Air Force awards $173.7M contract for Lebanon aircraft procurement to Sierra Nevada Company

Contract Overview

Contract Amount: $173,735,071 ($173.7M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2015-10-30

End Date: 2021-10-30

Contract Duration: 2,192 days

Daily Burn Rate: $79.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LEBANON 6 AIRCRAFT PROCUREMENT

Place of Performance

Location: SHALIMAR, OKALOOSA County, FLORIDA, 32579

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $173.7 million to SIERRA NEVADA COMPANY, LLC for work described as: LEBANON 6 AIRCRAFT PROCUREMENT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 2192 days suggests a long-term need for these aircraft. 3. The fixed-price contract type shifts cost risk to the contractor. 4. The procurement falls under the Aircraft Manufacturing NAICS code. 5. The contract was awarded in Florida, indicating a potential geographic concentration of activity.

Value Assessment

Rating: fair

Benchmarking the value of this specific aircraft procurement is challenging without detailed specifications and comparable market data. However, the $173.7 million award over approximately six years represents a significant investment. The firm fixed-price structure aims to control costs, but the lack of competition means there was no direct price comparison during the award process. Further analysis would require understanding the specific aircraft capabilities and comparing them to similar international procurements or commercial equivalents.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition among multiple bidders. This approach is typically used when only one vendor can provide the required goods or services, or for national security reasons. The absence of competition limits the government's ability to leverage market forces to achieve the lowest possible price and may indicate a lack of readily available alternatives.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the lack of competitive bidding. The government relied on negotiation rather than market-driven price discovery.

Public Impact

The primary beneficiaries are likely the Lebanese armed forces, receiving critical aviation assets. The contract delivers specialized aircraft, potentially for surveillance, transport, or other military support roles. The contract was awarded in Florida, suggesting potential economic impact and job creation in that state. The procurement supports the U.S. foreign military sales program, enhancing partner nation defense capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could obscure potential alternatives.
Long contract duration may lead to cost overruns if not managed effectively.
Specific aircraft capabilities and performance metrics are not detailed, making value assessment difficult.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Contract supports a foreign military sales objective, enhancing international security cooperation.
Award to a known entity (Sierra Nevada Company) suggests a level of established capability.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and foreign military sales. The market for specialized military aircraft is often characterized by high barriers to entry, long development cycles, and significant government involvement. Comparable spending benchmarks would involve analyzing other foreign military aircraft procurements or domestic defense aircraft contracts of similar scale and complexity.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Sierra Nevada Company is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The absence of set-asides means that opportunities for small businesses to participate in this specific procurement are likely limited unless they are part of the larger supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods within the agreed price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales Program
Aircraft Procurement
Defense Manufacturing
Aerospace Industry

Risk Flags

Sole-source award limits price competition.
Lack of detailed specifications hinders value assessment.
Potential for cost overruns due to long duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $173.7 million to SIERRA NEVADA COMPANY, LLC. LEBANON 6 AIRCRAFT PROCUREMENT

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 $173.7 million.

What is the period of performance?

Start: 2015-10-30. End: 2021-10-30.

What specific type of aircraft is being procured for Lebanon under this contract, and what are its intended roles?

The provided data does not specify the exact type of aircraft being procured for Lebanon. The contract falls under NAICS code 336411 (Aircraft Manufacturing) and is for 'LEBANON 6 AIRCRAFT PROCUREMENT.' Without further details, the specific models and their intended military roles (e.g., light attack, reconnaissance, transport) remain unknown. This information is crucial for assessing the technical suitability and operational value of the procurement.

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

The data indicates the contract was awarded as 'NOT COMPETED,' implying a sole-source justification. Common reasons for sole-source awards include unique capabilities, urgent national security needs, or situations where only one responsible source can fulfill the requirement. For this specific contract, the justification likely stems from the specialized nature of the aircraft or specific interoperability requirements with Lebanese forces, potentially making Sierra Nevada Company the only viable provider at the time of award. A formal justification document would typically detail these reasons.

How does the $173.7 million contract value compare to similar foreign military aircraft procurements by the U.S. Department of Defense?

Comparing the $173.7 million value requires identifying similar procurements based on aircraft type, quantity, and recipient nation. Without knowing the specific aircraft, a direct comparison is difficult. However, for context, other foreign military aircraft sales can range from tens of millions for smaller platforms to hundreds of millions or even billions for advanced fighter jets or large transport aircraft. This contract appears to be in the mid-to-high range for a specific set of aircraft, suggesting a significant capability transfer.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

The primary risks of a sole-source contract of this magnitude ($173.7M) and duration (approx. 6 years) include potential overpricing due to lack of competition, reduced incentive for the contractor to innovate or offer cost efficiencies, and a higher risk of scope creep or schedule delays without competitive pressure. Taxpayers bear the risk of not achieving the best value. Furthermore, reliance on a single source can create dependency and limit future flexibility if alternative solutions emerge.

What is Sierra Nevada Company's track record with Department of Defense contracts, particularly in aircraft manufacturing and foreign military sales?

Sierra Nevada Company (SNC) has a significant track record with the Department of Defense, often involved in complex aerospace and defense projects. They are known for capabilities in areas such as electronic warfare, intelligence, surveillance, reconnaissance (ISR), and aircraft modification/integration. While specific details on their foreign military sales performance for aircraft aren't provided here, their general experience suggests they are a capable contractor for such requirements. A deeper dive into their contract history would reveal specific past performance metrics.

What is the historical spending pattern for aircraft procurement under the U.S. Department of the Air Force, and how does this contract fit within that trend?

The Department of the Air Force consistently spends billions annually on aircraft procurement, encompassing a wide range of platforms from fighters and bombers to trainers and specialized support aircraft. This $173.7 million contract represents a specific, albeit substantial, allocation within that broader spending. Its significance lies in its purpose as a foreign military sale, aligning with broader U.S. foreign policy objectives to support allied nations' defense capabilities, rather than solely fulfilling domestic Air Force operational needs.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Nevada Corporation

Address: 124 MIRACLE STRIP PKWY STE 503, MARY ESTHER, FL, 32569

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

Financial Breakdown

Contract Ceiling: $175,324,595

Exercised Options: $175,324,595

Current Obligation: $173,735,071

Subaward Activity

Number of Subawards: 107

Total Subaward Amount: $42,167,088

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline