DoD awards $185M for air freight, with American Auto Logistics securing the largest portion

Contract Overview

Contract Amount: $185,034,706 ($185.0M)

Contractor: American Auto Logistics, LP

Awarding Agency: Department of Defense

Start Date: 2006-11-01

End Date: 2007-10-31

Contract Duration: 364 days

Daily Burn Rate: $508.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: OPTION YEAR 2

Place of Performance

Location: PARK RIDGE, BERGEN County, NEW JERSEY, 07656

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $185.0 million to AMERICAN AUTO LOGISTICS, LP for work described as: OPTION YEAR 2 Key points: 1. Value for money appears fair given the firm fixed-price nature of the contract, though detailed cost breakdowns are not publicly available. 2. Competition dynamics indicate a full and open process, suggesting a competitive market for scheduled freight air transportation. 3. Risk indicators are moderate, with a firm fixed-price contract generally transferring cost risk to the contractor. 4. Performance context is established through a multi-year contract, implying a need for consistent and reliable service. 5. Sector positioning places this contract within the broader logistics and transportation services for the Department of Defense.

Value Assessment

Rating: fair

The contract's value of $185 million over its base and option periods needs to be benchmarked against similar Department of Defense air freight contracts. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the price is competitive. However, without access to detailed cost proposals or comparisons with other bids, a definitive assessment of 'excellent' value is challenging.

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. The presence of 3 bidders suggests a reasonable level of competition for this service. A competitive bidding process generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are likely being used efficiently by leveraging market forces to secure the best possible price for scheduled freight air transportation.

Public Impact

The Department of Defense benefits from reliable and scheduled air transportation services for its freight needs. This contract supports the movement of goods and equipment critical to military operations. The geographic impact is national, with potential international reach depending on the specific freight routes utilized. Workforce implications include employment opportunities within the air cargo and logistics sectors, particularly for American Auto Logistics and its partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future option years if not carefully managed.
Dependence on a single contractor for a significant portion of air freight services could pose a risk if performance issues arise.

Positive Signals

Firm fixed-price contract structure mitigates cost escalation risk for the government.
Full and open competition suggests a healthy market and competitive pricing.
Long-term contract provides stability and predictability for essential transportation services.

Sector Analysis

This contract falls within the broader transportation and logistics sector, specifically focusing on air freight services. The market for government air cargo is substantial, driven by the logistical needs of agencies like the Department of Defense. Comparable spending benchmarks would involve analyzing other large-scale air cargo contracts awarded by federal agencies, considering factors like volume, distance, and type of cargo.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, and the prime contractor, American Auto Logistics, LP, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award. Further analysis would be needed to determine if small business participation is mandated or encouraged through subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Transportation Command (USTRANSCOM) and the contracting officer at the Department of Defense. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to meet performance standards. Transparency is generally limited for specific contract details beyond what is publicly reported through contract databases.

Related Government Programs

Military Sealift Command Contracts
Air Mobility Command Contracts
Department of Defense Freight Transportation Services
General Services Administration (GSA) Schedule Contracts for Transportation

Risk Flags

Potential for performance issues impacting delivery schedules.
Reliance on a single contractor for critical transportation services.
Lack of detailed cost transparency for value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $185.0 million to AMERICAN AUTO LOGISTICS, LP. OPTION YEAR 2

Who is the contractor on this award?

The obligated recipient is AMERICAN AUTO LOGISTICS, LP.

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $185.0 million.

What is the period of performance?

Start: 2006-11-01. End: 2007-10-31.

What is the historical spending pattern for scheduled freight air transportation by the Department of Defense over the last five years?

Analyzing historical spending for scheduled freight air transportation by the Department of Defense over the last five years reveals a consistent reliance on these services to support global operations. While specific figures fluctuate based on geopolitical events and operational tempo, the overall trend indicates a significant and sustained investment in air cargo capabilities. This contract, valued at approximately $185 million, represents a substantial portion of annual spending in this category. Factors influencing spending include the need for rapid deployment of personnel and equipment, humanitarian aid missions, and routine logistical support. Benchmarking this award against previous years' spending would provide context on whether current investment levels are increasing, decreasing, or remaining stable relative to demand and market prices.

How does the per-unit cost of this contract compare to similar air freight services procured by other federal agencies?

A direct comparison of per-unit costs for this contract against similar air freight services procured by other federal agencies is challenging without access to detailed pricing breakdowns and specific service parameters (e.g., weight, volume, distance, speed). However, the firm fixed-price nature of this award suggests that American Auto Logistics, LP, has factored in anticipated costs and profit margins. To conduct a robust comparison, one would need to identify contracts with comparable routes, cargo types, and delivery timelines. Benchmarking would involve calculating cost per pound-mile or cost per shipment for this contract and comparing it to publicly available data from other agencies' solicitations and awards. Variations in pricing can be attributed to market conditions, competition levels, and specific service requirements.

What is the track record of American Auto Logistics, LP, in performing large federal transportation contracts?

American Auto Logistics, LP, has a history of performing federal transportation contracts, including those with the Department of Defense. Their involvement in significant awards like this $185 million contract for scheduled freight air transportation indicates a capacity to manage large-scale logistical operations. A review of their contract history would reveal their performance ratings on previous awards, any instances of contract disputes or terminations, and their ability to meet delivery schedules and service requirements. Examining past performance data, such as contract close-out reports and contractor performance assessment reporting (CPARS), is crucial for evaluating their reliability and effectiveness in fulfilling government needs.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

The primary risks associated with this contract include potential performance failures by the contractor, such as missed delivery deadlines or damage to cargo, and unforeseen cost increases that could impact the contractor's profitability under the firm fixed-price structure. Additionally, reliance on a single primary awardee for a significant volume of air freight could pose a risk if the contractor experiences operational disruptions. Mitigation strategies are inherent in the contract's structure: the firm fixed-price arrangement transfers cost risk to the contractor, incentivizing efficient operations. Performance standards and reporting requirements provide oversight, and the government has recourse for non-performance. The competitive nature of the initial award also suggests a baseline level of contractor capability.

How does the level of competition (3 bidders) for this contract influence the government's ability to secure favorable pricing?

A competition involving three bidders for this scheduled freight air transportation contract generally provides a reasonable level of price discovery for the government. While more bidders could potentially drive prices lower, three offers indicate that the market is sufficiently competitive to attract multiple interested parties. This level of competition suggests that American Auto Logistics, LP, likely submitted a competitive bid to win the award. The government's ability to secure favorable pricing is enhanced by the transparency of the bidding process and the clear statement of work, allowing bidders to accurately price their services. However, the ultimate 'favorability' of the price depends on benchmarking against market rates and historical data.

Industry Classification

NAICS: Transportation and Warehousing › Scheduled Air Transportation › Scheduled Freight Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 85 CHESTNUT RIDGE RD, MONTVALE, NJ, 05

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $185,034,706

Exercised Options: $185,034,706

Current Obligation: $185,034,706

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAMT0103D0184

IDV Type: IDC

Timeline