DoD awards $338M contract for 12 A-29 aircraft to Sierra Nevada Company, LLC

Contract Overview

Contract Amount: $337,893,360 ($337.9M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2018-11-28

End Date: 2024-08-30

Contract Duration: 2,102 days

Daily Burn Rate: $160.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE OF 12 A-29 AIRCRAFT FOR NIGERIA

Place of Performance

Location: BEAVERCREEK TOWNSHIP, GREENE County, OHIO, 45431

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $337.9 million to SIERRA NEVADA COMPANY, LLC for work described as: PURCHASE OF 12 A-29 AIRCRAFT FOR NIGERIA Key points: 1. Contract awarded for aircraft manufacturing, a critical component of air support capabilities. 2. The contract's fixed-price nature aims to control costs and provide predictability. 3. Sole-source award raises questions about potential price inflation and lack of competitive pressure. 4. Long duration suggests a complex integration and support requirement for the aircraft. 5. The award falls within the broader defense sector's spending on aviation assets. 6. No small business set-aside indicates a focus on large prime contractors for this acquisition.

Value Assessment

Rating: fair

The total contract value of $337.9 million for 12 A-29 aircraft appears substantial. Benchmarking against similar foreign military sales or direct commercial sales of the A-29 would be necessary for a precise value-for-money assessment. Given the sole-source nature, it's difficult to definitively assess if the pricing reflects competitive market rates. However, the firm fixed-price structure provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition means that price discovery through bidding was not utilized, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without competing offers, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Nigerian Air Force, which will receive enhanced air support capabilities. The contract delivers 12 A-29 Super Tucano aircraft, known for light attack and reconnaissance missions. Geographic impact is primarily focused on Nigeria, enhancing its internal security and counter-terrorism operations. Workforce implications may include training and support personnel for the aircraft's operation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration could indicate potential for scope creep or unforeseen cost increases.
Lack of transparency in the sole-source justification requires careful review.
Dependence on a single contractor for critical aircraft could pose supply chain risks.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Acquisition of advanced aircraft enhances partner nation's security capabilities.
Specific aircraft type (A-29) is well-suited for intended counter-insurgency roles.
Long-term support and training are likely included, ensuring operational readiness.

Sector Analysis

The defense aviation sector is characterized by high R&D costs, complex manufacturing processes, and significant government procurement. This contract for A-29 aircraft fits within the broader category of tactical aircraft procurement, often involving specialized capabilities for light attack and close air support. Spending in this area is driven by national security needs and international partnerships, with major defense contractors dominating the market.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor, Sierra Nevada Company, LLC, is expected to handle the majority of the work, potentially utilizing its own facilities or larger supply chain partners. The absence of small business involvement in the prime contract means direct opportunities for small businesses are limited unless they are lower-tier subcontractors.

Oversight & Accountability

Oversight for this Department of Defense contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified aircraft. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal DoD oversight and potentially the Government Accountability Office (GAO) if protests arise.

Related Government Programs

Foreign Military Sales Program
Tactical Aircraft Procurement
Air Force Weapon Systems
Special Operations Forces Support Aircraft

Risk Flags

Sole-source award
High contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $337.9 million to SIERRA NEVADA COMPANY, LLC. PURCHASE OF 12 A-29 AIRCRAFT FOR NIGERIA

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 $337.9 million.

What is the period of performance?

Start: 2018-11-28. End: 2024-08-30.

What is the track record of Sierra Nevada Company, LLC in delivering similar aircraft to foreign governments?

Sierra Nevada Company, LLC, often in partnership with Embraer, has a significant track record with the A-29 Super Tucano. They have successfully delivered these aircraft to numerous countries, including Afghanistan, Lebanon, and others, for similar light attack and counter-insurgency roles. Their experience includes not only aircraft delivery but also associated training, logistics, and support packages. This history suggests a capability to manage complex international procurements and provide operational readiness for the aircraft. The specific performance and reliability in diverse operational environments for these prior sales would be a key indicator of their overall capability and the value delivered.

How does the per-unit cost of these A-29 aircraft compare to other similar government procurements or commercial sales?

The total contract value of approximately $337.9 million for 12 A-29 aircraft equates to roughly $28.16 million per aircraft. Benchmarking this figure requires careful consideration of what is included in the price (e.g., training, support, weapons integration, specific modifications). Direct commercial sales prices can vary significantly based on volume and customer-specific requirements. Historically, A-29 pricing for government contracts has ranged, but this figure appears to be within a plausible, albeit high-end, range for a comprehensive package, especially considering it's a sole-source award. A more precise comparison would involve analyzing specific line items and comparing them to recent Foreign Military Sales (FMS) cases or similar sole-source awards for comparable platforms.

What are the primary risks associated with a sole-source award for such a significant defense procurement?

The primary risk of a sole-source award is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to innovate or optimize costs. Taxpayers may end up paying more than necessary. Another risk is the potential for the contractor to have less incentive to ensure timely delivery or high quality, as there are no competing offers to switch to. Furthermore, sole-source justifications can sometimes mask underlying issues with market research or a failure to properly structure requirements for competition. Dependence on a single supplier also creates supply chain vulnerabilities and limits flexibility if issues arise with the contractor's performance or financial stability.

How effective are A-29 Super Tucano aircraft in fulfilling the stated mission requirements for light attack and reconnaissance?

The A-29 Super Tucano is widely regarded as a highly effective platform for light attack, close air support (CAS), and intelligence, surveillance, and reconnaissance (ISR) missions, particularly in environments where advanced jet aircraft are not suitable or cost-effective. Its rugged design, multi-mission capability (including precision-guided munitions), and relatively low operating costs make it ideal for counter-insurgency operations and border patrol. Numerous international partners have successfully employed the A-29 in these roles, demonstrating its effectiveness against ground targets and its utility in gathering intelligence. Its performance is well-documented in various operational theaters, validating its suitability for the intended mission profile.

What has been the historical spending trend for tactical aircraft procurement within the Department of Defense over the last five years?

Spending on tactical aircraft procurement within the Department of Defense has been substantial and relatively consistent over the last five years, driven by modernization efforts and the need to maintain air superiority across various mission sets. While specific figures fluctuate annually based on program priorities and budget allocations, the overall trend reflects a sustained investment in platforms ranging from fighter jets to specialized attack and reconnaissance aircraft. This includes funding for new aircraft acquisition, upgrades to existing fleets, and associated research, development, testing, and evaluation (RDT&E). The procurement of aircraft like the A-29, even for foreign partners via FMS, is part of a broader strategic approach to equipping allied air forces, indirectly supporting U.S. security interests.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

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: 198 EGLIN PKWY NE, FORT WALTON BEACH, FL, 32548

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: $337,893,360

Exercised Options: $337,893,360

Current Obligation: $337,893,360

Subaward Activity

Number of Subawards: 185

Total Subaward Amount: $232,377,082

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline