DoD's $85.6M Gorgon Stare contract awarded to Sierra Nevada Company, LLC for aircraft parts

Contract Overview

Contract Amount: $85,603,093 ($85.6M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2009-02-24

End Date: 2011-08-31

Contract Duration: 918 days

Daily Burn Rate: $93.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UCA - GORGON STARE BASELINE #1 PHASE 2

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $85.6 million to SIERRA NEVADA COMPANY, LLC for work described as: UCA - GORGON STARE BASELINE #1 PHASE 2 Key points: 1. Contract awarded for aircraft parts, indicating a need for specialized components in aviation. 2. The contract's value suggests a significant investment in supporting military aviation capabilities. 3. The fixed-price contract type aims to provide cost certainty for the government. 4. The duration of the contract points to a long-term requirement for these parts. 5. The award was not competed, raising questions about potential cost efficiencies and market engagement. 6. The specific parts manufactured fall under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the parts and their intended use. The contract's value of approximately $85.6 million over its duration suggests a substantial procurement. However, the lack of competition makes it difficult to assess if the pricing is competitive or represents good value for money. Without comparable contracts or market data for these specific aircraft parts, a definitive value-for-money assessment is limited.

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 can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery and potential cost savings that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is less pressure on the contractor to offer the most competitive price.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches of the Department of Defense requiring these specific aircraft parts. The services delivered involve the manufacturing and supply of specialized aircraft parts crucial for maintaining and operating military aircraft. The geographic impact is primarily within Nevada, where Sierra Nevada Company, LLC is located, and potentially extends to military bases where the aircraft are deployed. Workforce implications include employment opportunities at Sierra Nevada Company, LLC and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher prices than a competed contract.
Sole-source awards can limit opportunities for other capable businesses to secure government contracts.
Dependence on a single supplier could pose risks if that supplier faces production issues or financial instability.

Positive Signals

The contract is awarded to a specific company, indicating a potential specialization or unique capability.
The firm fixed-price contract type provides budget predictability for the government.
The contract duration suggests a stable, long-term need for the supplied parts.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a critical component of the aerospace and defense industry. This sector supplies essential components that ensure the airworthiness and operational readiness of aircraft. Spending in this area is often driven by military modernization programs, sustainment efforts, and the need for specialized, high-reliability parts. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft components or sustainment services within the DoD.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. Therefore, the direct impact on the small business ecosystem is likely minimal, as the award went to a specific, presumably larger, entity. Without a competitive process, opportunities for small businesses to participate as prime contractors or subcontractors in this specific procurement are absent.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the terms of the firm fixed-price contract, ensuring delivery of specified parts. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Gorgon Stare Program
Air Force Sustainment Contracts
Aircraft Parts Procurement
Defense Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.6 million to SIERRA NEVADA COMPANY, LLC. UCA - GORGON STARE BASELINE #1 PHASE 2

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 $85.6 million.

What is the period of performance?

Start: 2009-02-24. End: 2011-08-31.

What is the specific nature of the 'Gorgon Stare Baseline #1 Phase 2' and how do these aircraft parts contribute to its functionality?

The Gorgon Stare program is a persistent surveillance system developed by the U.S. Air Force, designed to provide wide-area surveillance capabilities. 'Baseline #1 Phase 2' likely refers to a specific iteration or upgrade of this system. The aircraft parts procured under this contract are crucial components that enable the operation, maintenance, and potentially the enhancement of the Gorgon Stare system's airborne platforms. Without specific part numbers or descriptions, it's difficult to detail their exact function, but they are integral to the system's ability to collect and transmit intelligence data from the air.

Can the value of this contract be benchmarked against similar sole-source awards for aircraft parts?

Benchmarking this $85.6 million contract against similar sole-source awards is challenging without detailed information on the specific types of aircraft parts procured, their complexity, and the required quantities. Sole-source awards inherently lack the price discovery mechanism of competition, making direct value comparisons difficult. However, if similar, competed contracts for comparable parts exist, they could serve as a reference point. Generally, sole-source contracts may carry a premium due to the absence of competitive pressure. Further analysis would require access to detailed procurement data and technical specifications of the parts.

What are the primary risks associated with a sole-source award for critical aircraft parts?

The primary risks associated with a sole-source award for critical aircraft parts include potential overpricing due to the lack of competition, limited innovation as there's no incentive to offer better solutions, and supply chain vulnerability. If the sole-source provider experiences production issues, financial instability, or decides to discontinue the product line, the government has limited alternatives. This dependence can also lead to extended lead times and reduced flexibility in adapting to changing operational needs. Ensuring rigorous oversight and negotiation is crucial to mitigate these risks.

How does the firm fixed-price contract type impact the government's risk and the contractor's incentive?

A firm fixed-price (FFP) contract shifts most of the risk to the contractor, as the price is set regardless of the contractor's actual costs. This provides the government with cost certainty and predictability, making budgeting easier. For the contractor, it creates a strong incentive to control costs efficiently to maximize profit. However, if the scope of work is not clearly defined or if unforeseen issues arise, the contractor may incur losses, potentially leading to disputes or a desire to cut corners. For complex or R&D-heavy procurements, FFP can be less suitable than other contract types.

What is Sierra Nevada Company, LLC's track record with the Department of Defense, particularly concerning sole-source awards?

Sierra Nevada Company, LLC (SNC), now part of Sierra Nevada Corporation, has a significant history of contracting with the Department of Defense across various programs, including intelligence, surveillance, and reconnaissance (ISR) systems, electronic warfare, and aviation. While SNC has a strong reputation for innovation and delivering complex systems, specific data on their sole-source award history within the DoD would require a detailed search of federal procurement databases. Their involvement in programs like Gorgon Stare suggests a trusted relationship, which can sometimes lead to sole-source justifications, particularly for specialized or integrated systems where they possess unique expertise.

What are the historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Air Force?

Historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Air Force are substantial, reflecting the continuous need to maintain and modernize a large and complex fleet of aircraft. This category typically encompasses a wide range of components, from engine parts and avionics to structural elements and support equipment. Annual spending can fluctuate based on major upgrade programs, fleet readiness initiatives, and the retirement or introduction of new aircraft types. Analyzing trends over several years would reveal patterns related to specific aircraft platforms and the overall sustainment strategy of the Air Force.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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

Address: 444 SALOMON CIR, SPARKS, NV, 89434

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $85,603,093

Exercised Options: $85,603,093

Current Obligation: $85,603,093

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862006G4026

IDV Type: IDC

Timeline