Naval Aviation Support Contract Awarded to Maritime Helicopter Support Company LLC for $28.7 Million

Contract Overview

Contract Amount: $28,725,538 ($28.7M)

Contractor: Maritime Helicopter Support Company LLC

Awarding Agency: Department of Defense

Start Date: 2009-07-28

End Date: 2015-02-11

Contract Duration: 2,024 days

Daily Burn Rate: $14.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: H60 PBL- NAVAL AVIATION

Place of Performance

Location: WOODBRIDGE, PRINCE WILLIAM County, VIRGINIA, 22192, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $28.7 million to MARITIME HELICOPTER SUPPORT COMPANY LLC for work described as: H60 PBL- NAVAL AVIATION Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns. 2. Limited competition may have resulted in a higher cost than a fully competed contract. 3. The contract duration of nearly six years suggests a significant, long-term commitment. 4. Fixed-price contract type aims to transfer some risk to the contractor. 5. The specific services provided under this contract are not detailed, impacting performance assessment. 6. The absence of small business participation raises concerns about broader economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of detailed service descriptions and the sole-source nature of the award. Without comparable contracts or a competitive bidding process, it is difficult to definitively assess if the $28.7 million represents a fair market price. The fixed-price structure offers some cost control, but the absence of competition limits the government's ability to negotiate the best possible terms.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits the opportunity for price discovery and negotiation. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities), the lack of competition here means the government did not benefit from multiple offers, potentially leading to a less favorable price.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the contractor faced no direct rivals for this award.

Public Impact

The primary beneficiary is the Department of the Navy, receiving support services for its aviation assets. The contract likely supports the operational readiness and maintenance of naval helicopters. The geographic impact is concentrated within the naval aviation infrastructure, potentially across multiple bases. Workforce implications may include direct employment by the contractor and indirect support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency regarding specific services makes performance and value assessment difficult.
No indication of small business participation or subcontracting opportunities.
Long contract duration without clear performance metrics raises concerns about ongoing value.
The specific nature of 'PBL' (Performance-Based Logistics) support is not detailed, hindering analysis.

Positive Signals

Fixed-price contract type helps to cap costs and transfer some financial risk to the contractor.
The contract duration suggests a stable, long-term support solution for critical naval assets.
The award to a single entity may indicate specialized expertise required for naval aviation support.

Sector Analysis

This contract falls within the broader defense sector, specifically supporting naval aviation maintenance and logistics. The market for such specialized support services is often characterized by a limited number of highly qualified contractors. While specific benchmarks for this niche are not readily available, defense contracts of this magnitude typically involve complex supply chains and technical expertise. The $28.7 million award is a significant investment in maintaining critical military assets.

Small Business Impact

There is no indication that this contract included a small business set-aside. Furthermore, the 'sb' field is marked as false, suggesting no explicit requirement for small business participation. This means that small businesses were likely not prioritized in the award process, and there is no information on subcontracting opportunities for them. The absence of small business involvement could limit the broader economic benefits and opportunities within the defense contracting ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the terms of the firm-fixed-price contract, focusing on delivery and adherence to specifications. Transparency is limited due to the sole-source nature and the lack of detailed public information on the services rendered. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Aviation Maintenance Programs
Defense Logistics Support Contracts
Helicopter Component Support Services
Performance-Based Logistics (PBL) Contracts

Risk Flags

Sole-source award
Potential for inflated pricing
Lack of transparency in service details
Misclassified NAICS code

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.7 million to MARITIME HELICOPTER SUPPORT COMPANY LLC. H60 PBL- NAVAL AVIATION

Who is the contractor on this award?

The obligated recipient is MARITIME HELICOPTER SUPPORT COMPANY LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $28.7 million.

What is the period of performance?

Start: 2009-07-28. End: 2015-02-11.

What specific services does 'H60 PBL - NAVAL AVIATION' entail, and how do they contribute to the operational readiness of naval helicopters?

The data provided indicates 'H60 PBL - NAVAL AVIATION' refers to Performance-Based Logistics (PBL) support for the H-60 series naval helicopters. PBL contracts focus on achieving specific performance outcomes rather than simply purchasing parts or services. For naval aviation, this likely involves ensuring the availability, reliability, and maintainability of critical components and systems for the H-60 fleet. Services could include component repair, overhaul, spare parts provisioning, technical support, and data analysis to predict and prevent failures. The ultimate goal is to enhance the operational readiness and reduce the total ownership cost of these vital aircraft by ensuring they are mission-capable when needed.

Given the sole-source nature of this award, what is the estimated cost premium compared to a potentially competed contract?

Estimating the precise cost premium for a sole-source contract is inherently difficult without a competitive bidding process to establish a market baseline. However, economic theory and empirical studies suggest that sole-source awards often result in higher prices compared to fully competed contracts. This is due to the lack of competitive pressure, which reduces incentives for the contractor to offer the lowest possible price. While the firm-fixed-price structure provides some cost certainty, the absence of multiple bids means the government likely did not benefit from the most advantageous pricing achievable in a competitive market. A rough estimate for such premiums can range significantly, but it's not uncommon for sole-source contracts to be 10-30% higher than their competitive counterparts, depending on the market and the specific service.

What are the key risks associated with a sole-source, firm-fixed-price contract for naval aviation support?

A sole-source, firm-fixed-price contract for naval aviation support presents several key risks. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated prices and reduced value for money. The government lacks the leverage that multiple bidders would provide. Secondly, while firm-fixed-price aims to cap costs, if the contractor's costs escalate unexpectedly due to unforeseen technical challenges or market fluctuations, they may seek contract modifications or claim inefficiencies, potentially negating the fixed-price benefit. Thirdly, without clear performance metrics tied to the PBL, ensuring the contractor is delivering optimal support and value can be challenging. Finally, reliance on a single provider can create long-term dependency and limit flexibility if the contractor's performance or business viability changes.

How does the duration of this contract (2009-2015) align with typical support cycles for naval aviation assets?

The contract duration of approximately six years (July 2009 to February 2015) is relatively standard for complex support services in the defense sector, particularly for Performance-Based Logistics (PBL) arrangements. Naval aviation assets, like the H-60 helicopters, have long service lives, often spanning decades. Consequently, long-term support contracts are necessary to ensure sustained readiness and maintainability throughout the aircraft's operational life. A duration of several years allows the contractor to make necessary investments in infrastructure, personnel, and specialized equipment, while providing the government with a stable support solution. Shorter contracts might not provide sufficient incentive for such investments or could lead to frequent re-competition, disrupting supply chains and support continuity.

What does the 'Office Machinery Manufacturing' (NAICS 333313) code signify in the context of this naval aviation support contract?

The assignment of NAICS code 333313, 'Office Machinery Manufacturing,' to this naval aviation support contract appears to be a misclassification or an error in the provided data. This code typically covers establishments primarily engaged in manufacturing office machinery, such as computers, printers, and related equipment. It does not align with the nature of helicopter support, maintenance, or logistics services, which would more appropriately fall under categories related to aerospace product and parts manufacturing (e.g., 336411, 336412, 336413) or repair and maintenance services (e.g., 811310). This discrepancy highlights a potential issue with data accuracy and categorization within the federal procurement system, making it difficult to accurately assess the contract's scope based solely on the NAICS code.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Office Machinery Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2510 HUNTER PL STE 201 & 202, WOODBRIDGE, VA, 22192

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,725,538

Exercised Options: $28,725,538

Current Obligation: $28,725,538

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0038309D010F

IDV Type: IDC

Timeline