Air Force awards $35.7M delivery order to Sierra Nevada Company for Afghanistan aircraft pricing

Contract Overview

Contract Amount: $35,699,205 ($35.7M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2019-09-27

End Date: 2020-03-31

Contract Duration: 186 days

Daily Burn Rate: $191.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: LAS A-29 AFGHANISTAN ADDITIONAL PRICING

Place of Performance

Location: SHALIMAR, OKALOOSA County, FLORIDA, 32579

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $35.7 million to SIERRA NEVADA COMPANY, LLC for work described as: LAS A-29 AFGHANISTAN ADDITIONAL PRICING Key points: 1. Contract awarded as a delivery order under an existing contract, suggesting a continuation of services or supplies. 2. The fixed-price incentive contract type aims to balance cost control with performance incentives for the contractor. 3. The contract was not competed, raising questions about potential cost efficiencies and market-driven pricing. 4. The duration of 186 days indicates a relatively short-term requirement for these specific aircraft-related services. 5. The North American Industry Classification System (NAICS) code 336411 points to aircraft manufacturing, a specialized sector. 6. Awarded by the Department of the Air Force, indicating a focus on aviation and defense capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this $35.7 million delivery order is challenging without direct comparisons to similar, non-competed awards for Afghanistan-related aircraft pricing. The fixed-price incentive structure suggests an attempt to manage costs while encouraging performance, but the lack of competition limits the ability to assess if the pricing is truly market-driven or represents a good value for taxpayers. Further analysis would require understanding the specific services rendered and the contractor's historical performance on similar tasks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a delivery order under an existing contract and was not competed. The specific reasons for not competing this award are not detailed, but it implies that the requirement may have been fulfilled through a pre-existing agreement or that circumstances did not allow for a full and open competition. The lack of competition means there were no multiple bidders to drive down prices through a bidding process.

Taxpayer Impact: When a contract is not competed, taxpayers may not benefit from the most competitive pricing that could be achieved through a bidding process, potentially leading to higher costs.

Public Impact

The primary beneficiaries are likely the Department of the Air Force and potentially personnel operating in Afghanistan who rely on the services or supplies related to aircraft pricing. The services delivered are specific to aircraft manufacturing and pricing, crucial for maintaining and managing aviation assets. The geographic impact is focused on operations related to Afghanistan, suggesting a role in supporting military or logistical efforts in that region. Workforce implications could involve specialized personnel within Sierra Nevada Company, LLC, and potentially within the Air Force's contracting and logistics divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Fixed-price incentive contracts can sometimes lead to cost overruns if not carefully managed.
The specific nature of 'Afghanistan Additional Pricing' suggests a potentially volatile or complex operational environment.

Positive Signals

Awarded to a known entity, Sierra Nevada Company, LLC, suggesting a degree of familiarity and potentially established performance.
The use of a fixed-price incentive contract type indicates an effort to align contractor incentives with government objectives.
Delivery order structure implies it's part of a larger, potentially pre-vetted, contracting vehicle.

Sector Analysis

The aircraft manufacturing sector (NAICS 336411) is a highly specialized and capital-intensive industry. This contract falls within the broader defense industrial base, where companies like Sierra Nevada Company, LLC, provide critical components, systems, and services to government agencies. Spending in this sector is often driven by national security requirements and technological advancements. Comparable spending benchmarks would typically involve analyzing other large-scale aircraft production or modification contracts within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting no specific small business subcontracting goals were mandated for this particular award. This means the primary contractor, Sierra Nevada Company, LLC, is likely responsible for fulfilling the entire scope of work, with no explicit requirement to engage small businesses as subcontractors on this specific delivery order.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a delivery order under an existing contract, its execution would be monitored against the terms and conditions of the parent contract. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Afghanistan Security Forces Fund
Air Force Materiel Command
Combat Air Forces
Aircraft Procurement, Air Force

Risk Flags

Lack of Competition
Potential for Cost Overruns
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.7 million to SIERRA NEVADA COMPANY, LLC. LAS A-29 AFGHANISTAN ADDITIONAL PRICING

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 $35.7 million.

What is the period of performance?

Start: 2019-09-27. End: 2020-03-31.

What is the specific nature of the 'Afghanistan Additional Pricing' and why was it necessary?

The data provided does not specify the exact nature of 'Afghanistan Additional Pricing.' However, it is highly probable that this refers to pricing adjustments or additional costs associated with services, modifications, or supplies for aircraft operating in or supporting operations within Afghanistan. Such 'additional pricing' could stem from factors like increased operational tempo, unique logistical challenges, security requirements, or specific modifications needed for the Afghan environment. Without further documentation or context from the awarding agency, the precise details remain unclear, but it suggests a need to account for the complexities and costs inherent in supporting aviation assets in a challenging theater of operations.

What is Sierra Nevada Company, LLC's track record with the Department of Defense, particularly on similar aircraft-related contracts?

Sierra Nevada Company, LLC (SNC) has a significant track record with the Department of Defense, often involved in complex aerospace and defense systems. They are known for providing a range of services and products, including aircraft modifications, sensor systems, and electronic warfare capabilities. While this specific $35.7 million delivery order for 'Afghanistan Additional Pricing' is a single data point, SNC has historically secured numerous contracts with various branches of the U.S. military. Their performance on these contracts would typically be assessed through contract performance reports and past performance evaluations. A comprehensive review would involve examining their history on fixed-price incentive contracts and their experience in supporting operations in regions like Afghanistan, looking for patterns in delivery, cost control, and technical execution.

How does the $35.7 million award compare to other aircraft manufacturing contracts awarded by the Air Force in recent years?

The $35.7 million value of this delivery order places it as a moderately sized award within the context of the Air Force's overall aircraft manufacturing and support spending. The Air Force frequently awards contracts in the hundreds of millions or even billions of dollars for major aircraft programs, research and development, and large-scale sustainment. However, for specific modifications, specialized services, or delivery orders under existing indefinite-delivery/indefinite-quantity (IDIQ) contracts, amounts in the tens of millions are common. To provide a precise comparison, one would need to analyze the Air Force's contract awards database for contracts with NAICS code 336411 or similar codes, filtering by contract type (e.g., fixed-price incentive) and award date, to identify comparable procurements and their values.

What are the potential risks associated with a sole-source award for aircraft pricing in a theater like Afghanistan?

Sole-source awards, like this $35.7 million delivery order, carry inherent risks, particularly in complex operational environments such as Afghanistan. The primary risk is the potential for inflated pricing, as the absence of competition removes the market pressure that typically drives down costs. This can lead to taxpayers bearing a higher financial burden than necessary. Another risk is reduced innovation; without competitive pressure, the contractor may have less incentive to develop more cost-effective solutions or improve efficiency. Furthermore, sole-source awards can sometimes mask underlying issues with program planning or requirements definition, suggesting that the need was not adequately anticipated or that only one source could meet a unique, perhaps poorly defined, requirement. Oversight and robust negotiation become critical to mitigate these risks.

What is the significance of the 'Fixed Price Incentive' (FPI) contract type in this context?

The 'Fixed Price Incentive' (FPI) contract type is designed to provide a middle ground between fixed-price and cost-reimbursement contracts, aiming to achieve cost savings while ensuring contractor motivation. In an FPI contract, the final price is adjusted based on the contractor's performance against a target cost and target profit. There is a price ceiling that the contractor cannot exceed, and a sharing arrangement for savings or overruns below or above the target cost. For this $35.7 million delivery order, the FPI structure suggests the Air Force wanted to incentivize Sierra Nevada Company, LLC, to control costs while delivering specific aircraft pricing services related to Afghanistan. The effectiveness of this structure depends heavily on the realism of the target cost and the fairness of the sharing ratio.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Nevada Corporation

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: $35,726,662

Exercised Options: $35,699,205

Current Obligation: $35,699,205

Subaward Activity

Number of Subawards: 33

Total Subaward Amount: $3,886,676

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA863718D6003

IDV Type: IDC

Timeline