DoD spent $26.3M on Afghanistan air transport, with AAR Airlift Group winning a fixed-price contract

Contract Overview

Contract Amount: $26,282,738 ($26.3M)

Contractor: AAR Airlift Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-10-01

End Date: 2008-09-30

Contract Duration: 365 days

Daily Burn Rate: $72.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: AFGHANISTAN SHORT TAKE-OFF AND LANDING. PASSENGER AND CARGO MOVEMENT IN AFGHANISTAN.

Plain-Language Summary

Department of Defense obligated $26.3 million to AAR AIRLIFT GROUP, INC. for work described as: AFGHANISTAN SHORT TAKE-OFF AND LANDING. PASSENGER AND CARGO MOVEMENT IN AFGHANISTAN. Key points: 1. The contract aimed to provide essential passenger and cargo movement within Afghanistan. 2. AAR Airlift Group, Inc. was the awarded contractor. 3. The contract was awarded under a full and open competition. 4. The contract duration was one year. 5. The contract type was Firm Fixed Price, indicating predictable costs for the government. 6. The base award value was $7.2M, with the total obligation reaching $26.3M.

Value Assessment

Rating: fair

The total obligated amount of $26.3M significantly exceeded the base award of $7.2M, suggesting substantial growth in demand or scope during the contract period. Without more detailed breakdowns of services rendered against the total obligation, it's difficult to definitively assess value for money. However, the firm fixed-price structure provides some cost certainty. Benchmarking against similar air transport contracts in similar operational environments would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bids suggests a moderate level of competition for this service. While not a large number of bidders, full and open competition generally promotes price discovery and encourages contractors to offer competitive pricing.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer funds are used efficiently by driving down costs compared to a sole-source award.

Public Impact

Beneficiaries include military personnel and support staff requiring movement within Afghanistan. Services delivered include the transportation of passengers and cargo. The geographic impact is focused on Afghanistan. Workforce implications include pilots, aircrew, and ground support personnel employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant increase from base award to total obligation ($7.2M to $26.3M) warrants further investigation into scope changes or unforeseen requirements.
Limited number of bids (2) may indicate a specialized market or potential barriers to entry for other competitors.
Operational environment in Afghanistan presents inherent risks to air transport operations.

Positive Signals

Firm Fixed Price contract type provides cost predictability.
Full and open competition process allows for multiple vendors to bid.
Contract was awarded to AAR Airlift Group, Inc., a known entity in the aviation services sector.

Sector Analysis

This contract falls within the broader air transportation services sector, specifically focusing on nonscheduled chartered passenger and cargo air transportation. This niche is critical for logistical support in complex or austere environments where regular airline services are not feasible. The market size for such specialized services can fluctuate based on geopolitical events and military operational needs. Comparable spending benchmarks would typically be found within USTRANSCOM's portfolio of similar airlift contracts.

Small Business Impact

There is no indication that this contract involved small business set-asides. The nature of large-scale airlift operations often favors larger, established aviation companies with the necessary fleet size, certifications, and operational experience. Subcontracting opportunities for small businesses might exist in areas like catering, ground support, or maintenance, but this would depend on the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight would typically be managed by the U.S. Transportation Command (USTRANSCOM) and potentially the Department of Defense's Inspector General. Accountability measures would be tied to contract performance clauses, delivery schedules, and safety standards. Transparency is facilitated by the contract award data being publicly available, though detailed performance metrics may be internal.

Related Government Programs

USTRANSCOM Airlift Services
Department of Defense Passenger and Cargo Movement
Afghanistan Operations Support Contracts

Risk Flags

Significant cost overrun from base award to total obligation.
Limited number of bidders in a full and open competition.
High-risk operational environment (Afghanistan).

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to AAR AIRLIFT GROUP, INC.. AFGHANISTAN SHORT TAKE-OFF AND LANDING. PASSENGER AND CARGO MOVEMENT IN AFGHANISTAN.

Who is the contractor on this award?

The obligated recipient is AAR AIRLIFT GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $26.3 million.

What is the period of performance?

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

What factors contributed to the significant increase in the contract's total obligation ($7.2M base to $26.3M total)?

The substantial increase from the base award value to the total obligated amount suggests that the initial scope of work or estimated demand was significantly underestimated, or that unforeseen operational requirements arose during the contract period. This could include increased flight hours, extended operational duration, expansion of service areas within Afghanistan, or a surge in passenger and cargo volume. Without specific contract modifications or performance reports, it is difficult to pinpoint the exact drivers. However, such increases often necessitate contract modifications to accommodate evolving mission needs in dynamic environments like Afghanistan. Further analysis would require access to contract modification details and performance data to understand the justification for the expanded spending.

How does the price per flight hour or per ton-mile compare to industry benchmarks for similar services in Afghanistan during 2007-2008?

Benchmarking the price per flight hour or per ton-mile for this contract against industry standards during the 2007-2008 period in Afghanistan is challenging without specific cost breakdowns. The provided data only shows the total obligated amount and base award. To perform a meaningful comparison, one would need to know the number of flight hours or the tonnage/volume of cargo moved against the total expenditure. Additionally, the operational environment in Afghanistan presented unique risks and costs (e.g., security, fuel, maintenance in austere conditions) that would likely elevate prices compared to standard commercial operations. Therefore, a direct comparison requires detailed operational metrics and an understanding of the risk premium associated with operating in that specific theater.

What was the track record of AAR Airlift Group, Inc. with similar government contracts prior to this award?

AAR Airlift Group, Inc. has a history of providing aviation services to government and military clients. Prior to this specific contract (awarded in late 2007), the company had likely engaged in various airlift and aviation support roles. Assessing their track record would involve reviewing past performance evaluations on similar contracts, particularly those involving military logistics, passenger and cargo transport in operational theaters, and adherence to safety and delivery schedules. A positive track record with previous government contracts, especially those managed by USTRANSCOM or other DoD components, would indicate a lower performance risk for this Afghanistan-based contract. Conversely, any past performance issues could serve as a warning sign.

What were the primary risks associated with providing air transportation in Afghanistan during the contract period?

Providing air transportation in Afghanistan between 2007 and 2008 carried significant risks. These included security threats such as ground fire, potential insurgent activity targeting aircraft, and the risk of improvised explosive devices (IEDs) near airfields. Environmental factors posed challenges, including challenging terrain, variable weather conditions, and limited infrastructure at many landing sites. Operational risks involved potential aircraft mechanical failures, the need for robust maintenance in austere conditions, and logistical complexities in managing fuel and spare parts. Furthermore, political instability and the evolving security situation could impact flight operations and routes. These risks often translate into higher operational costs and necessitate stringent safety protocols.

How did the 'Nonscheduled Chartered Passenger Air Transportation' service differ from scheduled military airlift operations?

Nonscheduled chartered passenger air transportation, as indicated by the NA code 481211, refers to services provided on demand, typically for specific missions or movements, rather than on a fixed, regular schedule. This contrasts with scheduled military airlift operations, which might operate on predetermined routes and timetables to support routine logistics or personnel rotations. Chartered services offer flexibility, allowing the military to contract for specific aircraft capacity and routes as needed, which can be more efficient for irregular or urgent requirements. This flexibility is crucial in dynamic operational environments like Afghanistan where mission needs can change rapidly. The 'chartered' aspect implies that the government is essentially renting the aircraft and crew for a specific purpose, rather than operating its own fleet.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Passenger Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HTC71107R0011

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aarcorp (UEI: 005425814)

Address: 114 HANGAR LN, CAMDEN, NC, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $26,282,738

Exercised Options: $26,282,738

Current Obligation: $26,282,738

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71108D0010

IDV Type: IDC

Timeline