DoD awards $197.8M contract for air freight services to American Auto Logistics, LP

Contract Overview

Contract Amount: $197,850,021 ($197.9M)

Contractor: American Auto Logistics, LP

Awarding Agency: Department of Defense

Start Date: 2007-11-01

End Date: 2008-10-31

Contract Duration: 365 days

Daily Burn Rate: $542.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: OPTION YEAR 3

Place of Performance

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

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $197.9 million to AMERICAN AUTO LOGISTICS, LP for work described as: OPTION YEAR 3 Key points: 1. Contract value represents significant investment in logistical support. 2. Competition dynamics suggest a potentially competitive bidding process. 3. Fixed-price contract type may offer cost certainty for the government. 4. Contract duration of one year indicates a need for ongoing services. 5. Geographic focus on New Jersey suggests regional operational importance. 6. This award falls within the broader category of transportation and logistics services.

Value Assessment

Rating: fair

The contract value of $197.8 million for scheduled freight air transportation is substantial. Benchmarking this against similar large-scale logistics contracts is challenging without more specific service details. However, the firm fixed-price structure suggests an attempt to control costs, but the overall value-for-money assessment depends heavily on the efficiency and effectiveness of the services provided by American Auto Logistics, LP.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. With 3 bidders identified, the level of competition appears moderate. This suggests that the government sought a broad range of offers, and the pricing should reflect a degree of market competitiveness, though the specific number of bids can influence price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging competitive pricing and potentially leading to better service quality. A moderate number of bidders can help ensure that the government secures a fair market price.

Public Impact

The Department of Defense benefits from reliable air freight transportation services. This contract supports the movement of goods and materials essential for military operations. Services are likely to have a national impact, facilitating logistical chains. The contract supports jobs within the air transportation and logistics sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if fixed price does not account for unforeseen market fluctuations.
Dependence on a single contractor for critical air freight services could pose a risk.
Ensuring consistent service quality and performance over the contract term requires robust oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract type provides cost certainty for the government.
Contractor has secured a significant award, indicating a level of established capability.

Sector Analysis

This contract falls within the broader transportation and logistics sector, specifically focusing on air freight. The market for government air cargo services is substantial, driven by the logistical needs of various federal agencies, particularly the Department of Defense. Competition in this space often involves established carriers with significant infrastructure and operational capacity. Comparable spending benchmarks would typically be found within USTRANSCOM's overall budget for airlift and freight services.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, and the contractor, AMERICAN AUTO LOGISTICS, LP, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this data. The impact on the small business ecosystem would depend on whether American Auto Logistics, LP engages them as subcontractors for specialized services.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Department of Defense's contracting officers and the USTRANSCOM. Accountability measures are typically embedded within the contract's performance work statement and delivery terms. Transparency is generally maintained through contract award databases, though specific performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Air Cargo Services
Freight Transportation Contracts
USTRANSCOM Logistics Support
Department of Defense Procurement

Risk Flags

Contract Value
Contractor Performance
Market Competition
Service Reliability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $197.9 million to AMERICAN AUTO LOGISTICS, LP. OPTION YEAR 3

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 $197.9 million.

What is the period of performance?

Start: 2007-11-01. End: 2008-10-31.

What is the historical spending pattern for scheduled freight air transportation by USTRANSCOM?

Analyzing historical spending for scheduled freight air transportation by USTRANSCOM requires access to detailed procurement data over multiple fiscal years. Generally, USTRANSCOM's spending in this area fluctuates based on operational tempo, global deployments, and the specific needs for moving personnel and equipment. Factors such as the type of cargo, urgency, and destination heavily influence cost. Without specific historical data for this contract vehicle or similar ones, it's difficult to establish a precise trend. However, it's reasonable to assume that spending in this category is significant and subject to market dynamics and government budget allocations. Past awards and contract renewals would provide a clearer picture of consistent or variable investment in these services.

How does the per-unit cost of this contract compare to industry benchmarks for air freight?

Determining the per-unit cost for this contract and comparing it to industry benchmarks is challenging without knowing the specific units of service (e.g., cost per ton-mile, cost per shipment, cost per cubic foot). The total award of $197.8 million over one year for scheduled freight air transportation is substantial. Industry benchmarks for air freight vary widely based on factors like cargo type, speed of delivery, origin, destination, and fuel surcharges. For instance, general cargo rates can differ significantly from specialized or time-sensitive military cargo. A firm fixed-price contract aims to establish a set rate, but its competitiveness against market rates depends on the negotiation and the number of bidders. A detailed analysis would require breaking down the contract's total value into specific service units and comparing those rates to published industry indices or rates secured by other government agencies for similar services.

What is American Auto Logistics, LP's track record with government contracts, particularly in air freight?

American Auto Logistics, LP has a history of securing government contracts, including those related to transportation and logistics. Their involvement in this $197.8 million award for scheduled freight air transportation from the Department of Defense (USTRANSCOM) indicates a significant capability and established relationship with federal agencies. To assess their track record thoroughly, one would examine past performance evaluations, contract history databases (like SAM.gov or FPDS), and any reported issues or successes on previous awards. Their ability to win a large, competitively bid contract suggests they meet the necessary qualifications and performance standards. Further investigation into their specific experience with air cargo, rather than just general logistics or ground transportation, would provide a more precise understanding of their expertise in this domain.

What are the potential risks associated with this firm fixed-price contract for air freight?

While firm fixed-price (FFP) contracts offer cost certainty to the government, they also carry risks, primarily for the contractor. For this $197.8 million air freight contract, potential risks include unforeseen increases in fuel costs, labor shortages, or disruptions in air traffic control or airport operations, which could significantly impact the contractor's profit margins if not adequately accounted for in their bid. If the contractor underestimated these variables, they might face financial strain, potentially leading to performance issues or requests for contract modifications. Conversely, the government risks paying a premium if the contractor's bid was overly conservative to cover these risks. Robust contract management and monitoring are crucial to ensure the contractor remains financially viable and performs as expected.

How does this contract align with USTRANSCOM's overall mission and strategic objectives?

This contract for scheduled freight air transportation directly aligns with USTRANSCOM's core mission of providing global mobility support to the Department of Defense. USTRANSCOM is responsible for the worldwide movement of personnel, equipment, and supplies, and air freight is a critical component of rapid deployment and sustainment operations. The $197.8 million award signifies a substantial investment in ensuring the timely and efficient delivery of goods via air, which is essential for maintaining military readiness, supporting contingency operations, and projecting power. The contract's focus on scheduled freight suggests a need for predictable and routine logistical support, complementing other modes of transportation and enabling strategic planning for supply chains.

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: $197,850,021

Exercised Options: $197,850,021

Current Obligation: $197,850,021

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAMT0103D0184

IDV Type: IDC

Timeline