DoD's $522M Afghanistan air movement contract awarded to AAR Airlift Group, spanning 7 years

Contract Overview

Contract Amount: $522,231,654 ($522.2M)

Contractor: AAR Airlift Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-09-30

End Date: 2017-09-30

Contract Duration: 2,557 days

Daily Burn Rate: $204.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MOVEMENT OF PASSENGERS AND CARGO IN AFGHANISTAN.

Plain-Language Summary

Department of Defense obligated $522.2 million to AAR AIRLIFT GROUP, INC. for work described as: MOVEMENT OF PASSENGERS AND CARGO IN AFGHANISTAN. Key points: 1. Contract value of $522.2M over 7 years suggests significant operational tempo and reliance on air transport for personnel and cargo. 2. Full and open competition indicates a potentially robust market for these services, though the specific number of bidders is not detailed. 3. The contract's duration and scale present potential risks related to contractor performance, cost overruns, and evolving mission requirements. 4. Awarded by USTRANSCOM, this contract likely supported critical logistical operations in a complex and dynamic environment. 5. The 'Nonscheduled Chartered Passenger Air Transportation' service type highlights the need for flexible and responsive air mobility solutions. 6. Fixed-price contract type aims to control costs, but the large value warrants scrutiny for potential cost efficiencies.

Value Assessment

Rating: fair

The total contract value of $522.2 million over approximately seven years averages to about $74.6 million annually. Without specific per-flight or per-hour cost data, a direct value-for-money assessment is challenging. However, the scale of the award suggests substantial operational needs. Benchmarking against similar large-scale airlift contracts, especially those in contingency operations, would be necessary for a more precise evaluation of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. While the number of bids received (10) is provided, the specific details of the bidding process and the range of proposals are not available. This level of competition is generally positive for price discovery, but the ultimate price achieved depends on the specific requirements and market conditions at the time of award.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages competitive pricing and potentially leads to lower costs for the government compared to sole-source or limited competition awards.

Public Impact

Beneficiaries include U.S. military personnel and potentially allied forces requiring transportation and cargo movement within Afghanistan. Services delivered encompass nonscheduled chartered passenger and cargo air transportation, crucial for logistical support in a theater of operations. Geographic impact is primarily within Afghanistan, supporting military operations and personnel deployment/redeployment. Workforce implications include employment for pilots, maintenance crews, logistics personnel, and support staff for the prime contractor and subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (7 years) increases risk of cost escalation and potential misalignment with evolving mission needs.
Operating in a contingency environment like Afghanistan presents inherent risks to flight operations and personnel safety.
The large contract value necessitates robust oversight to ensure funds are used efficiently and effectively.
Lack of detailed performance metrics or specific unit costs makes it difficult to assess the contractor's efficiency and value delivery.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process that can lead to better pricing.
The fixed-price contract type provides cost certainty for the government, assuming the scope remains stable.
A single prime contractor managing complex airlift operations can streamline coordination and accountability.
The contract's duration suggests a stable, long-term requirement, allowing for potential economies of scale and contractor investment.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aviation services and logistics. The market for military airlift is dominated by a few large players, but charter services can involve a wider range of specialized providers. The value of this contract is significant, representing a substantial portion of spending on air transportation within a specific operational theater. Comparable spending benchmarks would typically involve analyzing other large airlift contracts awarded by USTRANSCOM or other military branches for similar operational environments.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the scale and nature of the services (large-scale airlift operations), it is likely that the prime contractor, AAR Airlift Group, Inc., is a large business. Subcontracting opportunities may exist for smaller firms providing specialized support services, but the primary award is not directed towards small businesses. The impact on the small business ecosystem would depend on the extent of subcontracting opportunities offered.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Transportation Command (USTRANSCOM), the awarding agency. Accountability measures would be embedded in the contract's terms and conditions, including performance standards, reporting requirements, and potential penalties for non-compliance. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply to investigate any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Military Sealift Command (MSC) contracts
Air Mobility Command (AMC) contracts
Logistics and transportation services contracts
Afghanistan reconstruction and security contracts
Contingency operations support contracts

Risk Flags

Long contract duration
Contingency operations environment
Potential for scope creep
Reliance on contractor performance
Geopolitical instability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $522.2 million to AAR AIRLIFT GROUP, INC.. MOVEMENT OF PASSENGERS AND CARGO 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 $522.2 million.

What is the period of performance?

Start: 2010-09-30. End: 2017-09-30.

What was the specific performance history of AAR Airlift Group, Inc. on similar government contracts prior to this award?

Assessing AAR Airlift Group, Inc.'s prior performance is crucial for understanding their capability to execute a contract of this magnitude. While specific details are not in the provided data, a thorough review would involve examining past performance evaluations (e.g., CPARS reports) on similar government contracts, particularly those involving airlift services in complex or austere environments. This would include looking at their track record for on-time delivery, safety incidents, cost control, and responsiveness to government needs. A history of strong performance on comparable contracts would increase confidence in their ability to meet the requirements of this $522 million award, whereas a pattern of deficiencies could signal potential risks.

How does the average annual value of this contract compare to other major airlift contracts awarded by the DoD during the same period?

The average annual value of this contract is approximately $74.6 million ($522.2M / 7 years). To benchmark this, one would compare this figure against other significant airlift contracts awarded by the Department of Defense or its components (like USTRANSCOM or Air Mobility Command) around the 2010-2017 timeframe. This comparison should consider the scope of services (e.g., passenger vs. cargo, fixed-wing vs. rotary-wing, theater of operations). If this contract's annual value is significantly higher or lower than comparable contracts for similar services and operational contexts, it could indicate either exceptional value or potential overpricing/underbidding. Without access to a broader dataset of contemporaneous contracts, a precise comparison is difficult, but the scale suggests it was a substantial requirement.

What were the key risk factors identified during the solicitation and award process for this contract, and how were they mitigated?

Key risk factors for a contract of this nature and duration, especially in a contingency environment like Afghanistan, would likely include operational risks (e.g., security threats, weather, airspace congestion), performance risks (e.g., contractor's ability to maintain aircraft, meet schedules), financial risks (e.g., cost overruns, fuel price volatility), and geopolitical risks (e.g., changes in U.S. policy or presence in Afghanistan). Mitigation strategies would typically involve stringent performance requirements, robust safety protocols, clear communication channels, contingency planning, and potentially contract clauses addressing fuel price adjustments or scope changes. The government's mitigation would also include thorough vetting of the contractor's capabilities and financial stability during the full and open competition process.

What was the intended mission effectiveness or program outcome that this contract was designed to achieve?

This contract was designed to ensure the reliable and timely movement of passengers and cargo within Afghanistan, supporting U.S. military operations, logistical sustainment, and potentially humanitarian aid or reconstruction efforts. The intended outcome was to provide flexible, on-demand air transportation capabilities that could adapt to the dynamic needs of the theater commander. This included facilitating troop rotations, delivering essential supplies, evacuating personnel if necessary, and generally maintaining the operational tempo required for mission success in a challenging environment. The 'nonscheduled chartered' nature implies a need for rapid response and adaptability beyond the capabilities of fixed-wing strategic airlift.

How has spending on nonscheduled chartered air transportation services by the DoD evolved over the period this contract was active (2010-2017)?

Spending on nonscheduled chartered air transportation services by the DoD likely saw fluctuations between 2010 and 2017, influenced by the evolving operational tempo in Afghanistan and other theaters, as well as broader defense budget trends. During the earlier part of this period, troop levels in Afghanistan were high, potentially driving demand for such services. As operations shifted towards drawdown or different strategic priorities, demand might have decreased. Analyzing overall DoD spending trends in this category would reveal whether this $522 million contract represented a significant portion of the total expenditure, or if it was one of many similar awards. It's also possible that increased reliance on private military contractors for specialized services influenced spending patterns.

Were there any significant contract modifications or change orders issued during the life of this contract, and what was their impact?

Information regarding specific contract modifications or change orders is not present in the provided summary data. However, for a contract spanning seven years in a dynamic operational environment like Afghanistan, modifications are highly probable. These could range from adjustments in delivery points, changes in aircraft types or capacity, modifications to schedules, or alterations in the scope of services due to evolving mission requirements or security conditions. Significant modifications could impact the total contract value, delivery timelines, and overall cost-effectiveness. A detailed analysis would require reviewing the contract's modification history to understand the nature and financial implications of any changes.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HTC71110RR001

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aarcorp

Address: 2301 COMMERCE PARK DR NE, PALM BAY, FL, 32905

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

Financial Breakdown

Contract Ceiling: $574,726,743

Exercised Options: $522,231,654

Current Obligation: $522,231,654

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71110DR026

IDV Type: IDC

Timeline