DoD's $19.6M Sikorsky support contract shows fair value despite limited competition

Contract Overview

Contract Amount: $19,627,422 ($19.6M)

Contractor: Sikorsky Support Services Inc

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2008-09-30

Contract Duration: 365 days

Daily Burn Rate: $53.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: FIXED MAINT

Place of Performance

Location: PENSACOLA, ESCAMBIA County, FLORIDA, 32504

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $19.6 million to SIKORSKY SUPPORT SERVICES INC for work described as: FIXED MAINT Key points: 1. Contract value appears reasonable given the specialized nature of aviation maintenance. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. Performance risk seems low due to contractor's established relationship and specialized services. 4. Contract duration was short, suggesting a need for ongoing support. 5. This contract falls within the broader category of aviation support services for defense. 6. No small business set-aside was utilized, indicating a focus on specialized capabilities.

Value Assessment

Rating: fair

The contract's value of approximately $19.6 million for a one-year period for fixed maintenance appears within a reasonable range for specialized aviation support. Benchmarking against similar contracts for depot-level maintenance of complex aircraft systems is challenging without more specific service details. However, the cost-plus-fixed-fee (CPFF) contract type suggests that the government aimed to control costs while ensuring the necessary services were performed. The obligated amount of $19.6M for the base year is a significant investment, and its value is contingent on the criticality and complexity of the maintenance provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the data does not specify the number of bids received. A full and open competition is generally preferred as it maximizes the pool of potential offerors and fosters a competitive environment, which can lead to better pricing and innovation. The absence of specific details on the number of bidders makes it difficult to definitively assess the strength of the competition.

Taxpayer Impact: While full and open competition is ideal for taxpayers, the actual number of bids received is crucial. If only a few bids were submitted, the potential for significant cost savings may have been limited.

Public Impact

The primary beneficiaries are the Department of Defense (DoD) and its aviation units, ensuring aircraft readiness. Services delivered include fixed maintenance, crucial for operational capability and safety of military aircraft. The geographic impact is concentrated in Florida, where the contractor is located and services are likely performed. Workforce implications include employment for skilled aviation mechanics and technicians at Sikorsky Support Services Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition details: While advertised as full and open, the number of bidders is not specified, which could indicate a less competitive environment than ideal.
Cost-plus-fixed-fee structure: This contract type can sometimes lead to higher costs if not managed carefully, as contractor profit is fixed regardless of actual costs incurred.

Positive Signals

Contractor experience: Sikorsky Support Services Inc. likely possesses specialized expertise in maintaining Sikorsky aircraft, ensuring quality service.
Clear service requirement: 'FIXED MAINT' indicates a defined scope of work, reducing ambiguity.
Defined performance period: The contract has a clear start and end date, allowing for focused execution.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aviation maintenance and support services. The market for military aircraft maintenance is substantial, driven by the need to maintain a high level of operational readiness for complex and expensive assets. Companies like Sikorsky Support Services Inc. operate in a niche market requiring specialized skills, certifications, and facilities. Spending in this area is critical for national defense, ensuring that aircraft are safe, reliable, and mission-capable.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This is common for contracts requiring highly specialized technical expertise or large-scale support operations that may be beyond the capacity of many small businesses. The focus on a large, established contractor like Sikorsky suggests that the requirement was likely geared towards significant, complex maintenance tasks where specialized capabilities are paramount.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractors meet the terms and conditions of their contracts, including quality, delivery, and cost control. The 'pt' (Price Type) of 'COST NO FEE' suggests a specific cost-reimbursement structure that requires diligent oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting systems, though specific oversight reports are not detailed here.

Related Government Programs

Aircraft Depot Maintenance
Aviation Support Services
Defense Logistics Support
Rotary Wing Aircraft Maintenance

Risk Flags

Limited Competition Data
Cost Control Oversight Needed for CNF Contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.6 million to SIKORSKY SUPPORT SERVICES INC. FIXED MAINT

Who is the contractor on this award?

The obligated recipient is SIKORSKY SUPPORT SERVICES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $19.6 million.

What is the period of performance?

Start: 2007-10-01. End: 2008-09-30.

What is the historical spending trend for fixed maintenance services provided by Sikorsky Support Services Inc. to the Department of Defense?

Analyzing historical spending requires access to a broader dataset of contracts awarded to Sikorsky Support Services Inc. by the DoD over multiple fiscal years. Without this data, it's impossible to determine a trend. However, the provided data point represents a single contract award of approximately $19.6 million for a one-year period. To establish a trend, one would need to aggregate spending on similar 'FIXED MAINT' or related aviation maintenance services over several years, identify any patterns of increase or decrease, and compare this to the overall DoD budget for aviation maintenance. This would reveal if spending on this contractor or type of service is growing, shrinking, or remaining stable.

How does the per-unit cost of this fixed maintenance contract compare to industry benchmarks for similar Sikorsky aircraft models?

Determining a precise per-unit cost benchmark is challenging without knowing the specific units (e.g., number of aircraft serviced, specific maintenance tasks performed per aircraft) and the exact nature of the 'FIXED MAINT' services. The contract value is $19.6 million for a 365-day duration. If we assume this contract covered maintenance for a fleet of, for example, 10 helicopters, the average cost per helicopter per year would be roughly $1.96 million. Industry benchmarks for depot-level maintenance of complex military helicopters can vary significantly based on model, age, condition, and the scope of work (e.g., scheduled inspections vs. unscheduled repairs). Specialized maintenance for high-value military assets often incurs substantial costs due to the complexity, required certifications, and stringent quality control measures. Without more granular data on the services rendered and the number of units supported, a direct comparison to industry benchmarks remains speculative.

What are the key performance indicators (KPIs) used to evaluate Sikorsky Support Services Inc.'s performance under this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, for a 'FIXED MAINT' contract related to aviation support, typical KPIs would likely include metrics such as aircraft availability rates, turnaround time for maintenance tasks, adherence to maintenance schedules, quality of repairs (e.g., defect rates post-maintenance), compliance with safety regulations, and timely delivery of services. The contract type, 'COST NO FEE' (CNF), implies that the contractor is reimbursed for allowable costs but does not receive a fee, placing a strong emphasis on efficient cost management and adherence to the scope of work. Performance would likely be monitored through regular progress reports, inspections, and potentially user feedback from the units operating the aircraft.

What is the potential risk associated with the 'COST NO FEE' (CNF) contract type in terms of cost overruns or contractor performance?

The 'COST NO FEE' (CNF) contract type is primarily used when the contractor has little or no direct control over costs, or when the government has a strong interest in the contractor performing the work regardless of cost, often for urgent national defense needs. For the contractor, the primary risk is that they will not receive a profit margin. For the government, the risk lies in potential cost overruns, as the contractor is reimbursed for all allowable costs incurred. While the contractor has no profit incentive to inflate costs, they may have less incentive to control them compared to fixed-price contracts. Effective government oversight is crucial to ensure that costs are reasonable, allocable, and allowable. Performance risk for the contractor is also present, as failure to perform adequately could lead to contract termination or other corrective actions, despite the absence of a fee.

How does the geographic location of this contract (Florida) align with the operational deployment of the supported aircraft?

The contract indicates the performance location is Florida ('st': 'FL', 'sn': 'FLORIDA'). This suggests that either the maintenance facilities are located in Florida, or the contractor's operations supporting the aircraft are based there. The alignment with operational deployment depends on where the specific aircraft supported by this contract are based or deployed from. If the aircraft are primarily based in or operate out of Florida, then having maintenance support located there would offer logistical advantages, potentially reducing transit times and costs associated with moving aircraft for servicing. Conversely, if the aircraft are deployed globally, a Florida-based maintenance hub might serve as a strategic location for certain types of maintenance or repairs, or it could indicate a specific fleet assignment to units operating in or near Florida.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 6900 MAIN ST, STRATFORD, CT, 03

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,627,422

Exercised Options: $19,627,422

Current Obligation: $19,627,422

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001906D0017

IDV Type: IDC

Timeline