The hidden cost of single source parts

That relationship is a real asset with real value, and nothing in this article is an argument for throwing it away.

It is an argument about a much narrower thing: whether the prices coming out of that relationship have ever been measured against anything. In most flight departments the honest answer is no, and the reason is not carelessness. It is that nobody ever wrote a policy requiring it, and in the absence of a policy the default is always the phone number you already have.

Why single sourcing happens, and why it is not laziness

Four things drive concentration, and three of them are unambiguously good.

• Trust. A supplier who knows your fleet makes fewer mistakes, and a mistake on an aircraft costs vastly more than a few points of markup. This is the strongest argument in the set and it is a genuinely good one.
• Terms. An open account, net 30, and a willingness to ship at eleven at night against a verbal because they know the PO is coming. That flexibility has cash value.
• Speed. One call really is faster than six. On a time critical requirement, speed converts directly into money.
• Volume leverage. Concentrate the spend, earn better pricing. Sound in theory.

The first three are usually true. The fourth is the interesting one, because it is the only claim in the list that nobody ever verifies. It is the justification most often given for single sourcing and the one least often tested, which is a strange position for a claim to occupy for six years running.

The loyalty tax, and why you cannot see it

Set aside the idea that anyone is gouging you. That is not usually what is happening and it is not what this is about. What is happening is quieter: your parts are being priced without reference to anything. That is a different problem, and a slower one, and it works through three mechanisms.

There is no price discovery, so there is no price

A number you have never compared is not a price. It is a number.

You do not know whether your loyalty earned you a discount or earned you an assumption, and there is no way to find out from inside the relationship. The supplier is not going to tell you, not because they are hiding it, but because they genuinely may not know either. Their pricing to you was set once, by someone, under conditions that no longer exist.

Markup drift

This is the one that actually costs money, and it is worth being precise about the mechanism because it is not what people expect.

Nobody wakes up one morning and decides to raise your markup. What happens is that a percentage gets set at the beginning of a relationship, in a particular market, against a particular cost basis. Then the market moves. Their acquisition cost changes, their discount tier with the manufacturer changes, the surplus market softens or tightens, and the dollar figure on your invoice moves along with all of that. The percentage sitting on top of it does not move, because nothing in the world ever forces it to be revisited.

Five years of that is not fraud. It is inertia. And inertia compounds quietly on every line item, in a spend category where nobody is running a variance report because there is nothing to run it against.

No leverage on the day service slips

Most DOMs feel this one before they can name it. Something changes. Same day becomes next day, then becomes three days. Callbacks get slower. The person who always picked up starts letting it go to voicemail during busy weeks.

And you have no move. You cannot credibly go somewhere else, because you have not been somewhere else in four years. There is no open account, no credit line, no relationship, and no one at the other end who knows your fleet. Loyalty is only leverage when there is a live alternative standing behind it. Without one, it is just dependence with a nicer name.

The part that costs the most is the question nobody asked

Ask a single source for a part and you will get an honest answer to the question you asked. What you will not get is the question you did not ask, and on rotables that omission is usually worth more than the markup.

A supplier offers what a supplier can supply. That is not a conspiracy. It is a business, and it would be strange if it worked any other way. But the decision in front of you is not "what does this part cost." It is a four way decision between buying outright, taking an exchange, repairing the core you already own, and using an approved alternative, and the right answer depends on your utilization, your ownership horizon, your cash position, and your owner’s tolerance for anything other than factory new.

Not one of those is a fact your supplier possesses.

Read the right hand column again, because it is the whole article. Two of those four options get volunteered enthusiastically by whoever holds the inventory. The other two structurally do not get volunteered by anyone, and they are frequently the cheaper answers.

A necessary word about approved alternatives

PMA parts and DER repairs deserve an honest treatment rather than a sales pitch, because business aviation is not air transport and the calculus genuinely differs.

The case for them is strong on paper. RAND, assessing whether the Department of Defense should expand its use of non OEM parts and repairs, noted that all major U.S. carriers already use PMA parts and DER repairs in their own fleets specifically to introduce competition, reduce cost, and maintain a more robust parts supply. Pricing is commonly cited at roughly 30 to 50 percent below the OEM equivalent, and both categories are approved by the FAA as airworthy.

The case against them, on a business jet specifically, is also real. PMA coverage is far thinner in business aviation than in air transport. Some OEM support programs and management agreements restrict them. A prospective buyer’s technical representative may scrutinize them at pre-buy, and residual value on a two owner airframe is not a theoretical concern.

All of which are legitimate reasons to decline. None of them are legitimate reasons never to be told the option existed. The decision belongs to the owner and the DOM. Single sourcing quietly removes the decision and replaces it with a default.

The risk nobody prices

There is a version of this argument that has nothing to do with money, and in the current market it may be the stronger one.

Deloitte’s 2026 aerospace and defense outlook describes persistent demand running headlong into shortages of materials and skilled labor, with supply chain pressure expected to continue through at least 2027. On the parts side the practical effect is dramatic: categories that used to quote four to six week lead times, including castings, forgings, bearing assemblies, and electronic line replaceable units, have routinely been quoting twenty to forty weeks and beyond.

In a market like that, a single source is not a relationship. It is a single point of failure.

The day your one supplier says "I cannot find it," you are not continuing a search. You are beginning one, cold, with no accounts anywhere else, no map of who stocks what, and an aircraft already down.

It is worth noticing that the airlines worked this out and wrote it down. Their stated reason for cultivating alternate parts and repair sources is not only price. It is supply chain robustness. They are deliberately hedging exactly the exposure that a single source flight department is carrying unhedged, and they are doing it with procurement departments and inventory analysts that a two aircraft operation does not have.

The test

One question, and it is not rhetorical. Write down the answer.

When did you last get two quotes on a four figure part?

For a lot of good departments the honest answer is somewhere between "I would have to check" and "not since the last shop change." Which is worth putting next to how the rest of the economy handles this.

Almost every university in America requires documented evidence of competitive pricing above a set dollar threshold, commonly $25,000. Organizations spending federal grant money operate under Uniform Guidance rules built around a micro purchase threshold of $10,000, above which some demonstration of competition is generally expected. These are institutions buying lab equipment and office furniture.

A flight department will spend more than either figure on a single rotable, on a Tuesday, on one phone call, with no threshold, no written policy, and no record of what was compared. Nobody designed that. It is just what happens when a policy is never written.

What a workable policy looks like

This does not need to be elaborate, and it should not create work for a department that is already short handed. Five lines will do it.

What competition is actually for

Here is the part that gets left out of most arguments for competitive sourcing, and leaving it out is why those arguments so often fail to land with people who have been doing this for twenty years.

The purpose of a second quote is usually not to change suppliers. Most of the time you will stay exactly where you are, and that is a correct outcome, not a failure of the exercise.

The purpose is that a relationship priced against a market is a fundamentally stronger relationship than one priced against nothing. It gives your supplier a reason to keep the number sharp. It gives you a reason to believe the number. And it converts "he takes care of us" from a private belief into something you can actually show an owner, a management company, a board, or an auditor who asks a reasonable question about a large parts spend.

One honest caveat, because overselling this would be its own kind of dishonesty. Reviews of the literature comparing competitive and sole source procurement find that competition often does produce savings, but that the savings are not always large and can be partly consumed by the cost of running the competition itself. That finding is real. It is also precisely the argument for making competition cheap to run, rather than the argument for not running it.

Competition without the workload

The reason departments do not get a second quote is almost never that they do not believe in second quotes. It is that the first quote costs four minutes and the second one costs forty. At that exchange rate, on a Tuesday, with three other things on fire, the second quote loses every single time.

That is the specific problem VHMX exists to remove. One request goes in. Multiple verified suppliers respond. What comes back is a comparison on the axes that actually matter: condition, tag and issuing authority, landed cost with freight and handling included, realistic lead time, core terms, and warranty. Not four phone calls transcribed onto a legal pad in four different formats.

Your incumbent is welcome in that pool, and we would encourage it. Most operators who run this discover their guy was competitive most of the time, which is a good day for everybody: he keeps the business, you keep the relationship, and now you have a record showing the pricing holds up. On the part numbers where he was not competitive, you find out before you buy instead of during a pre-buy two years later.

Suppliers never see each other. Nobody gets ambushed, nobody gets embarrassed, and none of this has to be a confrontation with a person you like and rely on.

Send us a part number you bought last month without shopping. We will tell you what the rest of the market would have said.

VHMX does not hold inventory and does not sell parts. We have no position in which supplier wins, which is the entire point. Your DOM decides what goes on the aircraft. We make sure the choice is made against the whole market instead of against a single number.

Sources and further reading: RAND Corporation, Applying Best Practices to Military Commercial-Derivative Aircraft Engine Sustainment: Assessment of Using Parts Manufacturer Approval (PMA) Parts and Designated Engineering Representative (DER) Repairs. Deloitte, 2026 Aerospace and Defense Industry Outlook. William N. Washington, A Review of the Literature: Competition Versus Sole-Source Procurements, Defense Acquisition University. 2 CFR 200, Uniform Administrative Requirements, micro purchase threshold. Published 2026 aviation supply chain lead time reporting. Industry pricing references on PMA and DER alternatives.