DoD's $97M contract for aircraft parts awarded to Sierra Nevada Company, LLC, with no competition

Contract Overview

Contract Amount: $97,192,939 ($97.2M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2010-04-06

End Date: 2012-08-31

Contract Duration: 878 days

Daily Burn Rate: $110.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BASIC BOA ORDER

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $97.2 million to SIERRA NEVADA COMPANY, LLC for work described as: BASIC BOA ORDER Key points: 1. The contract's value of $97.2 million over its period of performance suggests a significant investment in specialized aircraft components. 2. The absence of competition raises concerns about potential overpricing and the government's ability to secure the best value. 3. The contract's duration of 878 days indicates a long-term need for these specific aircraft parts. 4. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code points to a niche market for these components. 5. The award to Sierra Nevada Company, LLC, without competition, warrants scrutiny of the justification for sole-source procurement.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs if not managed carefully, as the contractor is reimbursed for allowable costs plus a fixed fee. Without comparative pricing from other vendors, it's difficult to definitively assess if the $97.2 million represents a fair market price for the aircraft parts and auxiliary equipment provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Sierra Nevada Company, LLC, was considered. The data indicates the contract was 'NOT COMPETED.' This approach bypasses the standard competitive bidding process, which typically involves soliciting offers from multiple qualified suppliers to ensure the government receives the most advantageous terms and pricing.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through a competitive bidding environment.

Public Impact

The primary beneficiaries of this contract are likely the Department of the Air Force and potentially other branches of the Department of Defense requiring specialized aircraft parts. The services delivered include the manufacturing and supply of 'Other Aircraft Parts and Auxiliary Equipment,' crucial for maintaining and operating specific aircraft. The geographic impact is primarily centered around the operations of Sierra Nevada Company, LLC, and the military installations where these parts are deployed. Workforce implications include employment opportunities within Sierra Nevada Company, LLC, and potentially its supply chain, in the specialized manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated costs for taxpayers.
Sole-source awards can limit innovation by not engaging a broader market of potential suppliers.
The CPFF contract type requires robust oversight to prevent cost overruns.

Positive Signals

Award to an established company, Sierra Nevada Company, LLC, may indicate reliability in delivery.
The contract duration suggests a stable, long-term need, potentially leading to predictable supply chain management.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high technological complexity, stringent quality requirements, and often, long product development cycles. Contracts for aircraft parts fall within this domain, where specialized knowledge and manufacturing capabilities are paramount. The NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' signifies a segment focused on components beyond engines and airframes, such as avionics, landing gear, or specialized systems. Spending in this sector is substantial, driven by military readiness, modernization programs, and commercial aviation demands. Benchmarking this specific contract's value against broader industry spending is difficult without more granular data on the specific parts procured.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a specific small business set-aside component based on the provided data (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses stemming from this particular award. The focus remains on the prime contractor, Sierra Nevada Company, LLC. The absence of small business participation in this sole-source award means no direct benefit to the small business ecosystem through this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a Cost Plus Fixed Fee (CPFF) contract, rigorous monitoring of allowable costs and the fixed fee is essential. Transparency is limited by the sole-source nature of the award, as the justification for not competing is not publicly detailed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or closeout.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency Contracts
Air Force Aviation Support
Specialized Manufacturing Contracts
Sole-Source Defense Awards

Risk Flags

Sole-source award lacks transparency and competitive pricing.
Potential for cost overruns due to CPFF contract type.
Limited insight into specific justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.2 million to SIERRA NEVADA COMPANY, LLC. BASIC BOA ORDER

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 $97.2 million.

What is the period of performance?

Start: 2010-04-06. End: 2012-08-31.

What was the specific justification for awarding this contract on a sole-source basis to Sierra Nevada Company, LLC?

The provided data indicates the contract was 'NOT COMPETED' and awarded on a sole-source basis. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or in cases of urgent and compelling need. Without further documentation from the awarding agency (Department of the Air Force), the precise justification remains unknown. Common reasons include unique capabilities of the contractor, proprietary technology, or a lack of available alternatives in the market for the specific parts required. This lack of competition means taxpayers did not benefit from potential cost savings that could arise from a competitive bidding process.

How does the $97.2 million contract value compare to similar aircraft parts procurements by the DoD?

Direct comparison of the $97.2 million contract value to similar aircraft parts procurements is challenging without knowing the specific types of parts and their complexity. However, for a contract spanning approximately two years (April 2010 to August 2012), $97.2 million represents a substantial investment. The fact that it was a sole-source award suggests these might be highly specialized or unique components for which few, if any, alternative suppliers exist. Generally, competitive procurements for aircraft parts can vary widely in value, from thousands for individual components to billions for major system overhauls. The absence of competition here means a direct benchmark against market rates is not feasible, raising questions about whether this price represents optimal value for the government.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for aircraft parts?

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to Sierra Nevada Company, LLC, carry specific risks. The primary risk is that the contractor may have less incentive to control costs compared to fixed-price contracts, as their allowable costs are reimbursed. While a fixed fee provides some incentive for efficiency, the government bears the risk of cost overruns if actual costs exceed estimates. For specialized aircraft parts, where technical complexity can be high and unforeseen issues may arise, diligent oversight by the contracting agency is crucial to ensure costs remain reasonable and the fixed fee is justified. Without strong government oversight, CPFF contracts can potentially lead to higher overall expenditures than anticipated.

What is Sierra Nevada Company, LLC's track record with the Department of Defense, particularly in aircraft parts manufacturing?

Sierra Nevada Company, LLC (now part of Sierra Nevada Corporation) has a significant history of working with the Department of Defense across various programs, including aviation and aerospace. While this specific contract focuses on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' the company is known for its broader capabilities in areas such as electronic warfare, aviation systems, and space technology. Their long-standing presence and numerous contracts with DoD agencies suggest a level of established performance and expertise. However, the track record for this specific type of component manufacturing under a sole-source award would require a deeper dive into past performance reviews and any documented issues related to quality, delivery, or cost control on similar contracts.

How does this contract fit into the broader spending patterns for aircraft parts within the Department of Defense?

This $97.2 million contract represents a segment of the Department of Defense's substantial annual spending on aircraft parts and maintenance. The DoD procures a vast array of components, from routine consumables to highly specialized systems, across its various branches (Air Force, Navy, Army). Contracts for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' are essential for maintaining the operational readiness and longevity of the diverse military aircraft fleet. While this specific award is notable for its sole-source nature, it is one of many thousands of contracts that collectively ensure the airworthiness and functionality of military aviation assets. Understanding its place requires looking at the total budget allocated for aircraft sustainment and modernization.

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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 444 SALOMON CIR, SPARKS, NV, 02

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Subchapter S Corporation, Woman Owned Business

Financial Breakdown

Contract Ceiling: $97,192,939

Exercised Options: $97,192,939

Current Obligation: $97,192,939

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862006G4026

IDV Type: IDC

Timeline