DoD's $66.4M Task Order to Sierra Nevada Company for Aircraft Manufacturing Raises Questions on Competition

Contract Overview

Contract Amount: $66,417,990 ($66.4M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2021-03-31

End Date: 2021-03-31

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: A-29 AFGHANISTAN TASK ORDER 4

Place of Performance

Location: SHALIMAR, OKALOOSA County, FLORIDA, 32579

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $66.4 million to SIERRA NEVADA COMPANY, LLC for work described as: A-29 AFGHANISTAN TASK ORDER 4 Key points: 1. Significant spending on aircraft manufacturing for Afghanistan operations. 2. Sole-source award to Sierra Nevada Company, limiting competitive pricing. 3. Potential for inflated costs due to lack of competition. 4. Focus on a specific sector (Aircraft Manufacturing) within defense spending.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not managed closely. Without competitive benchmarks, it's difficult to assess if $66.4M is a fair price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This was a sole-source award, meaning there was no competition. This significantly limits price discovery and could result in higher costs for taxpayers compared to a fully competed contract.

Taxpayer Impact: The lack of competition for this substantial task order likely resulted in a higher cost to taxpayers than if multiple vendors had been allowed to bid.

Public Impact

Taxpayer funds allocated for a specific operational need in Afghanistan. Potential impact on the defense industrial base through contract awards. Lack of transparency in pricing due to sole-source nature.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of competition

Positive Signals

Supports specific operational requirements

Sector Analysis

This contract falls under Aircraft Manufacturing, a critical sector within the defense industry. Spending benchmarks for similar sole-source aircraft manufacturing contracts are often difficult to ascertain, but competitive bids typically yield better value.

Small Business Impact

The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small businesses were considered or had the opportunity to participate in subcontracting.

Oversight & Accountability

Oversight is crucial for sole-source, cost-plus contracts to ensure funds are used efficiently and effectively. The Department of the Air Force is responsible for ensuring proper execution and accountability.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited transparency in pricing
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.4 million to SIERRA NEVADA COMPANY, LLC. A-29 AFGHANISTAN TASK ORDER 4

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 $66.4 million.

What is the period of performance?

Start: 2021-03-31. End: 2021-03-31.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves specific circumstances such as urgent and compelling needs, unique capabilities of a single contractor, or national security imperatives. Without detailed documentation from the Department of the Air Force, the precise rationale remains unclear, but it directly impacts the potential for cost savings through competition.

How does the cost-plus fixed fee structure impact the overall value and risk for this aircraft manufacturing task order?

A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it incentivizes the contractor to control costs to maximize their fee, it shifts much of the cost risk to the government. This structure can lead to higher final costs compared to fixed-price contracts, especially if the initial cost estimates are inaccurate or scope creep occurs.

What is the long-term strategic impact of awarding significant contracts like this without competition on the broader aircraft manufacturing sector?

Consistently awarding contracts on a sole-source basis can stifle innovation and competition within the aircraft manufacturing sector. It may lead to a concentration of government business with a few select companies, potentially hindering the growth and development of other capable firms. This can reduce the government's options and bargaining power in the future.

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

Pricing Type: COST PLUS FIXED FEE (U)

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: $70,508,047

Exercised Options: $70,508,047

Current Obligation: $66,417,990

Subaward Activity

Number of Subawards: 106

Total Subaward Amount: $9,336,960

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