Coast Guard awards $66.1M for new H-60 helicopter hulls, with Sikorsky Aircraft Corporation as the sole provider

Contract Overview

Contract Amount: $66,129,203 ($66.1M)

Contractor: Sikorsky Aircraft Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2021-07-06

End Date: 2027-01-14

Contract Duration: 2,018 days

Daily Burn Rate: $32.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: H-60 NEW HULLS - HULLS 26-27-28-29-30

Place of Performance

Location: ELIZABETH CITY, PASQUOTANK County, NORTH CAROLINA, 27909

State: North Carolina Government Spending

Plain-Language Summary

Department of Homeland Security obligated $66.1 million to SIKORSKY AIRCRAFT CORPORATION for work described as: H-60 NEW HULLS - HULLS 26-27-28-29-30 Key points: 1. This contract represents a significant investment in the Coast Guard's rotary-wing aircraft fleet modernization. 2. The sole-source nature of this award warrants scrutiny regarding price justification and potential for cost overruns. 3. Performance will be closely monitored given the critical nature of these assets for national security and maritime safety. 4. The contract spans over five years, indicating a long-term commitment to this specific aircraft platform. 5. This award falls within the broader context of ongoing defense and homeland security procurement trends.

Value Assessment

Rating: questionable

The total award of $66.1 million for five H-60 helicopter hulls (HULLS 26-27-28-29-30) appears substantial. Without comparable sole-source procurements or detailed cost breakdowns, it is difficult to definitively benchmark the value for money. The fixed-price nature of the contract provides some cost certainty, but the absence of competition raises concerns about whether the government achieved the most favorable pricing. Further analysis of the contractor's historical pricing for similar components and the justification for the sole-source award is needed to fully assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Sikorsky Aircraft Corporation, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for avoiding full and open competition. The lack of competition limits the government's ability to leverage market forces to drive down prices and potentially explore innovative solutions from a wider range of suppliers. The justification for this sole-source award would need to be thoroughly reviewed to understand why other potential manufacturers were not considered.

Taxpayer Impact: The absence of competition means taxpayers may not be benefiting from the most cost-effective pricing that could have been achieved through a competitive bidding process. This could lead to higher overall costs for the acquisition of these critical helicopter hulls.

Public Impact

The U.S. Coast Guard will benefit from the acquisition of new H-60 helicopter hulls, enhancing its operational capabilities. These hulls are essential components for maintaining and modernizing the Coast Guard's fleet of rotary-wing aircraft. The delivery of these hulls supports national security missions, including maritime law enforcement, search and rescue, and homeland defense. The contract's duration and value suggest a significant impact on the aerospace manufacturing sector, particularly for Sikorsky Aircraft Corporation and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could mask inefficiencies or inflated pricing.
Long contract duration may reduce flexibility to adapt to future technological advancements or market changes.
Dependence on a single supplier for critical components poses a supply chain risk.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Awarding to an established manufacturer like Sikorsky may ensure quality and reliability.
Modernization of the H-60 fleet is crucial for maintaining operational readiness.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, significant research and development costs, and a concentration of specialized expertise. This contract for H-60 helicopter hulls falls within the defense and homeland security sub-sector, which often involves complex, high-value procurements. The market for military and public safety aircraft is dominated by a few large prime contractors, with extensive supply chains. Comparable spending benchmarks would typically involve other large aircraft platform procurements or major component manufacturing contracts within the defense industrial base.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, as indicated by 'sb': false. While Sikorsky Aircraft Corporation is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors within Sikorsky's supply chain. The extent of small business subcontracting will depend on Sikorsky's internal policies and the specific requirements outlined in the contract's subcontracting plan, if any. Further investigation into subcontracting goals would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the U.S. Coast Guard contracting and program management offices. Given the sole-source nature, there may be heightened scrutiny from the Government Accountability Office (GAO) and the Department of Homeland Security's Office of Inspector General (OIG) regarding the justification for the award and the contractor's performance. Transparency will depend on the public availability of contract details and performance reports, which can be limited for sole-source procurements.

Related Government Programs

H-60 Helicopter Program
U.S. Coast Guard Aviation Procurement
Homeland Security Aircraft Acquisitions
Defense Contract Management

Risk Flags

Sole-source award requires strong justification.
Potential for cost overruns due to lack of competition.
Long-term contract may limit future flexibility.
Dependence on a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $66.1 million to SIKORSKY AIRCRAFT CORPORATION. H-60 NEW HULLS - HULLS 26-27-28-29-30

Who is the contractor on this award?

The obligated recipient is SIKORSKY AIRCRAFT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $66.1 million.

What is the period of performance?

Start: 2021-07-06. End: 2027-01-14.

What is the historical performance record of Sikorsky Aircraft Corporation with the U.S. Coast Guard and similar government agencies?

Sikorsky Aircraft Corporation has a long-standing relationship with the U.S. military and government agencies, including the U.S. Coast Guard, primarily as a manufacturer of rotary-wing aircraft. They are well-known for producing the UH-60 Black Hawk and its variants, which have been a staple in military aviation for decades. Their track record generally includes successful delivery of complex aircraft systems, though like any large defense contractor, they have faced scrutiny over contract performance, cost overruns, and schedule delays on various programs. For the H-60 platform specifically, Sikorsky has been the primary manufacturer, indicating a deep familiarity and established production capabilities. A detailed review of past contracts with the Coast Guard would reveal specific performance metrics, any disputes, and overall satisfaction levels.

How does the per-unit cost of these H-60 hulls compare to previous acquisitions or market benchmarks?

The total award of $66.1 million for five H-60 helicopter hulls (HULLS 26-27-28-29-30) equates to approximately $13.22 million per hull. Benchmarking this figure is challenging without access to specific historical data for similar H-60 hull procurements by the Coast Guard or other agencies, especially considering potential variations in specifications, materials, and market conditions over time. Given this is a sole-source award, direct comparison to competitive bids is not possible. However, if previous competitive procurements for similar components existed, a significant deviation from those prices, particularly an increase, would warrant further investigation into the justification for the current pricing. Publicly available data on comparable military helicopter component costs could offer a broader market perspective, but direct comparisons are often difficult due to proprietary information and unique contract terms.

What are the primary risks associated with this sole-source contract for the H-60 hulls?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, Sikorsky Aircraft Corporation may have less incentive to offer the most cost-effective solution, potentially leading to higher costs for the U.S. Coast Guard and taxpayers. Another significant risk is the potential for schedule delays or performance issues, as the government has fewer leverage points to ensure timely and high-quality delivery compared to a competitive environment. Furthermore, reliance on a single supplier for critical components can create supply chain vulnerabilities. If Sikorsky faces production challenges, it could directly impact the Coast Guard's ability to maintain and modernize its fleet, potentially affecting operational readiness. The government's ability to negotiate favorable terms is also diminished in a sole-source scenario.

What is the expected impact of this contract on the operational readiness of the U.S. Coast Guard's H-60 fleet?

This contract is expected to have a positive impact on the operational readiness of the U.S. Coast Guard's H-60 fleet by providing new, modern hulls. The H-60 platform is a critical asset for various Coast Guard missions, including search and rescue, maritime law enforcement, and homeland security operations. By acquiring new hulls, the Coast Guard can replace aging components, extend the service life of existing aircraft, and potentially integrate newer technologies. This investment directly supports the fleet's ability to perform its duties effectively and reliably. The delivery timeline, extending to January 2027, suggests a phased approach to integration, aiming to minimize disruption to ongoing operations while ensuring a steady supply of essential airframes for fleet sustainment and modernization efforts.

How does this contract align with historical spending patterns for aircraft manufacturing by the Department of Homeland Security?

This contract for $66.1 million for H-60 helicopter hulls aligns with the Department of Homeland Security's (DHS) historical spending patterns in aircraft manufacturing, particularly for its component agencies like the U.S. Coast Guard. DHS, and the Coast Guard specifically, have consistently invested in rotary-wing aircraft to fulfill their diverse operational mandates. Procurements for major aircraft components, airframes, and upgrades are typical expenditures. While the exact dollar amount may fluctuate based on specific program needs and budget allocations year-to-year, the nature of this award—acquiring critical airframes for a key platform—is consistent with past investments aimed at maintaining and enhancing aviation capabilities within the department. The sole-source aspect, however, might deviate from patterns where competitive bids are more common for standard procurements.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 70Z02320RAMH00400

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 6900 MAIN ST, STRATFORD, CT, 06614

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

Financial Breakdown

Contract Ceiling: $66,129,203

Exercised Options: $66,129,203

Current Obligation: $66,129,203

Subaward Activity

Number of Subawards: 512

Total Subaward Amount: $22,905,222

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 70Z02321DAMH00400

IDV Type: IDC

Timeline