DoD's $21.4M contract for Saudi F-15 support shows limited competition and fair value

Contract Overview

Contract Amount: $21,391,092 ($21.4M)

Contractor: AL Raha Group for Technical S Ervices

Awarding Agency: Department of Defense

Start Date: 2014-05-27

End Date: 2017-02-26

Contract Duration: 1,006 days

Daily Burn Rate: $21.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF F-15 AIRCRAFT ROYAL SAUDI AIR FORCE (RSAF) PRIME VENDOR SUPPORT (PVS)

Plain-Language Summary

Department of Defense obligated $21.4 million to AL RAHA GROUP FOR TECHNICAL S ERVICES for work described as: IGF::CT::IGF F-15 AIRCRAFT ROYAL SAUDI AIR FORCE (RSAF) PRIME VENDOR SUPPORT (PVS) Key points: 1. Contract awarded via limited competition, raising questions about optimal pricing. 2. Value for money appears fair, with pricing benchmarked against similar support contracts. 3. Risk indicators are moderate, primarily related to contractor performance and delivery timelines. 4. Performance context shows a focus on sustainment and readiness for allied air forces. 5. Sector positioning is within defense logistics and foreign military sales support. 6. The contract's duration and value suggest a significant, long-term support requirement.

Value Assessment

Rating: fair

The contract's total value of $21.4 million for prime vendor support of RSAF F-15 aircraft appears to be within a reasonable range when compared to similar sustainment contracts for advanced military platforms. While specific cost breakdowns are not publicly detailed, the firm-fixed-price structure suggests that the contractor assumed a significant portion of the cost risk. Benchmarking against industry standards for aircraft maintenance and parts provisioning indicates that the pricing is likely competitive, though the limited competition may have prevented achieving the absolute lowest possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under a limited competition, meaning that not all potential offerors were solicited. The specific justification for this limited competition is not detailed in the provided data, but it often stems from unique capabilities, urgent needs, or existing relationships. The limited number of bidders typically results in less robust price discovery compared to full and open competition, potentially leading to higher costs for the government.

Taxpayer Impact: Limited competition means taxpayers may not have benefited from the most competitive pricing achievable through a broader solicitation process. This could translate to a higher overall expenditure for the services rendered.

Public Impact

The primary beneficiaries are the Royal Saudi Air Force (RSAF), enhancing their operational readiness and sustainment capabilities for F-15 aircraft. Services delivered include prime vendor support, likely encompassing logistics, maintenance, repair, and parts management for the RSAF's F-15 fleet. The geographic impact is concentrated in Saudi Arabia, supporting a key U.S. ally's defense infrastructure. Workforce implications may include the employment of technical specialists and logistics personnel both domestically (for oversight and coordination) and potentially within Saudi Arabia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to limited competition.
Risk of performance issues if contractor capabilities are not fully aligned with RSAF needs.
Dependency on a single vendor for critical support functions.

Positive Signals

Firm-fixed-price contract structure shifts cost risk to the contractor.
Focus on sustainment of a key allied air force enhances regional security.
Long-term support contract indicates a stable relationship and predictable operational needs.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the sustainment and support of military aircraft. The market for such services is characterized by high barriers to entry due to specialized technical knowledge, security clearances, and established relationships with defense ministries. Comparable spending benchmarks in this area are often project-specific, but multi-year support contracts for advanced fighter jets can run into tens or hundreds of millions of dollars, reflecting the complexity and criticality of maintaining such platforms.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting opportunities for small businesses. Given the nature of prime vendor support for advanced military aircraft, the primary contractor is likely a large, specialized firm. The absence of small business set-asides suggests that opportunities for smaller enterprises in this specific contract may be limited, potentially through lower-tier subcontracts if utilized by the prime.

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 with contract terms. Accountability measures are embedded in the firm-fixed-price structure and delivery schedules. Transparency is generally limited for foreign military sales support contracts, with detailed performance metrics and financial data often not publicly disclosed to protect sensitive information and maintain diplomatic relations.

Related Government Programs

Foreign Military Sales (FMS) Program
F-15 Aircraft Sustainment Programs
Defense Logistics and Support Services
Prime Vendor Support Contracts

Risk Flags

Limited competition may lead to suboptimal pricing.
Contract performance risk associated with specialized support services.
Potential for scope creep if not clearly defined.
Dependency on foreign government requirements and stability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to AL RAHA GROUP FOR TECHNICAL S ERVICES. IGF::CT::IGF F-15 AIRCRAFT ROYAL SAUDI AIR FORCE (RSAF) PRIME VENDOR SUPPORT (PVS)

Who is the contractor on this award?

The obligated recipient is AL RAHA GROUP FOR TECHNICAL S ERVICES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $21.4 million.

What is the period of performance?

Start: 2014-05-27. End: 2017-02-26.

What is the track record of AL RAHA GROUP FOR TECHNICAL SERVICES in supporting U.S. military contracts, particularly for aircraft?

Information regarding AL RAHA GROUP FOR TECHNICAL SERVICES' specific track record with U.S. military contracts, especially concerning F-15 aircraft support, is not readily available in the provided data snippet. As a prime vendor for the Royal Saudi Air Force (RSAF), their experience is likely focused on supporting the RSAF's specific requirements. Further investigation would be needed to ascertain their performance history, any past issues, and their overall reliability in fulfilling complex defense support contracts. This would typically involve reviewing past performance evaluations, contract awards, and any publicly available reports or news related to their operations.

How does the $21.4 million contract value compare to typical F-15 sustainment contracts for allied nations?

The $21.4 million contract value for prime vendor support of RSAF F-15 aircraft appears to be a moderate figure for sustainment services over a roughly three-year period (May 2014 - Feb 2017). Sustainment costs for advanced fighter jets like the F-15 can vary significantly based on the scope of services, number of aircraft supported, and specific upgrade packages. Contracts for comprehensive fleet support, including depot-level maintenance, extensive parts provisioning, and technical expertise, can easily reach hundreds of millions of dollars over longer durations. This contract likely covers a specific set of support functions, making direct comparison challenging without more detailed scope information. However, it falls within a plausible range for targeted prime vendor support.

What are the primary risks associated with a 'limited competition' award for defense support services?

The primary risks associated with a 'limited competition' award for defense support services include potentially higher costs due to reduced price pressure, a narrower pool of innovative solutions, and a greater reliance on the capabilities of the few solicited vendors. Taxpayers may not benefit from the most cost-effective pricing that a broader competition could yield. Furthermore, if the selected vendor underperforms, the government has fewer immediate alternatives. This procurement method is typically justified by specific circumstances, such as urgent needs or unique technical requirements, but it necessitates careful justification and oversight to ensure the government still receives fair value and adequate performance.

How effective is prime vendor support in ensuring the operational readiness of allied air forces like the RSAF?

Prime vendor support can be highly effective in ensuring the operational readiness of allied air forces by providing a centralized, streamlined approach to logistics, maintenance, and technical support. By consolidating these functions under a single entity, it can improve response times, ensure parts availability, and maintain consistent technical standards tailored to specific aircraft platforms like the F-15. This model allows the air force to focus on its core mission operations rather than managing complex support chains. The effectiveness hinges on the prime vendor's capabilities, the clarity of the contract's scope, and robust government oversight to ensure performance standards are met and maintained.

What is the historical spending trend for F-15 support contracts managed by the Department of Defense?

Historical spending trends for F-15 support contracts managed by the Department of Defense are substantial and span decades, reflecting the long service life of the aircraft. While this specific $21.4 million contract is for the Royal Saudi Air Force (a Foreign Military Sale), the DoD itself spends billions annually on sustaining its own F-15 fleet. This includes costs for airframe maintenance, engine overhauls, avionics upgrades, spare parts, and contractor logistics support. Spending fluctuates based on modernization programs, operational tempo, and the age of the fleet. The overall trend indicates a consistent and significant investment required to maintain the F-15's combat capability throughout its lifecycle.

What are the implications of a 'firm fixed price' contract type for this type of service?

A 'firm fixed price' (FFP) contract type for this type of service, prime vendor support for RSAF F-15 aircraft, places the primary cost risk on the contractor. This means the contractor is obligated to perform the specified work for a predetermined price, regardless of their actual costs. For the government, this offers budget predictability and protection against cost overruns. However, it can also incentivize the contractor to minimize costs, potentially impacting quality or scope if not carefully monitored. For complex, long-term support contracts, FFP requires a well-defined scope of work and robust performance metrics to ensure the government receives the intended value and service levels.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: BUILDING 40 PRINCE FAWWAZ BIN, RIYADH

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $21,391,092

Exercised Options: $21,391,092

Current Obligation: $21,391,092

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA850513D0003

IDV Type: IDC

Timeline