DoD's $48.2M Sikorsky support contract awarded without competition, raising value-for-money questions

Contract Overview

Contract Amount: $48,207,127 ($48.2M)

Contractor: Sikorsky Support Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-10-24

End Date: 2012-09-30

Contract Duration: 342 days

Daily Burn Rate: $141.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

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 $48.2 million to SIKORSKY SUPPORT SERVICES, INC. for work described as: FIXED MAINT Key points: 1. Contract awarded on a firm-fixed-price basis, providing cost certainty but potentially limiting upside for the government if costs decrease. 2. The sole-source nature of this award warrants scrutiny regarding the justification for not pursuing a competitive process. 3. Performance is managed by the Defense Contract Management Agency, indicating a focus on execution oversight. 4. The contract falls under 'Other Support Activities for Air Transportation,' a broad category that may obscure specific service details. 5. A high number of contract actions (140,957) suggests a high volume of transactional activity or detailed task orders. 6. The contract duration of 342 days is relatively short, implying a need for ongoing or recurring support.

Value Assessment

Rating: questionable

The contract's value of $48.2 million for a single year of support services, awarded without competition, raises concerns about potential overpayment. Without benchmark data from comparable contracts or market rates for similar services, it is difficult to definitively assess value for money. The firm-fixed-price structure, while offering cost predictability, may not be optimal if the contractor's actual costs are significantly lower than anticipated. Further analysis of the contractor's historical performance and pricing on similar sole-source awards would be beneficial.

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 among multiple vendors. The justification for this approach is not provided in the data, but typically sole-source awards are made when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The government did not benefit from the potential cost savings that a competitive bidding process could have yielded.

Public Impact

The primary beneficiaries are likely the Department of Defense's aviation units requiring specialized support for Sikorsky aircraft. Services delivered include 'Other Support Activities for Air Transportation,' which could encompass maintenance, logistics, or operational support. The contract is geographically located in Florida (ST: FL, SN: FLORIDA), indicating a specific regional operational focus. Workforce implications are tied to the specialized skills required for supporting Sikorsky aircraft, potentially involving highly trained technicians and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may result in higher costs.
Lack of detailed service description within 'Other Support Activities for Air Transportation' hinders performance assessment.
High number of contract actions (140,957) could indicate administrative burden or potential for unmanaged task orders.
Firm-fixed-price contract may not capture cost savings if contractor's expenses are lower than anticipated.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded to SIKORSKY SUPPORT SERVICES, INC., a known entity in aviation support, suggesting potential for specialized expertise.
Managed by Defense Contract Management Agency, implying oversight of contract execution.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on support services for aircraft. The market for specialized aviation support is often characterized by a limited number of highly qualified providers, particularly for specific aircraft types like those manufactured by Sikorsky. While the exact market size for this niche is difficult to pinpoint, the Department of Defense represents a significant customer base for such services. Comparable spending benchmarks would typically involve analyzing other support contracts for similar military aircraft platforms.

Small Business Impact

The data indicates that small business participation (SB: false) and set-asides (SS: false) were not factors in this particular contract award. As a sole-source award to a large corporation, there are no direct subcontracting implications for small businesses stemming from this specific contract. The absence of small business involvement means no direct contribution to the small business ecosystem through this procurement.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be embedded within the contract's terms and conditions, including performance standards and payment schedules. Transparency is limited due to the sole-source nature and the lack of detailed public information regarding the justification for the award and the specific services rendered. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Aviation Support Contracts
Sikorsky Aircraft Maintenance and Logistics
Air Transportation Support Services
Firm-Fixed-Price Service Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award without clear justification.
Potential for uncompetitive pricing.
High volume of contract actions may indicate administrative inefficiency.
Lack of detailed service description hinders performance assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.2 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 $48.2 million.

What is the period of performance?

Start: 2011-10-24. End: 2012-09-30.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under circumstances such as: only one responsible source exists, an urgent and compelling need exists that would cause unacceptable delays if a competitive process were followed, or a treaty or international agreement requires it. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to verify the necessity of bypassing the competitive bidding process for this $48.2 million contract.

How does the $48.2 million contract value compare to similar support services for Sikorsky aircraft?

Direct comparison of the $48.2 million contract value is challenging without access to a database of similar sole-source or competed contracts for Sikorsky aircraft support services. However, for a single year of support, this amount suggests a significant scope of work or high-value specialized services. Factors influencing cost include the specific aircraft model, the type of support (e.g., depot-level maintenance, component repair, logistics), and the required response times. A comprehensive benchmark would require analyzing contracts with similar service descriptions, contract types, and durations, ideally from multiple sources to assess market rates.

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

The primary risk associated with a sole-source award of this magnitude is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. Other risks include vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility and innovation. There's also a risk of complacency from the contractor, as there is no immediate threat of losing the business to a competitor. Ensuring robust oversight and performance management becomes even more critical in sole-source situations.

What does the high number of contract actions (140,957) signify for this contract?

The exceptionally high number of contract actions (140,957) for a single delivery order suggests a highly granular level of tasking or invoicing. This could represent numerous individual repair orders, parts requisitions, labor hours logged, or other discrete service events. While it indicates a high volume of activity, it also presents a significant administrative burden for both the contractor and the government oversight agencies. It raises questions about the efficiency of the contracting process and whether a more streamlined approach could have been employed, potentially through different contract structures or task order management systems.

What is the track record of SIKORSKY SUPPORT SERVICES, INC. on similar government contracts?

Information on SIKORSKY SUPPORT SERVICES, INC.'s track record on similar government contracts is not detailed in the provided data snippet. However, as a likely subsidiary or affiliate of Sikorsky Aircraft (a Lockheed Martin company), the entity is expected to possess specialized knowledge and experience in supporting Sikorsky helicopter platforms. A thorough assessment would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), previous contract awards, and any documented issues or successes related to their government service contracts.

How does the firm-fixed-price (FFP) contract type impact value for money in this context?

The Firm-Fixed-Price (FFP) contract type aims to provide cost certainty to the government by establishing a final price that is not subject to adjustment based on the contractor's cost experience. In this context, it means the government knows the maximum cost upfront. However, for service contracts where costs can fluctuate, FFP can incentivize the contractor to minimize costs, potentially leading to reduced quality if not carefully monitored. Conversely, if the contractor's actual costs are significantly lower than the fixed price, the government may not realize the full benefit of cost savings, unlike in cost-reimbursement contracts. The value for money depends heavily on the accuracy of the initial price negotiation and the contractor's efficiency.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 7282 PLANTATION RD STE 301, PENSACOLA, FL, 32504

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $48,207,127

Exercised Options: $48,207,127

Current Obligation: $48,207,127

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001911D0014

IDV Type: IDC

Timeline