DHS awards $65.9M aircraft contract to Sierra Nevada Company, LLC for surveillance and reconnaissance

Contract Overview

Contract Amount: $65,897,208 ($65.9M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2018-08-10

End Date: 2020-03-27

Contract Duration: 595 days

Daily Burn Rate: $110.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MEA 6, 7, AND 8

Place of Performance

Location: HAGERSTOWN, WASHINGTON County, MARYLAND, 21742

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $65.9 million to SIERRA NEVADA COMPANY, LLC for work described as: MEA 6, 7, AND 8 Key points: 1. Contract value represents a significant investment in border security technology. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type aims to control costs and provide predictability. 4. Contract duration of 595 days indicates a medium-term operational requirement. 5. Focus on aircraft manufacturing highlights a critical component of surveillance capabilities. 6. The award is part of a broader effort to enhance border monitoring.

Value Assessment

Rating: good

The contract value of $65.9 million for aircraft manufacturing appears reasonable given the scope of surveillance and reconnaissance capabilities typically required by U.S. Customs and Border Protection. Benchmarking against similar large-scale aircraft acquisition or modification contracts within federal agencies would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, assuming the contractor can deliver within the agreed budget.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, which can lead to better pricing and innovation. The number of bidders is not specified, but the open competition suggests that multiple companies likely vied for this opportunity, potentially driving down costs for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price and value for essential border security assets.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection (CBP) and the Department of Homeland Security (DHS), gaining enhanced aerial surveillance capabilities. The contract delivers specialized aircraft, likely equipped for intelligence, surveillance, and reconnaissance (ISR) missions along U.S. borders. Geographic impact is focused on U.S. border regions requiring aerial monitoring. The contract supports jobs within the aerospace and defense manufacturing sector, specifically related to aircraft production and modification.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise during aircraft modification or manufacturing.
Dependence on a single contractor for critical aircraft capabilities could pose a risk if performance issues emerge.
Ensuring timely delivery and operational readiness of the aircraft within the specified timeframe is crucial.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust selection process that likely identified a capable contractor.
The award to a known entity like Sierra Nevada Company, LLC, suggests a degree of confidence in their technical expertise.

Sector Analysis

The aerospace and defense sector is a significant area of federal spending, with a substantial portion allocated to aircraft acquisition, modification, and maintenance. This contract fits within the broader defense and homeland security spending categories, focusing on specialized aircraft for surveillance. Comparable spending benchmarks would involve looking at other large aircraft procurement or upgrade contracts within DHS or the Department of Defense, which often run into tens or hundreds of millions of dollars.

Small Business Impact

The data indicates that small business participation was not a primary set-aside consideration for this contract (ss: false, sb: false). While Sierra Nevada Company, LLC is a large business, the contract does not explicitly mandate small business subcontracting goals. The impact on the small business ecosystem would depend on whether the prime contractor voluntarily engages small businesses for specialized components or services, which is not detailed in this award.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Homeland Security's contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified aircraft capabilities. Transparency is generally maintained through contract award databases like FPDS, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

DHS Aircraft Procurement
Border Security Technology
Surveillance and Reconnaissance Platforms
Aerospace Manufacturing Contracts
Homeland Security Aerial Assets

Risk Flags

Potential for schedule delays
Technical performance risk
Cost growth potential despite fixed price

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $65.9 million to SIERRA NEVADA COMPANY, LLC. MEA 6, 7, AND 8

Who is the contractor on this award?

The obligated recipient is SIERRA NEVADA COMPANY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $65.9 million.

What is the period of performance?

Start: 2018-08-10. End: 2020-03-27.

What is the specific type of aircraft being manufactured or modified under this contract, and what are its key capabilities?

The provided data indicates the contract is for 'Aircraft Manufacturing' (nd: Aircraft Manufacturing) and falls under Product Service Code (PSC) 3341, which relates to Aircraft and Engine Manufacturing. While the specific aircraft model is not detailed, the context of U.S. Customs and Border Protection (CBP) and the mention of 'surveillance and reconnaissance' strongly suggest these are specialized platforms designed for intelligence gathering, border patrol, and potentially interdiction missions. These capabilities often include advanced sensor suites (e.g., electro-optical/infrared cameras, radar), communication systems, and long-endurance flight profiles. The contract value of $65.9 million suggests a significant modification or production of several complex aircraft, rather than a simple off-the-shelf purchase.

How does the $65.9 million contract value compare to historical spending on similar aircraft for border surveillance?

Comparing the $65.9 million award to historical spending requires access to detailed historical contract data for CBP's aerial assets. However, large fixed-wing aircraft and sophisticated rotorcraft used for surveillance and interdiction can cost tens of millions of dollars each, especially when outfitted with advanced ISR technology. For instance, CBP has previously acquired platforms like the P-3 Orion or specialized helicopters. A $65.9 million award could represent the acquisition of one or two highly customized aircraft, or a significant upgrade package for an existing fleet. Without specific historical benchmarks for comparable platforms and configurations, it's challenging to definitively state if this represents high or low value, but it aligns with the typical cost range for such specialized government aviation assets.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks for this contract include potential technical challenges during manufacturing or modification, leading to delays or cost overruns, despite the firm fixed-price structure. Performance risk exists if the delivered aircraft do not meet the stringent operational requirements for surveillance and reconnaissance. Contractor viability is another consideration, though Sierra Nevada Company, LLC is a reputable firm. Mitigation strategies likely involve rigorous technical reviews, phased delivery schedules with performance checkpoints, and strong contract management by CBP. The firm fixed-price nature itself is a risk mitigation tool, placing the onus on the contractor to manage costs. Clear performance specifications and acceptance criteria are crucial for ensuring the aircraft meet mission needs.

What is the track record of Sierra Nevada Company, LLC in delivering similar aircraft or surveillance systems to government agencies?

Sierra Nevada Company, LLC (SNC), now part of Sierra Nevada Corporation, has a substantial track record in aerospace and defense, including significant work with government agencies like the U.S. Air Force, Navy, and NASA, as well as DHS. They are known for their expertise in modifying existing aircraft platforms for specialized roles, including intelligence, surveillance, and reconnaissance (ISR), electronic warfare, and command and control. SNC has been involved in programs such as the development of surveillance aircraft for various military branches and has experience integrating complex sensor and communication systems. Their history suggests a capability to handle complex aerospace manufacturing and modification projects, making them a plausible choice for this DHS contract.

How does the 'full and open competition' procurement method impact the potential for cost savings for taxpayers?

The 'full and open competition' method is designed to maximize taxpayer savings by encouraging a wide range of qualified contractors to submit bids. By allowing all responsible sources to compete, the government increases the likelihood of receiving multiple proposals, which drives down prices through competitive pressure. This process helps ensure that the selected contractor offers the best value, considering both price and technical merit. In contrast, sole-source or limited competition contracts often result in higher prices because the competitive landscape is restricted. Therefore, this procurement method is generally favorable for taxpayers seeking efficient use of public funds.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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: $65,897,208

Exercised Options: $65,897,208

Current Obligation: $65,897,208

Subaward Activity

Number of Subawards: 39

Total Subaward Amount: $32,321,819

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSBP1016D00011

IDV Type: IDC

Timeline