DHS awards $66M for two multirole enforcement aircraft, with Sierra Nevada Company as prime

Contract Overview

Contract Amount: $65,982,137 ($66.0M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2016-09-15

End Date: 2018-11-28

Contract Duration: 804 days

Daily Burn Rate: $82.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MULTIROLE ENFORCEMENT AIRCRAFT #1 AND #2

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Homeland Security obligated $66.0 million to SIERRA NEVADA COMPANY, LLC for work described as: MULTIROLE ENFORCEMENT AIRCRAFT #1 AND #2 Key points: 1. The contract value of $66 million for two aircraft represents a significant investment in border security capabilities. 2. Sierra Nevada Company, LLC, secured this contract through full and open competition, indicating a competitive bidding process. 3. The firm fixed-price contract type suggests that cost risks are largely borne by the contractor. 4. The aircraft manufacturing sector is critical for specialized government needs, and this award highlights its role. 5. The duration of the contract (804 days) indicates a substantial period for delivery and potential integration. 6. The use of a delivery order under a larger contract structure implies a phased approach to acquisition.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific aircraft model details and comparable sales. However, the $66 million award for two specialized enforcement aircraft suggests a significant per-unit cost, reflecting advanced technology and customization. The firm fixed-price structure generally promotes cost control, but the overall value is contingent on the performance and capabilities delivered by the aircraft.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the designation implies a robust competition that should theoretically lead to a fair market price.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it is expected to drive down costs through market forces and ensure the government receives the best value for its investment.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection (CBP) and the Department of Homeland Security (DHS), enhancing their border surveillance and enforcement operations. The services delivered include the provision of two advanced multirole enforcement aircraft, equipped for various operational missions. The geographic impact is focused on U.S. borders, improving the ability to monitor and respond to threats. The contract supports jobs within the aerospace and defense manufacturing sector, specifically at Sierra Nevada Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics or operational success indicators for the aircraft post-delivery.
Potential for cost overruns if unforeseen technical challenges arise, despite the firm fixed-price structure.
Dependence on a single contractor for the delivery of these specialized assets could pose supply chain risks.
The long-term operational and maintenance costs of these advanced aircraft are not detailed in this award.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract type shifts cost risk to the contractor, promoting budget predictability.
Sierra Nevada Company has a track record in aerospace and defense, implying technical capability.
The acquisition of specialized enforcement aircraft directly addresses critical national security needs.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high technological complexity and significant government procurement. This contract falls within the aircraft manufacturing sub-sector, which is vital for national security and border control. The market for specialized military and surveillance aircraft is dominated by a few large prime contractors and their extensive supply chains. Benchmarking this specific award is difficult without knowing the exact aircraft configuration, but similar multirole surveillance aircraft can range from tens to hundreds of millions of dollars depending on capabilities.

Small Business Impact

This contract does not indicate any specific small business set-aside provisions. As a large prime contract awarded to Sierra Nevada Company, LLC, the primary impact on small businesses would likely be through subcontracting opportunities. It is crucial for the prime contractor to adhere to subcontracting goals to ensure small businesses can participate in the aerospace supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting and program management offices. The U.S. Customs and Border Protection (CBP) would also play a key role in monitoring performance and delivery. Transparency is facilitated by public contract databases, but detailed operational oversight and accountability measures are internal to the agency. The Inspector General's office for DHS may conduct audits or investigations into the contract's execution if warranted.

Related Government Programs

DHS Aircraft Procurement
CBP Surveillance Programs
Aerospace Manufacturing Contracts
Homeland Security Technology Acquisition

Risk Flags

Potential for cost overruns
Schedule delay risk
Performance specification adherence
Long-term sustainment costs
Technology obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $66.0 million to SIERRA NEVADA COMPANY, LLC. MULTIROLE ENFORCEMENT AIRCRAFT #1 AND #2

Who is the contractor on this award?

The obligated recipient is SIERRA NEVADA COMPANY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $66.0 million.

What is the period of performance?

Start: 2016-09-15. End: 2018-11-28.

What is Sierra Nevada Company's track record with similar government aircraft contracts?

Sierra Nevada Corporation (SNC) has a substantial history of delivering complex aerospace and defense solutions to various government agencies, including the Department of Defense and DHS. They have been involved in aircraft modification, sensor integration, and platform development for surveillance, reconnaissance, and electronic warfare missions. For example, SNC has been a key player in programs involving intelligence, surveillance, and reconnaissance (ISR) aircraft, often integrating advanced mission systems onto existing airframes. Their experience includes developing and fielding specialized aircraft for border patrol and national security operations, suggesting a strong capability to meet the requirements of this multirole enforcement aircraft contract. However, specific details on past performance for identical aircraft types or contract values would require deeper analysis of their contract history.

How does the $66 million cost compare to similar multirole enforcement aircraft acquisitions?

Directly comparing the $66 million cost for two multirole enforcement aircraft is challenging without knowing the specific aircraft model, its baseline configuration, and the advanced systems integrated. However, specialized aircraft for surveillance and enforcement, particularly those incorporating advanced sensors, communication suites, and robust airframes, are inherently expensive. For context, similar government contracts for modified turboprop or jet aircraft equipped for ISR or border patrol missions have seen costs ranging from $20 million to over $100 million per aircraft, depending on the complexity and capabilities. The $33 million per aircraft implied by this award falls within a plausible range for highly customized, mission-specific platforms, especially considering the costs associated with R&D, integration, and testing. A more precise benchmark would require comparing against aircraft with identical or very similar mission profiles and technological specifications.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract revolve around performance, schedule, and long-term sustainment. Although it's a firm fixed-price contract, there's a risk that the delivered aircraft may not fully meet the demanding operational requirements or performance specifications for multirole enforcement missions. Schedule delays in manufacturing or integration could impact the U.S. Customs and Border Protection's operational readiness. Furthermore, the long-term operational and maintenance costs (O&M) could exceed initial projections, especially for highly specialized and technologically advanced platforms. Dependence on a single contractor for these unique assets also poses a risk if the contractor faces financial difficulties or supply chain disruptions. Finally, ensuring the technology remains relevant and supportable over the aircraft's lifecycle presents an ongoing challenge.

How effective are multirole enforcement aircraft in enhancing border security operations?

Multirole enforcement aircraft are highly effective tools for enhancing border security operations by providing persistent surveillance, rapid response, and versatile mission capabilities. Their ability to cover vast areas quickly allows agencies like CBP to monitor borders, detect illegal crossings (both human and drug smuggling), and track targets in real-time. The 'multirole' aspect means these aircraft can be equipped with various payloads, such as electro-optical/infrared (EO/IR) sensors, radar, communication intelligence (COMINT) systems, and even light armament, enabling them to perform diverse tasks from reconnaissance to interdiction support. This versatility allows for more efficient use of resources compared to single-mission platforms. The data collected by these aircraft provides critical intelligence for ground and maritime interdiction efforts, significantly improving situational awareness and operational effectiveness along national borders.

What are the historical spending patterns for similar aircraft acquisitions by DHS or CBP?

DHS and CBP have a history of significant investment in aviation assets to support border security and law enforcement missions. Historical spending patterns show a consistent need for surveillance and enforcement aircraft, ranging from helicopters to fixed-wing planes. Major acquisitions often involve multi-year contracts for the procurement, modification, and sustainment of these platforms. For instance, CBP has previously acquired and operated aircraft like the P-3 Orion for maritime patrol and surveillance, and various types of helicopters and smaller fixed-wing aircraft for border patrol. Spending in this category typically fluctuates based on technological advancements, identified capability gaps, and budget allocations. The trend indicates a sustained commitment to leveraging advanced aviation technology to address evolving border security challenges, with contract values often in the tens to hundreds of millions of dollars for complex platforms.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $65,982,137

Exercised Options: $65,982,137

Current Obligation: $65,982,137

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $2,987,126

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSBP1016D00011

IDV Type: IDC

Timeline