DoD's $269M contract for aircraft parts manufacturing shows fair value with a single award

Contract Overview

Contract Amount: $269,443,470 ($269.4M)

Contractor: Aai/Engineering Support Inc

Awarding Agency: Department of Defense

Start Date: 2003-07-17

End Date: 2014-09-30

Contract Duration: 4,093 days

Daily Burn Rate: $65.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: GOOSE CREEK, BERKELEY County, SOUTH CAROLINA, 29445

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $269.4 million to AAI/ENGINEERING SUPPORT INC for work described as: Key points: 1. The contract demonstrates a commitment to value for money through a competitive bidding process. 2. Competition dynamics indicate a healthy market for aircraft parts manufacturing, though this specific award was not intensely contested. 3. Risk indicators appear manageable given the firm-fixed-price structure and established contractor. 4. Performance context suggests a long-term relationship, implying satisfactory delivery over the contract's duration. 5. This contract positions the agency within the broader Defense sector's need for specialized aircraft components.

Value Assessment

Rating: good

The contract's total value of approximately $269 million over its lifespan suggests a significant investment in aircraft parts. While specific per-unit cost benchmarks are not provided, the firm-fixed-price structure generally indicates that the government secured pricing upfront. Comparing this to similar long-term contracts for specialized aircraft components would be necessary for a definitive value assessment, but the duration and scope imply a negotiated price reflecting market conditions at the time of award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Despite this broad competition, the award was made to a single contractor, AAI/Engineering Support Inc. This suggests that while the opportunity was widely advertised, only one bidder met all the requirements or offered the most advantageous proposal to the government.

Taxpayer Impact: A full and open competition, even with a single award, generally benefits taxpayers by ensuring that the government explored the market broadly and secured the best possible offer based on established criteria.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential aircraft parts and auxiliary equipment. Services delivered include the manufacturing and supply of critical components for military aircraft. The geographic impact is primarily centered around the contractor's operations in South Carolina, with broader implications for national defense readiness. Workforce implications include job creation and maintenance within the aerospace manufacturing sector, particularly in South Carolina.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the single awardee is the sole provider of highly specialized components.
Reliance on a single contractor could pose supply chain risks in the event of unforeseen contractor issues.

Positive Signals

Firm-fixed-price contract structure helps control costs and provides budget certainty.
Long contract duration (over 10 years) suggests a stable and reliable supply chain for essential parts.
Award under full and open competition indicates a thorough vetting process.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high technological barriers to entry and stringent quality requirements. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category, a vital segment supporting military aviation readiness. The market size for such components is substantial, driven by ongoing defense spending and the need to maintain aging aircraft fleets. Benchmarking this contract's value against other similar long-term supply agreements for specialized military aircraft parts would provide further context on its market alignment.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the award was not set aside for small businesses and the contractor is not identified as a small business. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary focus was on securing the necessary aircraft parts from the most capable source, rather than specifically promoting small business involvement in this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm-fixed-price contract type, which places the financial risk on the contractor for cost overruns. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Agency Contracts
Military Aircraft Maintenance and Repair
Aerospace Component Supply

Risk Flags

Single award could create supply chain vulnerability.
Long contract duration may reduce flexibility for adopting newer technologies.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $269.4 million to AAI/ENGINEERING SUPPORT INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is AAI/ENGINEERING SUPPORT 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 $269.4 million.

What is the period of performance?

Start: 2003-07-17. End: 2014-09-30.

What is the historical spending pattern for AAI/Engineering Support Inc. with the Department of Defense?

Analyzing the historical spending patterns for AAI/Engineering Support Inc. with the Department of Defense requires access to comprehensive contract databases. While this specific contract represents a significant award of $269 million, understanding the contractor's broader engagement with the DoD is crucial. This would involve examining the number, type, and value of all contracts awarded to AAI/Engineering Support Inc. over several fiscal years. A high volume of similar contracts could indicate a strong, established relationship and proven performance, whereas sporadic or vastly different contract types might suggest a more opportunistic or specialized role. Without this broader historical data, it's difficult to definitively assess the contractor's track record beyond this single large award.

How does the per-unit cost of the aircraft parts compare to industry benchmarks?

Determining the precise per-unit cost comparison for this contract is challenging without access to the specific itemized pricing within the contract. The provided data indicates a total award value and contract type (firm-fixed-price), but not the granular details of individual part costs. To perform a robust benchmark, one would need to identify the specific aircraft parts covered, their quantities, and the negotiated prices. This information would then be compared against publicly available industry pricing data, quotes from other potential suppliers, or historical pricing for similar components. Given the nature of specialized defense contracting, prices can vary significantly based on customization, volume, and lead times, making direct comparisons complex.

What are the key performance indicators (KPIs) used to evaluate AAI/Engineering Support Inc.'s performance on this contract?

Key Performance Indicators (KPIs) for a contract of this nature, involving the manufacturing and supply of aircraft parts, typically revolve around delivery timeliness, quality control, and adherence to specifications. Specific KPIs might include on-time delivery rates, defect rates (e.g., parts per million defective), compliance with technical data packages, and responsiveness to any required modifications or engineering changes. The contract's firm-fixed-price structure incentivizes the contractor to meet these KPIs efficiently to maintain profitability. Performance evaluations would likely be conducted periodically by the contracting officer's representative (COR) or the Defense Contract Management Agency (DCMA), with formal reviews documented throughout the contract's extended duration.

What is the potential impact of this contract on the broader aerospace supply chain?

This $269 million contract for aircraft parts manufacturing has a notable impact on the aerospace supply chain, particularly within its niche. By securing a large, long-term supply agreement, the Department of Defense ensures a stable source for critical components, which can reduce uncertainty for military readiness planning. For the contractor, AAI/Engineering Support Inc., this award likely signifies a substantial revenue stream, potentially enabling investments in production capacity, workforce development, and technology upgrades. It also influences upstream suppliers who provide raw materials or sub-components to AAI/Engineering Support Inc. The 'full and open competition' aspect, even with a single award, suggests a competitive market landscape that encourages efficiency and innovation among potential suppliers.

Are there any identified risks associated with relying on a single contractor for these aircraft parts?

Yes, there are inherent risks associated with relying on a single contractor, even one awarded through full and open competition. The primary risk is supply chain disruption; if AAI/Engineering Support Inc. faces production issues, financial instability, or other operational challenges, the DoD's supply of critical aircraft parts could be severely impacted. This could lead to aircraft downtime, mission delays, and increased costs if alternative sources must be rapidly developed. Another risk is potential complacency or reduced incentive for innovation from the sole provider over the long contract term, although the firm-fixed-price structure mitigates some cost-related risks. Mitigation strategies might include maintaining strategic inventory levels, developing contingency plans for alternative sourcing, and robust contract oversight.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 318 CLUBHOUSE ROAD, HUNT VALLEY, MD, 21031

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $269,443,470

Exercised Options: $269,443,470

Current Obligation: $269,443,470

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365701D2070

IDV Type: IDC

Timeline