small Business Impact

The data indicates this contract was not competed and does not specify any small business set-aside provisions. Therefore, it is unlikely that small businesses were directly involved as prime contractors. There is no information provided regarding subcontracting plans, so the impact on the small business ecosystem is unclear, but typically sole-source awards offer fewer opportunities for small business participation compared to competed contracts.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, potentially involving the Defense Contract Management Agency (DCMA) for performance monitoring. As a sole-source award, transparency might be limited compared to competed contracts. Accountability would be driven by the terms of the Cost Plus Fixed Fee agreement and performance metrics outlined in the contract. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair Services
Aviation Logistics Support
Defense Procurement
Sole-Source Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding
Potential for cost overruns without strong oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $104.1 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC. SPARES AND REPAIRS

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 $104.1 million.

What is the period of performance?

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

What is the track record of Boeing Sikorsky Aircraft Support, LLC in fulfilling similar DoD contracts?

Boeing Sikorsky Aircraft Support, LLC, as a major defense contractor, likely has an extensive history of fulfilling contracts for the Department of Defense, including those related to aircraft maintenance, repair, and spare parts. Their track record would typically be assessed based on past performance metrics, on-time delivery rates, quality of work, and adherence to budget constraints on previous agreements. Government contract databases and past performance reviews would provide specific details on their reliability and effectiveness in executing similar scope-of-work contracts. Given their established presence, it's probable they possess the necessary infrastructure, expertise, and security clearances to support complex military aviation requirements.

How does the $104 million contract value compare to similar sole-source aircraft support contracts awarded by the DoD?

Comparing this $104 million contract value requires identifying similar sole-source awards for aircraft spares and repairs within the DoD. Factors influencing value include the specific aircraft platforms supported, the scope of services (e.g., depot-level maintenance, component repair, spare parts provisioning), the duration of the contract, and the operational tempo of the supported fleet. Without access to a comprehensive database of comparable sole-source contracts, a precise benchmark is difficult. However, for specialized, high-value military aircraft, annual support costs in the tens to hundreds of millions are not unusual, especially when competition is limited or non-existent due to proprietary technology or unique support requirements.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for aircraft spares and repairs?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved in a competed environment. The government has less leverage to negotiate favorable terms. Secondly, the Cost-Plus-Fixed-Fee (CPFF) structure, while providing flexibility for evolving requirements, carries the risk of cost escalation. The contractor is reimbursed for allowable costs plus a fixed fee, which can incentivize less stringent cost control if oversight is inadequate. This necessitates robust government oversight to scrutinize costs, ensure efficiency, and prevent unnecessary expenditures to protect taxpayer interests.

What is the expected effectiveness of this contract in ensuring the operational readiness of DoD aircraft?

The effectiveness of this contract in ensuring operational readiness hinges on several factors. Assuming Boeing Sikorsky Aircraft Support, LLC has a strong performance history and the contract terms adequately define service level agreements (SLAs) and delivery timelines for spares and repairs, it should contribute positively to maintaining aircraft availability. The CPFF structure, if managed with diligent oversight, should allow for necessary maintenance and parts acquisition. However, the lack of competition might mean that the most innovative or cost-effective solutions are not explored, potentially impacting long-term readiness or sustainment efficiency compared to a scenario with broader market engagement.

What have been historical spending patterns for aircraft spares and repairs by the Department of Defense, and how does this contract fit?

The Department of Defense historically spends billions of dollars annually on aircraft maintenance, repair, and overhaul (MRO), including the procurement of spares. This spending is driven by the large and complex military aviation inventory. Contracts for these services range from small, specific repair orders to large, comprehensive sustainment programs. This $104 million contract, awarded in 2018 for a one-year period, represents a specific allocation within the broader DoD aviation sustainment budget. Its sole-source nature suggests it addresses a particular need where competition was deemed impractical or unnecessary at that time, fitting into the overall pattern of securing essential support for military readiness.

What are the implications of the 'Other Support Activities for Air Transportation' NAICS code for this contract?

The NAICS code 488190, 'Other Support Activities for Air Transportation,' indicates that the contract's scope likely involves services beyond basic aircraft repair. This could encompass a range of activities such as ground support, air traffic control support, aircraft component maintenance, parts warehousing, logistics management, and potentially specialized technical services related to air transportation operations. For the DoD, this suggests the contract is crucial for maintaining the operational ecosystem surrounding their aircraft, ensuring not just the airworthiness of the planes themselves but also the supporting infrastructure and services required for their effective deployment and sustainment.

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

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: $104,094,963

Exercised Options: $104,094,963

Current Obligation: $104,094,963

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9224113D0007

IDV Type: IDC

Timeline