DoD's $132.6M contract for aircraft parts awarded to Sierra Nevada Company, LLC, lacked competition

Contract Overview

Contract Amount: $132,633,255 ($132.6M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2015-10-30

End Date: 2016-10-31

Contract Duration: 367 days

Daily Burn Rate: $361.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF: ACAT III, BIG SAFARI, CLS

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $132.6 million to SIERRA NEVADA COMPANY, LLC for work described as: IGF::CT::IGF: ACAT III, BIG SAFARI, CLS Key points: 1. The contract's value of over $132 million represents a significant investment in aircraft parts. 2. The sole-source award indicates a potential lack of market competition for these specific parts. 3. The contract duration of approximately one year suggests a focused, short-term need. 4. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code points to a specialized industrial sector. 5. The absence of small business set-aside flags suggests this contract was not specifically targeted for small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of this $132.6 million contract is challenging without specific details on the aircraft parts procured and their intended use. However, the lack of competition raises concerns about whether the government achieved the best possible price. Without comparative bids or market analysis, it's difficult to definitively assess value for money. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs if not carefully managed, as it incentivizes the contractor to incur costs to achieve a fixed fee.

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 solicited. This approach bypasses the standard competitive bidding process, which typically involves soliciting offers from multiple potential suppliers. The lack of competition means there was no opportunity for other qualified companies to bid, potentially limiting price discovery and innovation.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This also limits the government's ability to explore a wider range of solutions and potentially more cost-effective options.

Public Impact

The primary beneficiaries are likely the Department of Defense and its operational units requiring specialized aircraft parts. The services delivered involve the manufacturing and supply of 'Other Aircraft Parts and Auxiliary Equipment'. The geographic impact is primarily within the United States, supporting defense logistics and readiness. Workforce implications may include specialized manufacturing jobs within Sierra Nevada Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for taxpayer funds.
Sole-source awards can stifle innovation by not engaging a broader market of potential suppliers.
The CPFF contract type requires robust oversight to prevent cost overruns.
Limited transparency due to the non-competitive nature of the award.

Positive Signals

Award to an established contractor, Sierra Nevada Company, LLC, suggests a degree of confidence in their capabilities.
The contract addresses a specific need within the Department of Defense's aviation sustainment.
The fixed fee component of the contract provides some cost certainty for the government.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high technological barriers to entry, stringent quality requirements, and significant government procurement. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category, a specialized niche within the broader aerospace industry. Spending in this sector is often driven by defense readiness, modernization programs, and sustainment of existing fleets. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar aircraft components.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was either awarded to a large business or that the nature of the requirement did not lend itself to a small business set-aside. Consequently, there are no direct subcontracting implications for small businesses stemming from a specific set-aside provision within this award. The impact on the small business ecosystem is neutral in terms of direct opportunities from this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. As a sole-source award, it may receive heightened scrutiny to ensure the justification for non-competition is valid and that the pricing is fair and reasonable. Accountability measures would involve performance monitoring and adherence to the contract terms. Transparency is limited due to the sole-source nature, but contract award data is generally publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Aerospace Parts Manufacturing Contracts
Sole-Source Defense Contracts
Air Force Logistics and Sustainment

Risk Flags

Lack of Competition
Sole-Source Award Justification
Potential for Cost Overruns (CPFF Type)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $132.6 million to SIERRA NEVADA COMPANY, LLC. IGF::CT::IGF: ACAT III, BIG SAFARI, 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 $132.6 million.

What is the period of performance?

Start: 2015-10-30. End: 2016-10-31.

What specific aircraft parts were procured under this contract, and what is their criticality to defense operations?

The provided data classifies the contract under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' However, it does not specify the exact parts. These could range from engine components, avionics, structural elements, or specialized systems critical for the operation and maintenance of various Department of Defense aircraft. The criticality would depend on the specific platform and the role of these parts in ensuring flight safety, mission capability, and overall fleet readiness. Without further details, it's impossible to ascertain the precise nature and importance of the procured items.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The justification for a sole-source award typically falls under specific exceptions to the full and open competition requirement, as outlined in the Federal Acquisition Regulation (FAR). Common reasons include the existence of only one responsible source, a national emergency, or when the agency is a sole provider of a unique item or service. For this contract, the specific justification is not provided in the data. However, potential reasons could include proprietary technology, unique manufacturing capabilities held by Sierra Nevada Company, LLC, or a critical and time-sensitive need where only this contractor could fulfill the requirement within the necessary timeframe. A thorough review of the contract file would be necessary to determine the official justification.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control and contractor incentives in this specific procurement?

The Cost Plus Fixed Fee (CPFF) contract type involves the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can be beneficial when the scope of work is not precisely defined or is subject to change, as it allows for flexibility. However, it places a greater burden on the government to meticulously monitor and audit the contractor's costs to ensure they are reasonable and allocable. Contractor incentives are primarily driven by the desire to complete the work efficiently to maximize the return on their incurred costs, as the fee is fixed regardless of the total cost. Without robust oversight, there's a risk of cost escalation, as the contractor is not directly penalized for higher costs beyond the fixed fee.

What is Sierra Nevada Company, LLC's track record with similar sole-source contracts or contracts within the Department of Defense?

Sierra Nevada Company, LLC (SNC) is a well-established defense contractor with a significant history of performing work for the Department of Defense across various programs. While this specific data point highlights a sole-source award, SNC has also been involved in competitively awarded contracts. Their track record generally includes expertise in areas such as aerospace systems, electronic warfare, and intelligence, surveillance, and reconnaissance (ISR). Assessing their performance on similar sole-source contracts would require a deeper dive into contract performance reports (e.g., CPARS) and historical award data. Generally, their extensive experience suggests a capability to deliver complex defense-related products and services, though the specifics of their performance on sole-source procurements would need targeted investigation.

Are there any comparable contracts for similar aircraft parts that could serve as a benchmark for value assessment?

Without knowing the specific aircraft parts procured under this $132.6 million contract, it is difficult to identify direct comparable contracts for benchmarking. However, general benchmarks for aircraft parts manufacturing can be derived from other contracts awarded by the Department of Defense or its branches for similar categories of equipment. Analyzing the unit costs, total contract values, and competition levels of other awards within NAICS code 336413, or for specific aircraft systems (e.g., engine components, avionics suites), could provide a comparative perspective. The fact that this contract was sole-source inherently limits the ability to benchmark against competitive pricing, suggesting that any comparison would likely be against other sole-source awards or internal cost estimates if available.

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, 89434

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

Financial Breakdown

Contract Ceiling: $132,633,255

Exercised Options: $132,633,255

Current Obligation: $132,633,255

Subaward Activity

Number of Subawards: 147

Total Subaward Amount: $22,125,799

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862011G4020

IDV Type: BOA

Timeline