DoD's $29.4M rotary wing airlift contract awarded to Erickson Helicopters shows fair value with 78% of benchmark

Contract Overview

Contract Amount: $29,377,735 ($29.4M)

Contractor: Erickson Helicopters, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-11-23

End Date: 2012-11-30

Contract Duration: 373 days

Daily Burn Rate: $78.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: AFGHANISTAN ROTARY WING AIRLIFT SUPPORT

Plain-Language Summary

Department of Defense obligated $29.4 million to ERICKSON HELICOPTERS, INC. for work described as: AFGHANISTAN ROTARY WING AIRLIFT SUPPORT Key points: 1. Contract awarded to Erickson Helicopters, Inc. for rotary wing airlift support. 2. The contract was awarded under full and open competition. 3. The contract duration was 373 days. 4. The contract type was Firm Fixed Price. 5. The award value was $29,377,734.56. 6. The contract was awarded by the Department of Defense, USTRANSCOM. 7. The North American Industry Classification System (NAICS) code is 481211. 8. The Product Service Code (PSC) is not specified.

Value Assessment

Rating: good

The contract's award value of $29,377,734.56 appears to be a good value, coming in at 78% of the benchmarked amount of $37,876,100. This suggests that the competitive bidding process likely resulted in favorable pricing for the government. Compared to similar contracts for airlift services, this pricing is within a reasonable range, indicating effective price negotiation and market awareness by the contracting agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit bids. The presence of 4 bids indicates a healthy level of competition for this requirement. This broad competition is generally expected to drive down prices and ensure the government receives the best possible value for its investment in airlift services.

Taxpayer Impact: The full and open competition with multiple bidders suggests that taxpayer funds were used efficiently, as the pricing was likely driven down by market forces. This approach maximizes the opportunity for cost savings compared to less competitive procurement methods.

Public Impact

The primary beneficiaries of this contract are the Department of Defense and its personnel, who receive essential rotary wing airlift support. The services delivered include nonscheduled chartered passenger air transportation, crucial for logistical and operational needs. The geographic impact is likely focused on areas requiring specialized air support, potentially including austere or remote locations. Workforce implications include support for pilots, maintenance crews, and logistical personnel associated with Erickson Helicopters, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of 373 days may be insufficient for long-term strategic airlift planning.
Reliance on a single contractor, Erickson Helicopters, Inc., could pose a risk if performance issues arise.
The specific nature of 'nonscheduled chartered passenger air transportation' might indicate a reactive rather than proactive support model.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
The contract was awarded at 78% of the benchmarked value, indicating strong price performance.
Firm Fixed Price contract type provides cost certainty for the government.

Sector Analysis

This contract falls within the Air Transportation Services sector, specifically focusing on nonscheduled chartered passenger air transportation. The market for such services is driven by demand from government agencies requiring flexible and specialized aerial support. Comparable spending benchmarks in this sector vary widely based on aircraft type, duration, and operational complexity, but the pricing achieved here appears competitive.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no information provided regarding subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal unless Erickson Helicopters, Inc. utilizes small businesses for subcontracted services, which is not specified.

Oversight & Accountability

Oversight for this contract would typically be managed by the USTRANSCOM contracting office within the Department of Defense. Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver services at the agreed-upon price. Transparency is facilitated through contract award databases, though specific performance metrics and oversight reports are not detailed in the provided data.

Related Government Programs

Military Airlift Command
Air Mobility Command
Rotary Wing Aircraft Services
Chartered Air Transportation

Risk Flags

Potential for service gaps if follow-on contract is not awarded timely.
Contractor performance risk, though mitigated by FFP and competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.4 million to ERICKSON HELICOPTERS, INC.. AFGHANISTAN ROTARY WING AIRLIFT SUPPORT

Who is the contractor on this award?

The obligated recipient is ERICKSON HELICOPTERS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $29.4 million.

What is the period of performance?

Start: 2011-11-23. End: 2012-11-30.

What is the track record of Erickson Helicopters, Inc. with government contracts, particularly for airlift services?

Erickson Helicopters, Inc. has a history of providing aviation services, including heavy-lift helicopter operations, to various government entities. Their experience often involves supporting military operations, disaster relief, and construction projects in challenging environments. While specific performance details for this particular contract are not provided, their general track record suggests capability in specialized aviation support. A deeper dive into past performance reviews, any past performance issues, and the volume of their government contracts would offer a more comprehensive understanding of their reliability and effectiveness as a contractor.

How does the benchmarked value of $37,876,100 compare to other similar airlift contracts awarded by the DoD?

The benchmarked value of $37,876,100 serves as a reference point for assessing the fairness of the awarded price. Without access to a broader database of comparable contracts, it's challenging to definitively state how this benchmark compares to other similar airlift contracts. However, the fact that the contract was awarded at 78% of this benchmark ($29,377,734.56) suggests that the negotiated price was favorable. Generally, airlift contracts can vary significantly in cost based on aircraft type, mission duration, operational complexity, and geographic location. A comprehensive comparison would require analyzing contracts with similar aircraft capabilities, flight hours, and operational theaters.

What are the primary risks associated with a Firm Fixed Price contract for nonscheduled chartered passenger air transportation?

A Firm Fixed Price (FFP) contract for nonscheduled chartered passenger air transportation aims to provide cost certainty for the government. However, risks can still emerge. For the contractor, underestimating operational costs, such as fuel, maintenance, or crew availability, could lead to reduced profit margins or even losses, potentially impacting their ability or willingness to perform. For the government, the primary risk is that the fixed price might not adequately account for unforeseen circumstances that increase the contractor's costs, potentially leading to requests for modification or, in extreme cases, contract termination if the contractor cannot fulfill obligations. Additionally, the 'nonscheduled' nature implies flexibility but also potential for less predictable demand, which could strain resources if not managed effectively by both parties.

How effective is full and open competition in ensuring value for money for specialized airlift services like this?

Full and open competition is generally considered the most effective method for ensuring value for money, especially for specialized services like airlift. By allowing all qualified vendors to bid, the government maximizes the pool of potential suppliers, fostering a competitive environment. This competition incentivizes bidders to offer their most competitive pricing and best technical solutions to win the contract. In this case, with 4 bids received and an award at 78% of the benchmark, it suggests that the competitive process was successful in achieving favorable pricing. However, the effectiveness also depends on the clarity of the solicitation requirements and the government's ability to evaluate proposals accurately.

What are the potential implications of the contract's end date (November 30, 2012) on ongoing airlift needs?

The contract's end date of November 30, 2012, indicates a finite period of performance for the specified airlift services. If the need for these services extends beyond this date, the Department of Defense would need to initiate a new procurement process or potentially award a follow-on contract. This transition period carries inherent risks, including potential gaps in service, the need for emergency procurement actions, or the possibility of paying higher prices if a new contract is awarded under less competitive conditions or with increased urgency. Planning for continuity of essential services requires timely initiation of follow-on contract actions well in advance of the current contract's expiration.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Passenger Air Transportation

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HTC71108R0020

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Erickson Incorporated (UEI: 076414135)

Address: 3850 THREE MILE LN, MCMINNVILLE, OR, 06

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business

Financial Breakdown

Contract Ceiling: $29,377,735

Exercised Options: $29,377,735

Current Obligation: $29,377,735

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71109D0023

IDV Type: IDC

Timeline