DoD's $417M contract for Afghan air transport services awarded via full and open competition

Contract Overview

Contract Amount: $416,890,687 ($416.9M)

Contractor: Vertical DE Aviacion S a S EN Reorganizacion

Awarding Agency: Department of Defense

Start Date: 2010-09-30

End Date: 2014-10-31

Contract Duration: 1,492 days

Daily Burn Rate: $279.4K/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 $416.9 million to VERTICAL DE AVIACION S A S EN REORGANIZACION for work described as: MOVEMENT OF PASSENGERS AND CARGO IN AFGHANISTAN. Key points: 1. Contract awarded to Vertical de Aviacion S A S EN REORGANIZACION for nonscheduled chartered passenger air transportation. 2. Significant duration of 1492 days suggests a long-term operational need. 3. Firm Fixed Price contract type indicates predictable costs for the government. 4. Awarded under full and open competition, suggesting a robust bidding process. 5. The contract value of $417M represents a substantial investment in logistical support. 6. No small business set-aside was utilized for this contract. 7. The contract was awarded by USTRANSCOM, a key logistics command within the DoD.

Value Assessment

Rating: fair

The total contract value of $417,008,687.29 over approximately four years for nonscheduled chartered passenger air transportation in Afghanistan is substantial. Benchmarking this against similar large-scale, long-duration air charter contracts in complex operational environments is challenging due to unique risk factors and demand fluctuations. However, the firm fixed-price structure provides cost certainty. Without specific per-flight or per-passenger data, a precise value-for-money assessment is difficult, but the scale suggests significant operational requirements.

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 a bid. The presence of 11 bidders suggests a competitive marketplace for these specialized air transportation services. A higher number of bidders generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie for the award.

Taxpayer Impact: The full and open competition likely resulted in a more competitive pricing structure, potentially saving taxpayer dollars compared to a sole-source or limited competition award. The robust bidding process ensures that the government explored a wide range of options.

Public Impact

Beneficiaries include U.S. military personnel and potentially other government personnel operating in Afghanistan. Services delivered are nonscheduled chartered passenger air transportation, crucial for troop movement and logistical support. Geographic impact is focused on Afghanistan, supporting operations within that theater. Workforce implications include the employment of pilots, aircrew, maintenance personnel, and support staff for the contracted airline.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Geopolitical instability in Afghanistan could impact operational continuity and safety.
Reliance on a single contractor for a significant duration carries inherent risks if performance issues arise.
Fluctuations in demand for air transport could lead to underutilization or strain on resources.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm Fixed Price contract provides cost predictability.
Long contract duration suggests a sustained need and potential for contractor stability.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on air transportation services. The market for specialized air charter services, particularly in support of military operations in challenging environments, is often characterized by a limited number of highly qualified providers. The significant value of this contract highlights the substantial government investment in maintaining air mobility capabilities for overseas operations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans with small businesses. This suggests that the primary awardee is likely a larger entity, and opportunities for small businesses may be limited unless they are part of the supply chain or subcontracting network not detailed here.

Oversight & Accountability

Oversight would typically be managed by the contracting officer's representative (COR) and the Defense Contract Management Agency (DCMA). Transparency is facilitated through contract award databases like FPDS. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Air Transport Services
Logistics and Transportation Support
Afghanistan Operations Support Contracts
Passenger Air Charter Services

Risk Flags

Operational Risk in Afghanistan
Contractor Performance Risk
Long-Term Dependency Risk
Geopolitical Instability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $416.9 million to VERTICAL DE AVIACION S A S EN REORGANIZACION. MOVEMENT OF PASSENGERS AND CARGO IN AFGHANISTAN.

Who is the contractor on this award?

The obligated recipient is VERTICAL DE AVIACION S A S EN REORGANIZACION.

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $416.9 million.

What is the period of performance?

Start: 2010-09-30. End: 2014-10-31.

What was the historical spending pattern for nonscheduled chartered passenger air transportation in Afghanistan prior to this contract?

Analyzing historical spending patterns for similar services in Afghanistan prior to this $417 million contract is crucial for context. While specific pre-award data for this exact service is not provided, USTRANSCOM and other DoD entities have historically allocated significant funds towards air mobility and logistical support in operational theaters like Afghanistan. This often involves a mix of organic military airlift and contracted commercial services to meet fluctuating demands and specialized requirements. Previous contracts may have varied in scope, duration, and pricing mechanisms (e.g., time-and-materials vs. fixed-price). Understanding these trends would help assess whether this contract represents an increase, decrease, or stable level of investment in such services for the region.

How did the number of bidders (11) compare to similar large-scale air charter contracts awarded by the DoD?

The award of this contract to Vertical de Aviacion S A S EN REORGANIZACION involved 11 bidders, which is a moderately competitive number for a large-scale, specialized service like nonscheduled chartered passenger air transportation in a complex environment. For similar high-value, long-duration air charter contracts, particularly those supporting overseas contingency operations, the number of bidders can vary significantly. Contracts requiring unique aircraft types, extensive operational experience in austere locations, or specific security clearances might see fewer bidders. Conversely, more standardized services might attract a larger pool. An 11-bidder scenario suggests sufficient market interest to foster competition, likely leading to better pricing than a sole-source award, but perhaps not the intense competition seen in more commoditized service areas.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance under this contract?

While the specific Key Performance Indicators (KPIs) are not detailed in the provided data, contracts of this nature typically include stringent performance metrics. These often revolve around on-time performance (departure and arrival), flight safety records, aircraft availability and serviceability, passenger and cargo handling efficiency, and adherence to mission requirements. For nonscheduled chartered passenger air transportation, punctuality and reliability are paramount. Failure to meet these KPIs could result in contractual penalties, reduced payments, or even termination. The firm fixed-price nature of the contract incentivizes the contractor to meet these standards efficiently to maximize profit.

What specific risks were identified during the solicitation process for this contract, and how were they mitigated?

Given the operational environment in Afghanistan and the nature of air transportation, several risks would likely have been identified during the solicitation for this contract. These could include geopolitical instability, security threats to aircraft and personnel, potential for flight delays due to weather or operational constraints, and the contractor's financial stability and capacity to sustain operations over a long duration. Mitigation strategies might have included requiring robust security plans from the contractor, incorporating clauses for force majeure or operational pauses, demanding strong financial health assessments, and potentially requiring performance bonds. The firm fixed-price structure itself mitigates cost overrun risks for the government, shifting that burden to the contractor.

How does the $417M contract value compare to the total annual budget for USTRANSCOM's air mobility division?

The $417 million contract value represents a significant portion of USTRANSCOM's budget allocated for air mobility, particularly for services in a specific operational theater like Afghanistan over a multi-year period. USTRANSCOM's overall budget is substantial, encompassing global logistics, transportation, and distribution. While the exact breakdown for air mobility divisions and specific theater support isn't publicly detailed in this context, a single contract of this magnitude underscores the critical reliance on contracted air services to supplement military assets. It suggests that such contracts are a major component of ensuring operational reach and flexibility, especially in demanding environments where organic assets may be insufficient or unsuitable.

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

Address: NUEVA ZONA DE AVIACION GENERAL, HANGAR 19, AEROPUERTO E, BOGOTA

Business Categories: Category Business, Foreign Owned, International Organization, Minority Owned Business, Other Minority Owned Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $453,106,871

Exercised Options: $416,890,687

Current Obligation: $416,890,687

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71110DR027

IDV Type: IDC

Timeline