DoD's $84M Contract for Aircraft Parts Awarded to Sierra Nevada Company, LLC Under Other Aircraft Parts Manufacturing
Contract Overview
Contract Amount: $84,388,330 ($84.4M)
Contractor: Sierra Nevada Company, LLC
Awarding Agency: Department of Defense
Start Date: 2008-10-01
End Date: 2009-09-30
Contract Duration: 364 days
Daily Burn Rate: $231.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: CLS
Place of Performance
Location: SPARKS, WASHOE County, NEVADA, 89434
State: Nevada Government Spending
Plain-Language Summary
Department of Defense obligated $84.4 million to SIERRA NEVADA COMPANY, LLC for work described as: CLS Key points: 1. The contract value is substantial at $84.4 million. 2. Sierra Nevada Company, LLC is the sole awardee, indicating a lack of competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. The sector is 'Other Aircraft Parts and Auxiliary Equipment Manufacturing', a critical area for defense.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, while allowing flexibility, carries inherent risks of cost escalation. Without competitive bidding, it's difficult to assess if the fixed fee adequately reflects the effort or if the government is receiving optimal value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, suggesting a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition for an $84 million contract raises concerns about potential overspending and inefficient use of taxpayer funds.
Public Impact
Taxpayers may be paying more than necessary due to the absence of competitive bidding. The reliance on a single contractor could impact the availability and cost of critical aircraft parts. The long-term implications for defense readiness and supply chain resilience are unclear without competitive options.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
Positive Signals
- Award to a known entity (Sierra Nevada Company, LLC)
- Specific NAICS code indicates specialized manufacturing
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, which is vital for maintaining military aviation capabilities. Spending in this sector is often driven by defense needs and can be subject to fluctuations based on operational requirements and technological advancements.
Small Business Impact
The awardee is Sierra Nevada Company, LLC, a significant entity. There is no indication in the provided data that small businesses were involved as subcontractors or partners in this specific award, which is a missed opportunity for small business participation.
Oversight & Accountability
The 'NOT COMPETED' status suggests that standard competitive oversight processes may have been bypassed. Further review would be needed to understand the justification for this approach and ensure appropriate accountability measures were in place.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
- No small business participation indicated
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, nv, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $84.4 million to SIERRA NEVADA COMPANY, LLC. CLS
Who is the contractor on this award?
The obligated recipient is SIERRA NEVADA COMPANY, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $84.4 million.
What is the period of performance?
Start: 2008-10-01. End: 2009-09-30.
What was the justification for not competing this $84 million contract, and what steps were taken to ensure fair pricing without competitive pressure?
The justification for not competing the contract is not provided in the data. Typically, sole-source awards require a documented justification, such as a critical need or lack of qualified sources. Without competition, ensuring fair pricing relies heavily on robust government negotiation, independent cost analysis, and potentially referencing historical pricing or market research to establish a reasonable baseline.
What are the potential risks associated with a Cost Plus Fixed Fee contract for aircraft parts, especially when awarded non-competitively?
The primary risk of a Cost Plus Fixed Fee (CPFF) contract is that the contractor is reimbursed for all allowable costs plus a fixed fee. If costs escalate beyond initial estimates, the government pays more. When awarded non-competitively, the fixed fee might not be as rigorously negotiated, increasing the risk of the government paying a premium for both costs and profit, potentially leading to inefficient resource allocation and higher overall expenditure.
How does the lack of competition in this award impact the long-term availability and cost-effectiveness of critical aircraft parts for the Department of Defense?
A lack of competition can stifle innovation and reduce the incentive for cost control among suppliers. Over time, this can lead to higher prices for essential parts and potentially limit the number of available sources, creating supply chain vulnerabilities. The DoD might face challenges in securing parts at competitive rates in the future, impacting readiness and budget predictability.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
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: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 444 SALOMON CIR, SPARKS, NV, 02
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Subchapter S Corporation, Woman Owned Business
Financial Breakdown
Contract Ceiling: $105,790,554
Exercised Options: $105,790,554
Current Obligation: $84,388,330
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA862006G4026
IDV Type: IDC
Timeline
Start Date: 2008-10-01
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2014-09-24
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