DoD spent $127.6M on rotary wing transport in Afghanistan, with Vertical de Aviacion S.A.S. as a key contractor

Contract Overview

Contract Amount: $127,664,623 ($127.7M)

Contractor: Vertical DE Aviacion S a S EN Reorganizacion

Awarding Agency: Department of Defense

Start Date: 2011-08-10

End Date: 2014-10-31

Contract Duration: 1,178 days

Daily Burn Rate: $108.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ROTARY WING MOVEMENT OF PASSENGERS AND CARGO IN AFGHANISTAN.

Plain-Language Summary

Department of Defense obligated $127.7 million to VERTICAL DE AVIACION S A S EN REORGANIZACION for work described as: ROTARY WING MOVEMENT OF PASSENGERS AND CARGO IN AFGHANISTAN. Key points: 1. The contract focused on essential rotary wing movement of passengers and cargo, a critical function in the Afghanistan theater. 2. Competition was robust, with 7 bidders vying for this delivery order, suggesting a dynamic marketplace for these services. 3. The contract utilized a Firm Fixed Price (FFP) structure, which typically shifts cost risk to the contractor. 4. Performance spanned over three years, indicating a sustained need for these aviation services. 5. The primary contractor, Vertical de Aviacion S.A.S. en Reorganizacion, was awarded a significant portion of the contract value. 6. The North American Industry Classification System (NAICS) code 481211 points to nonscheduled chartered passenger air transportation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. The total award of $127.6 million over nearly four years suggests a substantial investment in rotary wing transport. However, without comparable contract data for similar operations in comparable theaters, assessing whether this represents excellent value for money is difficult. The firm fixed price nature implies that cost overruns were intended to be borne by the contractor, but the overall efficiency and effectiveness of the services rendered would be the ultimate measure of value.

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 bids. With seven bidders participating, the level of competition appears healthy, which generally promotes competitive pricing and encourages contractors to offer their best value. The agency sought proposals from a wide range of potential providers, suggesting an effort to ensure a fair and transparent procurement process.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among contractors.

Public Impact

The primary beneficiaries of this contract were U.S. military and government personnel requiring transportation of passengers and cargo within Afghanistan. The services delivered were critical for logistical support, troop movement, and the transportation of essential supplies in a challenging operational environment. The geographic impact was concentrated within Afghanistan, supporting military operations and stability efforts in the region. The contract supported the aviation industry and associated personnel, including pilots, mechanics, and support staff, both directly and indirectly.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contractor is in reorganization, which could pose risks to performance continuity and financial stability.
The specific nature of rotary wing movement in a conflict zone presents inherent operational and safety risks.
Lack of detailed performance metrics makes it difficult to fully assess the effectiveness and efficiency of the services provided.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
Firm Fixed Price contract structure shifts cost risk to the contractor.
Contract duration of over three years indicates sustained operational need and potential for established service delivery.

Sector Analysis

This contract falls within the air transportation services sector, specifically nonscheduled chartered passenger air transportation. The market for such services, particularly in support of government and military operations in complex environments, is specialized. While general air cargo and passenger transport markets are vast, contracts requiring rotary wing aircraft for military logistics in theaters like Afghanistan represent a niche segment. Benchmarking would involve comparing rates for similar charter services, adjusted for operational complexity, risk, and geographic location.

Small Business Impact

There is no explicit indication that this contract included small business set-asides. The nature of specialized aviation services, especially those requiring significant capital investment in aircraft and operational expertise for military support, often favors larger, established companies. Subcontracting opportunities for small businesses might exist in areas such as maintenance, ground support, or specialized equipment supply, but the primary contract appears to be with a larger entity.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and operational commands, specifically USTRANSCOM. Accountability measures would be embedded in the contract terms, including performance standards, delivery schedules, and reporting requirements. Transparency is generally facilitated through contract award databases, though detailed operational performance data may be classified or restricted due to security concerns. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Airlift Services
Afghanistan Security Assistance
Rotary Wing Aircraft Operations
Air Charter Services
Logistics Support Contracts

Risk Flags

Contractor financial stability concerns (en reorganizacion)
Operational risks in a conflict zone
Potential for performance issues due to contractor's reorganization status

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $127.7 million to VERTICAL DE AVIACION S A S EN REORGANIZACION. ROTARY WING 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 $127.7 million.

What is the period of performance?

Start: 2011-08-10. End: 2014-10-31.

What is the track record of Vertical de Aviacion S.A.S. en Reorganizacion with government contracts, particularly in high-risk environments?

Information regarding the specific track record of Vertical de Aviacion S.A.S. en Reorganizacion with government contracts, especially in high-risk environments like Afghanistan, is limited in publicly available data. The fact that the company is listed 'en reorganizacion' suggests potential financial or operational challenges that could impact its ability to consistently perform. Further investigation into past performance reviews, any documented issues, or previous contract awards would be necessary to fully assess their track record. Without this detailed history, it is difficult to definitively gauge their reliability and past success in fulfilling similar complex aviation support roles for the government.

How does the per-hour or per-flight cost of this contract compare to similar rotary wing services in other operational theaters?

Directly comparing the per-hour or per-flight cost of this contract to similar services in other operational theaters is challenging without access to the detailed pricing structure and specific operational parameters. Factors such as aircraft type, crew size, maintenance requirements, fuel costs, insurance, and the inherent risks associated with operating in Afghanistan significantly influence pricing. While the total award of $127.6 million over approximately 1178 days (roughly 3.2 years) provides a broad financial scope, it doesn't break down into easily comparable unit costs. Generally, operations in high-threat environments command premium pricing due to increased risk factors and logistical complexities, making direct apples-to-apples comparisons difficult without granular data.

What were the primary risk indicators identified during the procurement process for this contract, and how were they mitigated?

The primary risk indicators for this contract likely revolved around the operational complexities and inherent dangers of providing rotary wing transport in Afghanistan. These would include mission success rates, safety of flight, aircraft availability and maintenance, crew proficiency, and the potential for hostile actions. Additionally, the financial stability and operational capacity of bidding contractors would be assessed. Mitigation strategies would typically involve stringent performance requirements, detailed safety protocols, robust maintenance schedules, experienced personnel qualifications, and potentially security escorts or protective measures. The 'en reorganizacion' status of the selected contractor, Vertical de Aviacion S.A.S., would have been a significant risk indicator that required careful evaluation and potentially specific contractual safeguards or oversight.

How effective was the use of Firm Fixed Price (FFP) in managing costs for this specific rotary wing service contract?

The Firm Fixed Price (FFP) contract type aims to provide cost certainty by shifting the risk of cost overruns to the contractor. For this rotary wing service contract, FFP likely encouraged Vertical de Aviacion S.A.S. to manage its operational expenses efficiently to maintain profitability. However, the effectiveness in managing costs is contingent on the accuracy of the initial cost estimates and the contractor's ability to control expenses throughout the contract period. In a dynamic environment like Afghanistan, unforeseen operational challenges or price fluctuations (e.g., fuel) could still impact the contractor's profitability, potentially leading to performance issues if not managed carefully. Without detailed post-award cost data or performance reviews, it's difficult to definitively state how effectively FFP controlled overall costs versus the value received.

What is the historical spending trend for similar rotary wing air transportation services by the Department of Defense in Afghanistan or similar theaters?

Historical spending on rotary wing air transportation services by the Department of Defense (DoD) in Afghanistan and similar theaters has been substantial over the past two decades, driven by the demands of prolonged military operations. While specific figures for comparable contracts fluctuate based on mission scope, duration, and threat levels, the overall trend indicates a consistent and significant investment in aviation support. Contracts like this one, valued in the tens to hundreds of millions of dollars, were common to ensure logistical capabilities, personnel movement, and casualty evacuation. Analyzing broader DoD spending patterns in the region would reveal a sustained reliance on such services, underscoring their critical role in supporting military objectives.

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: 7

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: $127,664,623

Exercised Options: $127,664,623

Current Obligation: $127,664,623

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71110DR027

IDV Type: IDC

Timeline