DoD's $118.6M Boeing Sikorsky contract for aircraft support awarded without competition

Contract Overview

Contract Amount: $118,657,454 ($118.7M)

Contractor: Boeing Sikorsky Aircraft Support, LLC

Awarding Agency: Department of Defense

Start Date: 2021-01-01

End Date: 2021-12-31

Contract Duration: 364 days

Daily Burn Rate: $326.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TRAVEL

Place of Performance

Location: FORT CAMPBELL, CHRISTIAN County, KENTUCKY, 42223

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $118.7 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC for work described as: TRAVEL Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Significant spending on 'Other Support Activities for Air Transportation' warrants scrutiny for efficiency. 3. The firm fixed-price structure aims to control costs, but without competition, true value is hard to gauge. 4. A single delivery order under a larger contract suggests a specific, ongoing need. 5. The contract duration of one year indicates a short-term or recurring requirement. 6. Geographic focus on Kentucky for this significant expenditure. 7. No small business set-aside or subcontracting noted, potentially limiting broader economic participation.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bidding. The $118.6 million expenditure for aircraft support services, specifically 'Other Support Activities for Air Transportation,' represents a substantial investment. Without comparable contract data or multiple bids, it's difficult to ascertain if the pricing is optimal or if taxpayers received the best possible value. The firm fixed-price contract type suggests cost certainty, but the absence of competition means there's no market-driven pressure to ensure the most economical solution.

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 vendor can provide the required goods or services, or in urgent situations. The lack of competition means that potential cost savings that could arise from a bidding process were not realized. It also limits the opportunity for other qualified businesses to secure government contracts and potentially offer innovative or more cost-effective solutions.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. It also reduces transparency and opportunities for a wider range of businesses to participate in government contracting.

Public Impact

U.S. Special Operations Command benefits from specialized aircraft support services. Ensures the operational readiness of critical air transportation assets. Services are primarily delivered within Kentucky. Supports a specialized segment of the aerospace and defense industry workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Limited transparency in pricing due to sole-source award.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established entity like Boeing Sikorsky suggests reliability.
Contract addresses a specific need within U.S. Special Operations Command.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government procurement. Contracts for aircraft support are crucial for maintaining military readiness and operational capabilities. This $118.6 million contract falls within the 'Other Support Activities for Air Transportation' category, which can encompass a wide range of services from maintenance and repair to specialized operational support. The market for such services is often dominated by a few large, specialized contractors due to the stringent requirements and high barriers to entry.

Small Business Impact

This contract does not appear to include any small business set-aside provisions, nor is there information indicating subcontracting opportunities for small businesses. The award to a large prime contractor like Boeing Sikorsky, without specific small business considerations, suggests that the direct economic benefits to the small business ecosystem may be limited for this particular award. Future contracts or modifications could potentially incorporate small business participation goals.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver services at an agreed-upon price. Transparency is somewhat limited due to the sole-source nature of the award. Inspector General investigations could be initiated if any performance issues or potential fraud are identified.

Related Government Programs

Department of Defense Aircraft Maintenance Contracts
Special Operations Forces Support Services
Air Transportation Support Services
Boeing Sikorsky Aircraft Services

Risk Flags

Sole-source award
Lack of competition
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $118.7 million to BOEING SIKORSKY AIRCRAFT SUPPORT, LLC. TRAVEL

Who is the contractor on this award?

The obligated recipient is BOEING SIKORSKY AIRCRAFT SUPPORT, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $118.7 million.

What is the period of performance?

Start: 2021-01-01. End: 2021-12-31.

What is the historical spending pattern for 'Other Support Activities for Air Transportation' by the U.S. Special Operations Command?

Analyzing historical spending for 'Other Support Activities for Air Transportation' by the U.S. Special Operations Command (USSOCOM) is crucial for understanding trends and identifying potential anomalies. Without specific historical data for this exact contract line item, we can infer general patterns. USSOCOM, like other defense entities, relies heavily on specialized support for its diverse fleet of aircraft, which are often unique and require tailored maintenance and operational services. Spending in this category can fluctuate based on operational tempo, fleet modernization programs, and the availability of organic support capabilities. A significant portion of this spending is often directed towards ensuring the readiness and deployability of aircraft used in high-risk environments. The $118.6 million awarded in this instance represents a substantial single-year investment, suggesting either a critical need or a consolidation of previously fragmented support requirements. Further analysis would require access to detailed historical contract awards and spending reports for USSOCOM within this specific Product Service Code (PSC) or its predecessors.

How does the cost of this contract compare to similar aircraft support contracts awarded competitively?

Directly comparing the cost of this $118.6 million contract to similar aircraft support contracts is difficult because this award was sole-source, meaning it was not subjected to competitive bidding. Competitive contracts allow for price discovery through multiple bids, providing a benchmark for what the market will bear. Sole-source awards, by their nature, lack this comparative pricing mechanism. To assess value, one would need to identify comparable contracts for similar aircraft types and support services that *were* competitively awarded, ideally around the same time period and by similar agencies. Factors such as the specific aircraft models supported, the scope of services (e.g., depot-level maintenance, component repair, operational support), contract duration, and geographic location would need to be closely matched. Without such comparable data, assessing whether the $118.6 million represents a fair market price is speculative. It is possible that the price is reasonable given the specialized nature of the support, but the lack of competition prevents definitive confirmation of optimal value for taxpayer dollars.

What are the specific risks associated with a sole-source award of this magnitude?

A sole-source award of $118.6 million carries several significant risks. Firstly, the primary risk is financial: without competition, the government may pay a higher price than necessary, as the contractor faces no pressure to offer the lowest possible cost. This lack of competitive tension can also lead to reduced incentives for innovation or efficiency improvements. Secondly, there's a risk of contractor complacency; the incumbent may feel less pressure to maintain high performance standards or responsiveness when they know they are the only option. Thirdly, a sole-source award can create a dependency on a single provider, making it difficult and costly to switch vendors in the future, even if performance issues arise. Finally, from a transparency and fairness perspective, sole-source awards can be perceived negatively, potentially leading to accusations of favoritism or a lack of due diligence in seeking the best value, especially when awarded without a clearly documented justification for the lack of competition.

What is Boeing Sikorsky Aircraft Support, LLC's track record with similar government contracts?

Boeing Sikorsky Aircraft Support, LLC, as a major defense contractor, likely has an extensive track record with the U.S. government, particularly within the Department of Defense and for Special Operations Command (SOCOM). Companies of this size and specialization typically handle numerous contracts for aircraft maintenance, repair, overhaul, and operational support across various platforms. Their history would likely include experience with firm fixed-price contracts and potentially sole-source awards, especially for highly specialized or proprietary systems where they are the original equipment manufacturer or sole authorized service provider. Assessing their specific track record for this type of 'Other Support Activities for Air Transportation' would involve reviewing past performance evaluations (e.g., CPARS reports), contract modifications, and any documented issues or successes on similar engagements. Given their established presence, it's probable they have demonstrated capability, but the specifics of their performance, cost control, and responsiveness on prior contracts would be key to a full assessment.

What are the potential performance implications of awarding this contract without competition?

The performance implications of awarding this $118.6 million contract without competition are mixed. On the positive side, awarding to an established entity like Boeing Sikorsky Aircraft Support, LLC, suggests a high likelihood of technical competence and familiarity with the specific aircraft and support requirements. This continuity can ensure smooth operations and minimize disruption, as the contractor already possesses the necessary knowledge, infrastructure, and personnel. However, the absence of competition can also introduce performance risks. Without the pressure of potential future competition or the need to impress multiple potential buyers, the contractor might have less incentive to proactively seek efficiencies, innovate service delivery, or maintain the highest levels of responsiveness. Performance issues, if they arise, might be harder to address decisively if switching to an alternative provider is not feasible or is prohibitively expensive. Therefore, while continuity is a benefit, ongoing rigorous performance monitoring and contract management by the agency become even more critical.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: H9224116R0004

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company

Address: 7244B NIGHTSTALKER WAY, FORT CAMPBELL, KY, 42223

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $118,657,454

Exercised Options: $118,657,454

Current Obligation: $118,657,454

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $688,598

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: H9224119D0003

IDV Type: IDC

Timeline