Vertex Aerospace LLC awarded $39.4M contract for aircraft manufacturing services by the Department of the Navy

Contract Overview

Contract Amount: $39,358,963 ($39.4M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2009-10-31

End Date: 2010-10-31

Contract Duration: 365 days

Daily Burn Rate: $107.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CLS SERVICES

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $39.4 million to VERTEX AEROSPACE LLC for work described as: CLS SERVICES Key points: 1. Contract awarded under firm-fixed-price terms, indicating predictable costs for the government. 2. The contract duration of 365 days suggests a focused scope of work. 3. Awarded by the Department of the Navy, aligning with defense sector needs. 4. The North American Industry Classification System (NAICS) code 336411 points to aircraft manufacturing. 5. The base contract value of $107,833 appears to be a small portion of the total award, suggesting significant potential for modifications or task orders. 6. The contract was awarded through full and open competition, promoting a competitive bidding process.

Value Assessment

Rating: fair

The total award amount of $39.4 million for aircraft manufacturing services needs further context to assess value for money. The base contract value of $107,833 is very low compared to the total award, which could indicate a contract vehicle with significant potential for modifications or task orders. Without knowing the scope of work for the full award, it's difficult to benchmark against similar contracts. The firm-fixed-price structure is generally favorable for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit a bid. This typically leads to a more robust selection of offers and can drive down prices. The fact that it was competed openly suggests the government sought the best value available in the market for aircraft manufacturing services.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and better pricing for government services.

Public Impact

The primary beneficiaries are likely the Department of the Navy, receiving essential aircraft manufacturing services. The contract supports the maintenance, repair, or production of aircraft, crucial for national defense operations. The geographic impact is centered around the contractor's location in Oklahoma, potentially creating or sustaining local jobs. Workforce implications include employment opportunities for skilled labor in the aerospace and manufacturing sectors within Oklahoma.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The significant difference between the base award and the total award value raises questions about the contract's ultimate cost and scope.
Lack of detailed information on the specific services rendered under the full award amount makes value assessment challenging.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive process.
Firm-fixed-price contract type provides cost certainty for the government.
The contractor, Vertex Aerospace LLC, is established in the aerospace sector.

Sector Analysis

The aerospace manufacturing sector is a critical component of the defense industrial base, characterized by high technological demands and stringent quality requirements. This contract falls within the Aircraft Manufacturing sub-sector (NAICS 336411). Spending in this area is often driven by defense procurement needs, with significant government investment in maintaining and modernizing aircraft fleets. Comparable spending benchmarks would typically involve analyzing other contracts for aircraft modification, repair, or production awarded by military branches.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary focus of this award appears to be on larger, established aerospace manufacturers capable of fulfilling the contract requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Navy. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specific goods or services at an agreed-upon price. Transparency is facilitated by the contract award being publicly available, though detailed performance metrics and specific deliverables may not be fully public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance and Repair Services
Aerospace Component Manufacturing
Defense Logistics Support
Military Aircraft Procurement

Risk Flags

Potential for scope creep due to large difference between base and total award.
Lack of detailed service description hinders value assessment.
Firm-fixed-price risk if contractor underestimates costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.4 million to VERTEX AEROSPACE LLC. CLS SERVICES

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE 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 $39.4 million.

What is the period of performance?

Start: 2009-10-31. End: 2010-10-31.

What specific aircraft manufacturing services were performed under this $39.4 million contract?

The provided data indicates the contract is for 'Aircraft Manufacturing' under NAICS code 336411. However, the specific services rendered under the full $39.4 million award are not detailed. The base award value is only $107,833, suggesting the majority of the contract value likely pertains to options, modifications, or task orders that were exercised or added post-award. These could range from the production of specific aircraft components, assembly, major overhauls, or specialized modifications to existing aircraft. Without access to the contract's statement of work or modification history, the precise nature of the services remains unspecified.

How does the $39.4 million award compare to typical spending for similar aircraft manufacturing contracts by the Department of the Navy?

Benchmarking this $39.4 million award requires comparing it to contracts with similar scopes of work, such as aircraft production, major modification, or extensive repair services, awarded by the Department of the Navy or other military branches. Given the NAICS code 336411 (Aircraft Manufacturing), this amount could represent a significant procurement for a specific aircraft type or a substantial upgrade program. However, without knowing the exact deliverables, it's difficult to make a precise comparison. Large-scale aircraft production contracts can run into hundreds of millions or even billions of dollars, while specialized manufacturing or repair contracts might be in the tens of millions. The relatively low base award ($107,833) compared to the total award suggests this might be a contract vehicle with significant flexibility for task orders, making direct comparison challenging without further details.

What is the track record of Vertex Aerospace LLC in performing government contracts, particularly within the Department of Defense?

Vertex Aerospace LLC has a history of performing contracts within the aerospace and defense sectors. While specific details on past performance metrics for this particular $39.4 million contract are not provided in the summary data, the company's engagement with the Department of the Navy suggests a level of established capability and prior experience. Government contractors are typically assessed on performance, cost control, and adherence to schedule. A contract award, especially through full and open competition, implies that Vertex Aerospace met the necessary qualifications and demonstrated a capacity to fulfill the government's requirements. Further investigation into contract performance databases or past performance reviews would provide a more granular understanding of their track record.

What are the potential risks associated with this contract, given its value and the nature of aircraft manufacturing?

Potential risks associated with this $39.4 million aircraft manufacturing contract include cost overruns if the scope of work expands beyond initial estimates, especially given the large difference between the base award and the total award. Schedule delays are also a risk in complex manufacturing processes, which could impact operational readiness for the Navy. Technical risks, such as unforeseen design challenges or integration issues, can arise in aircraft manufacturing. Furthermore, supply chain disruptions for specialized components could impact timely delivery. The firm-fixed-price nature, while beneficial for cost control, can also put pressure on the contractor if costs escalate unexpectedly, potentially leading to quality compromises if not managed carefully.

How does the firm-fixed-price (FFP) contract type influence cost management and risk allocation for this aircraft manufacturing award?

The firm-fixed-price (FFP) contract type is generally considered advantageous for the government in managing costs, as it establishes a ceiling price that the contractor must adhere to. Under an FFP agreement, the contractor assumes most of the cost risk. This means Vertex Aerospace LLC is responsible for any cost overruns incurred during the performance of the contract. Conversely, if the contractor can complete the work for less than the fixed price, they retain the savings, providing an incentive for efficiency. For the Department of the Navy, this structure offers predictability in budgeting and reduces the risk of unexpected cost increases, provided the scope of work is well-defined and managed.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001905R0081

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 555 INDUSTRIAL DR S, MADISON, MS, 03

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $39,741,086

Exercised Options: $39,741,086

Current Obligation: $39,358,963

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001906D0011

IDV Type: IDC

Timeline