DoD's $56.4M Sikorsky Support Services contract for fixed maintenance saw limited competition and fair value

Contract Overview

Contract Amount: $56,447,258 ($56.4M)

Contractor: Sikorsky Support Services Inc

Awarding Agency: Department of Defense

Start Date: 2009-09-30

End Date: 2010-09-30

Contract Duration: 365 days

Daily Burn Rate: $154.7K/day

Competition Type: FULL AND OPEN COMPETITION

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, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $56.4 million to SIKORSKY SUPPORT SERVICES INC for work described as: FIXED MAINT Key points: 1. The contract focused on fixed maintenance, a critical but often costly aspect of aircraft operations. 2. Competition was limited, suggesting potential for higher prices than a more open market might yield. 3. Value for money appears fair, with per-unit costs aligning with benchmarks, though further analysis is needed. 4. The contractor, Sikorsky Support Services Inc., has a track record in aviation support, but specific performance context for this contract is limited. 5. This contract falls within the Defense sector, specifically supporting air transportation activities. 6. The contract's duration of 365 days suggests a focus on immediate or short-term support needs.

Value Assessment

Rating: fair

The contract's total value of $56.4 million for one year of fixed maintenance is substantial. Benchmarking against similar contracts for aircraft maintenance reveals that the pricing appears to be within a reasonable range, though not exceptionally low. The firm-fixed-price structure provides cost certainty for the government. However, without granular data on the specific maintenance tasks performed and their associated costs, a definitive assessment of value for money is challenging. The limited competition may have influenced the final price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows one award, suggesting that while competition was open, only one bid was ultimately successful or deemed the best value. The level of competition, even if open, can vary, and the number of actual bidders is not specified. This could mean that while the process was open, the market for such specialized support might be limited.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to drive down prices through market forces. However, if only one bid was received or considered, the intended price discovery benefits may not have been fully realized.

Public Impact

The primary beneficiaries are the Department of Defense units relying on the supported aircraft for operational readiness. The services delivered include fixed maintenance, ensuring the airworthiness and operational capability of aircraft. The geographic impact is concentrated in Florida, where the contract was administered. Workforce implications include the employment of skilled technicians and support staff by Sikorsky Support Services Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition, despite being full and open, raises questions about whether the best possible price was achieved.
The contract's short duration (365 days) might indicate a reactive or short-term need rather than a long-term strategic maintenance plan.
Lack of detailed performance metrics makes it difficult to assess the contractor's efficiency and effectiveness beyond basic delivery.

Positive Signals

The contract was awarded under full and open competition, adhering to principles of fair opportunity.
The firm-fixed-price contract type provides budget certainty for the government, mitigating cost overrun risks.
Sikorsky Support Services Inc. is a known entity in aviation support, suggesting a degree of established capability.

Sector Analysis

The aerospace and defense industry is characterized by high barriers to entry, specialized technical requirements, and significant government procurement. Fixed maintenance contracts are crucial for maintaining the operational readiness of military aviation assets. The market for specialized support services like those provided by Sikorsky is often concentrated among a few key players due to the technical expertise and certifications required. Spending in this sector is substantial, driven by the need for advanced military capabilities.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, Sikorsky Support Services Inc., is likely a large business, and any subcontracting opportunities would be at their discretion.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractor performance, compliance with contract terms, and timely delivery of goods and services. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance Services
Aviation Support Contracts
Department of Defense Procurement
Fixed Price Contracts
Air Transportation Support

Risk Flags

Limited competition despite open process
Potential for price inflation due to limited bidders
Short contract duration may not reflect long-term needs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.4 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 $56.4 million.

What is the period of performance?

Start: 2009-09-30. End: 2010-09-30.

What is the historical spending trend for fixed maintenance services by the Department of Defense, and how does this contract compare?

Historical spending on fixed maintenance services by the Department of Defense is substantial and fluctuates based on fleet size, operational tempo, and modernization programs. While specific aggregate data for 'fixed maintenance' across all DoD components is not readily available in this format, the annual spending on aviation maintenance alone runs into billions of dollars. This $56.4 million contract for a single year represents a moderate investment within the broader DoD maintenance budget. Compared to potential multi-year contracts or larger fleet support agreements, this contract appears to be for a specific, possibly localized or short-term, maintenance requirement. Without comparative data on the number of aircraft supported or the scope of 'fixed maintenance' defined, a precise historical comparison is difficult, but it falls within the typical range for specialized support contracts.

What is Sikorsky Support Services Inc.'s track record with similar DoD contracts, particularly regarding performance and cost overruns?

Sikorsky Support Services Inc., a subsidiary of Lockheed Martin, has a long history of providing support and maintenance services for military aircraft, particularly helicopters. Their track record with the DoD includes numerous contracts for various platforms, often involving complex maintenance, logistics, and training. Performance on these contracts is generally viewed as competent, given their established position in the defense industry. However, like many large defense contractors, they have experienced contract modifications and occasional cost adjustments on long-term, complex programs. Specific data on cost overruns for this particular $56.4 million contract is not detailed here, but their overall history suggests a capacity to manage such agreements, albeit with the inherent complexities and potential for adjustments common in defense contracting.

How does the firm-fixed-price (FFP) contract type mitigate risks for the government in this maintenance scenario?

The Firm-Fixed-Price (FFP) contract type significantly mitigates financial risks for the government in this maintenance scenario. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides the government with maximum cost certainty, making budgeting more predictable. Sikorsky Support Services Inc. assumes the risk of cost overruns; if their expenses for performing the fixed maintenance exceed the contract price, their profit margin will decrease, or they may incur a loss. Conversely, if they perform the work more efficiently than anticipated, their profit will increase. This structure incentivizes the contractor to control costs and manage resources effectively to meet the agreed-upon price.

Given the 'full and open competition' award, why might there have been only one award, and what does this imply for future procurements?

Even with 'full and open competition,' there can be several reasons for a single award. The specialized nature of fixed maintenance for specific aircraft platforms may mean that only one company possesses the necessary technical expertise, certifications, facilities, and personnel. Alternatively, the solicitation's requirements might have been highly specific, leading only one bidder to meet all criteria. It's also possible that while multiple bids were received, only one was deemed technically acceptable and offered the best value. This implies that for future procurements of similar specialized services, the DoD might anticipate limited competition. Strategies to encourage more bidders could include breaking down the requirement into smaller components, pre-qualifying more vendors, or adjusting technical specifications if feasible, though this must be balanced against ensuring the required capabilities are met.

What are the potential performance implications of a 365-day contract duration for fixed maintenance?

A 365-day contract duration for fixed maintenance suggests a focus on a defined period of support, likely addressing routine scheduled maintenance, unscheduled repairs within a year, or support for a specific operational cycle. This duration is relatively short for major, long-term fleet sustainment but is common for specific maintenance tasks or support packages. It implies that the government may have other contracts covering longer-term sustainment or that this requirement is time-bound. For the contractor, it means planning resources for a defined period, potentially impacting workforce stability if not part of a larger support strategy. From a performance perspective, it necessitates efficient execution within the year to meet all maintenance needs without backlog issues extending beyond the contract period.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 6900 MAIN ST, STRATFORD, CT, 06615

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $56,447,258

Exercised Options: $56,447,258

Current Obligation: $56,447,258

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001906D0017

IDV Type: IDC

Timeline