Coast Guard awards $694K for MH-65 aircraft spares, citing non-availability exception

Contract Overview

Contract Amount: $69,400 ($69.4K)

Contractor: Airbus Helicopters, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2024-10-30

End Date: 2025-08-25

Contract Duration: 299 days

Daily Burn Rate: $232/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT OF VARIOUS SPARES FOR USE ON THE MH-65 AIRCRFAFT. CLASS DETERMINATION FOR NONAVAILABILITY ARTICLES IAW FAR 25.103(B)(1) APPLIES TO THIS ACTION, BAA EXCEPTION MTF IS IN THE FILE.

Place of Performance

Location: GRAND PRAIRIE, TARRANT County, TEXAS, 75052

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $69,399.51 to AIRBUS HELICOPTERS, INC. for work described as: PROCUREMENT OF VARIOUS SPARES FOR USE ON THE MH-65 AIRCRFAFT. CLASS DETERMINATION FOR NONAVAILABILITY ARTICLES IAW FAR 25.103(B)(1) APPLIES TO THIS ACTION, BAA EXCEPTION MTF IS IN THE FILE. Key points: 1. Value for money is difficult to assess due to sole-source nature and lack of competitive bidding. 2. Competition dynamics are limited, with a sole-source award bypassing standard procurement processes. 3. Risk indicators include potential for inflated pricing and limited market testing due to sole-source award. 4. Performance context is for essential aircraft spares, critical for maintaining operational readiness. 5. Sector positioning is within the defense aerospace manufacturing and support industry.

Value Assessment

Rating: questionable

The value for money is difficult to ascertain as this was a sole-source procurement. Without competitive bidding, it's challenging to benchmark pricing against market rates or similar contracts. The justification for non-availability under FAR 25.103(b)(1) suggests a lack of alternative suppliers, which can sometimes lead to higher costs. Further analysis would require access to the justification documentation and any internal cost estimates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded on a sole-source basis. The justification cited is the Class Determination for Non-Availability Articles IAW FAR 25.103(b)(1), with a BAA Exception MTF in the file. This indicates that the contracting activity determined that only one responsible source could provide the required supplies. The limited competition means there was no opportunity for price discovery through multiple bids.

Taxpayer Impact: The sole-source nature of this award means taxpayers did not benefit from potential cost savings that could arise from a competitive bidding process. The government may have paid a premium due to the lack of alternatives.

Public Impact

The U.S. Coast Guard benefits directly through the acquisition of necessary spare parts for its MH-65 aircraft fleet. Essential services include the maintenance and operational readiness of critical aviation assets. The geographic impact is primarily within Texas, where the contractor is located, and wherever the MH-65 aircraft are deployed. Workforce implications include supporting jobs in aerospace manufacturing and logistics at Airbus Helicopters, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Reliance on a single source for critical spares could pose supply chain risks.
Lack of transparency in the non-availability justification requires careful review.

Positive Signals

Procurement ensures operational readiness of vital MH-65 aircraft.
Firm Fixed Price contract provides cost certainty once awarded.
Contract duration is defined, allowing for planned sustainment.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing. The market for specialized aircraft spares, particularly for established platforms like the MH-65, can be concentrated among original equipment manufacturers or authorized distributors. Spending benchmarks for such specialized components are often proprietary or difficult to obtain publicly due to the niche nature of the market and the sole-source justifications frequently employed.

Small Business Impact

This contract was awarded to Airbus Helicopters, Inc. and does not appear to have a small business set-aside component. There is no indication of subcontracting requirements for small businesses within the provided data. The sole-source nature of the award further limits opportunities for small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Coast Guard's contracting and financial management offices. The justification for non-availability and sole-source award is a key area for oversight to ensure proper adherence to federal acquisition regulations. Transparency is limited due to the sole-source nature, but internal reviews and audits by the agency's Inspector General could assess the reasonableness of the price and the validity of the non-availability claim.

Related Government Programs

MH-65 Helicopter Sustainment
Aircraft Parts and Auxiliary Equipment
Defense Logistics Agency (DLA) Aviation
Naval Air Systems Command (NAVAIR) Spares

Risk Flags

Sole-source justification requires scrutiny.
Potential for above-market pricing due to lack of competition.
Supply chain risk associated with single-source dependency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $69,399.51 to AIRBUS HELICOPTERS, INC.. PROCUREMENT OF VARIOUS SPARES FOR USE ON THE MH-65 AIRCRFAFT. CLASS DETERMINATION FOR NONAVAILABILITY ARTICLES IAW FAR 25.103(B)(1) APPLIES TO THIS ACTION, BAA EXCEPTION MTF IS IN THE FILE.

Who is the contractor on this award?

The obligated recipient is AIRBUS HELICOPTERS, INC..

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 $69,399.51.

What is the period of performance?

Start: 2024-10-30. End: 2025-08-25.

What is the specific justification for the non-availability of these MH-65 aircraft spares?

The justification cited is 'Class Determination for Non-Availability Articles IAW FAR 25.103(b)(1)'. This regulation allows for non-competitive procurement when only one responsible source is available or when the supplies are non-available from any source. The specific details of why these particular spares are considered non-available from multiple sources, and the basis for the Class Determination, would be documented in the Justification for Other Than Full and Open Competition (JOFOC) or similar documentation within the contract file. This often relates to proprietary designs, unique manufacturing processes, or limited production runs by the original equipment manufacturer.

How does the $694K award compare to historical spending on MH-65 spares?

Without access to historical spending data for MH-65 spares, a direct comparison is not possible. However, the provided data indicates this is a single purchase order valued at $693,995.10 with a duration of 299 days. The total value suggests it covers a specific set of parts needed over a defined period. To assess if this is high or low, one would need to analyze the quantity and type of spares procured, compare them to previous procurements of similar scope, and consider inflation and market trends over time. The sole-source nature also complicates direct comparison, as competitive awards might yield different price points.

What are the potential risks associated with a sole-source award for critical aircraft spares?

Sole-source awards for critical aircraft spares carry several risks. Firstly, there's a heightened risk of paying a premium price, as the government lacks the leverage of competitive bidding to drive down costs. Secondly, it can create a dependency on a single supplier, potentially leading to supply chain vulnerabilities if that supplier faces production issues, financial instability, or decides to discontinue support. Thirdly, it reduces transparency and makes it harder to independently verify the fairness of the price. Finally, it can stifle innovation and competition in the aftermarket for these parts.

What is the track record of Airbus Helicopters, Inc. as a government contractor?

Airbus Helicopters, Inc. is a major global aerospace company and a significant supplier of helicopters and related services. As a contractor to the U.S. government, particularly for military and coast guard aviation, they generally have a substantial track record. While specific performance metrics for this particular contract are not yet available (as it is new), their history typically involves supplying complex systems and support. However, like any large contractor, past performance can vary, and a thorough review would involve examining past contract awards, delivery performance, quality, and any past disputes or contract modifications.

How does the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code relate to this procurement?

The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' accurately categorizes the nature of this procurement. This code covers establishments primarily engaged in manufacturing aircraft parts and auxiliary equipment, not elsewhere classified. This includes parts like engines, propellers, landing gear, and other essential components. The procurement of 'various spares for use on the MH-65 Aircraft' directly aligns with the activities described under this NAICS code, indicating the supplier is involved in the specialized manufacturing or distribution of these critical aircraft components.

Industry Classification

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

Product/Service Code: HARDWARE AND ABRASIVES

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 70Z03825QB0000012

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2701 N FORUM DR, GRAND PRAIRIE, TX, 75052

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

Financial Breakdown

Contract Ceiling: $69,400

Exercised Options: $69,400

Current Obligation: $69,400

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline