Coast Guard spends $15.6M on helicopter part kits, a sole-source award with limited competition

Contract Overview

Contract Amount: $15,622,749 ($15.6M)

Contractor: Airbus Helicopters, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2007-08-29

End Date: 2009-09-30

Contract Duration: 763 days

Daily Burn Rate: $20.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE GREEN AIRFRAME COMPLETION KITS USED ON CG HH65 AIRCRAFT

Place of Performance

Location: GRAND PRAIRIE, TARRANT County, TEXAS, 75052

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $15.6 million to AIRBUS HELICOPTERS, INC. for work described as: PURCHASE GREEN AIRFRAME COMPLETION KITS USED ON CG HH65 AIRCRAFT Key points: 1. Value for money is difficult to assess due to the sole-source nature of the award. 2. Competition dynamics were limited, with only one offer solicited. 3. Risk indicators include potential for overpricing and lack of competitive pressure. 4. Performance context is for completion kits on HH-65 aircraft, a critical asset for the Coast Guard. 5. Sector positioning is within aircraft parts manufacturing, a specialized niche.

Value Assessment

Rating: questionable

The contract value of $15.6 million for completion kits is substantial. Without competitive bidding, it's challenging to benchmark the pricing against market rates or similar contracts. The sole-source nature raises concerns about whether the government received the best possible price. Further analysis would require access to cost breakdowns and comparisons with other procurement actions for similar components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Airbus Helicopters, Inc., was solicited. The justification for this approach is not detailed in the provided data. Limited competition typically leads to higher prices and reduced innovation as there is no pressure from competing firms to offer better terms or lower costs.

Taxpayer Impact: Taxpayers may have paid a premium for these completion kits due to the absence of a competitive bidding process. This lack of competition limits the government's ability to negotiate favorable pricing.

Public Impact

The U.S. Coast Guard benefits directly through the acquisition of essential parts for its HH-65 aircraft fleet. These completion kits are crucial for maintaining the operational readiness and safety of the helicopters. The geographic impact is primarily within Texas, where the contractor is located. Workforce implications are likely concentrated within the aerospace manufacturing sector, supporting specialized jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may reduce incentives for contractor efficiency and innovation.
Contract duration of over two years without competitive re-evaluation could lead to price creep.

Positive Signals

Ensures availability of critical parts for a specific, potentially unique, aircraft model.
Direct award may expedite delivery of essential components for operational needs.
Contracting with the original equipment manufacturer can ensure part compatibility and quality.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized helicopter completion kits is often dominated by original equipment manufacturers due to proprietary designs and technical expertise. Comparable spending benchmarks are difficult to establish without more specific data on the kits' components and complexity, but overall spending on aircraft parts and auxiliary equipment by the government is significant.

Small Business Impact

The data indicates this contract was not competed and does not specify any small business set-aside or subcontracting goals. As a sole-source award to a large corporation, it is unlikely to have direct positive implications for the small business ecosystem. There is no indication of subcontracting opportunities for small businesses within this specific award.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve contract administration by the U.S. Coast Guard, ensuring delivery and quality standards are met. Accountability measures are tied to the firm fixed-price nature of the contract, obligating the contractor to deliver the specified kits. Transparency is limited due to the sole-source award, with details on the justification and pricing not readily available in this summary.

Related Government Programs

Aircraft Parts Procurement
Helicopter Maintenance and Repair
Department of Homeland Security Acquisitions
U.S. Coast Guard Aviation Support

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $15.6 million to AIRBUS HELICOPTERS, INC.. PURCHASE GREEN AIRFRAME COMPLETION KITS USED ON CG HH65 AIRCRAFT

Who is the contractor on this award?

The obligated recipient is AIRBUS HELICOPTERS, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $15.6 million.

What is the period of performance?

Start: 2007-08-29. End: 2009-09-30.

What is the specific justification for awarding this contract on a sole-source basis to Airbus Helicopters, Inc.?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of meeting the government's needs. This could be due to proprietary technology, unique capabilities, or urgent requirements where competition is not feasible. Without the official justification document, it is impossible to determine the precise reasons. Further investigation into the Federal Procurement Data System (FPDS) or agency records would be necessary to uncover the rationale behind this decision.

How does the $15.6 million contract value compare to historical spending on similar HH-65 aircraft completion kits?

Direct comparison to historical spending on similar HH-65 aircraft completion kits is challenging with the provided data alone. The $15.6 million figure represents the total value of this specific contract. To assess its comparability, one would need to examine previous contracts for the same or equivalent kits, considering factors like quantity, specific components included, inflation, and any modifications or upgrades over time. Analyzing trends in the U.S. Coast Guard's aviation maintenance budgets and procurement history for the HH-65 fleet would provide a broader context for evaluating whether this expenditure is in line with past investments or represents a significant deviation.

What are the potential risks associated with a sole-source award for critical aircraft components?

Sole-source awards for critical aircraft components carry several potential risks. Firstly, the absence of competition can lead to inflated prices, as the contractor faces no pressure to offer the most cost-effective solution. Secondly, it can reduce the incentive for the contractor to innovate or improve efficiency, knowing they are the only option. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch suppliers in the future. Finally, a sole-source award might indicate a lack of market research or planning by the procuring agency, potentially missing opportunities for better value or alternative solutions.

What is the expected impact of these completion kits on the operational readiness of the HH-65 aircraft fleet?

These completion kits are expected to directly enhance the operational readiness of the U.S. Coast Guard's HH-65 aircraft fleet. Completion kits typically include necessary components, modifications, or upgrades required to bring aircraft to a specific operational standard or to extend their service life. By ensuring that the HH-65s are equipped with the latest or required configurations, these kits contribute to the reliability, safety, and overall mission capability of the helicopters. This, in turn, supports the Coast Guard's ability to perform its diverse missions, such as search and rescue, maritime law enforcement, and port security.

Are there any known issues or performance concerns with Airbus Helicopters, Inc. regarding previous contracts with the U.S. Coast Guard or other agencies?

The provided data does not contain information regarding specific performance issues or concerns with Airbus Helicopters, Inc. on previous contracts. A comprehensive assessment of the contractor's track record would require reviewing contract performance reports, past performance evaluations, and any documented disputes or corrective actions from federal procurement databases. While Airbus Helicopters is a major global manufacturer with extensive experience, individual contract performance can vary. Without access to detailed historical performance data, it's not possible to definitively state whether there are known issues relevant to this specific award.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Airbus U.S. Space & Defense, Inc. (UEI: 403284867)

Address: 2701 FORUM DR, GRAND PRAIRIE, TX, 90

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $16,108,392

Exercised Options: $16,108,392

Current Obligation: $15,622,749

Parent Contract

Parent Award PIID: HSCG3807D200006

IDV Type: IDC

Timeline