DoD's $96.5M Afghanistan Airlift Contract Awarded to AAR Airlift Group for Rotary Wing Services

Contract Overview

Contract Amount: $96,470,344 ($96.5M)

Contractor: AAR Airlift Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-11-29

End Date: 2012-11-30

Contract Duration: 367 days

Daily Burn Rate: $262.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AFGHANISTAN ROTARY WING AIRLIFT SERVICES

Plain-Language Summary

Department of Defense obligated $96.5 million to AAR AIRLIFT GROUP, INC. for work described as: AFGHANISTAN ROTARY WING AIRLIFT SERVICES Key points: 1. Contract value represents a significant investment in logistical support for operations in Afghanistan. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. Fixed-price contract type aims to control costs and provide predictability for the government. 4. The duration of the contract (367 days) indicates a medium-term operational requirement. 5. The specific service (nonscheduled chartered passenger air transportation) highlights a niche but critical capability. 6. AAR Airlift Group's selection implies a strong performance record or competitive pricing.

Value Assessment

Rating: good

The contract value of approximately $96.5 million for a year of rotary wing airlift services in Afghanistan appears reasonable given the operational complexities and risks associated with the region. Benchmarking against similar USTRANSCOM contracts for airlift in austere environments would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage cost overruns, though the specific unit costs are not detailed here.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors were solicited and allowed to bid. The presence of three bidders suggests a healthy level of competition for this specialized service. This competitive environment is generally expected to drive down prices and encourage innovation, leading to better value for the government.

Taxpayer Impact: A competitive award process for this significant contract ensures that taxpayer dollars are likely being used more efficiently, as bidders strive to offer the most cost-effective solution to win the contract.

Public Impact

Provides essential transportation for personnel and potentially equipment within Afghanistan. Supports ongoing military and diplomatic operations by ensuring mobility and logistical reach. Impacts the safety and effectiveness of deployed forces by enabling rapid movement. Contributes to the overall stability and security efforts in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Geopolitical instability in Afghanistan poses inherent risks to flight operations and personnel safety.
Reliance on a single contractor for critical airlift services could create vulnerabilities if performance issues arise.
Fluctuations in fuel prices or operational costs could impact the contractor's profitability and service delivery under a fixed-price contract.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Firm fixed-price contract type provides cost certainty for the government.
The contractor, AAR Airlift Group, likely possesses specialized expertise in rotary wing operations in challenging environments.

Sector Analysis

Rotary wing airlift services are a critical component of the aerospace and defense sector, particularly for military and logistical operations in complex environments. This contract falls within the broader category of aviation support services, which is a substantial market driven by government and commercial demand. The market is characterized by high barriers to entry due to regulatory requirements, specialized equipment, and operational expertise. Comparable spending benchmarks would involve analyzing other USTRANSCOM or DoD contracts for similar airlift capabilities in theaters of operation.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As it was awarded under full and open competition, the primary focus was likely on the best overall value from all eligible offerors, rather than prioritizing small business participation directly through set-asides. Further analysis would be needed to determine if AAR Airlift Group has a history of subcontracting with small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and program management offices, specifically USTRANSCOM. Accountability measures are embedded within the contract terms, including performance standards and payment schedules. Transparency is generally maintained through contract award databases, though detailed operational performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Afghanistan Security Forces Fund
Theater Express
Expeditionary Airlift Services
Combat Support Agency Contracts

Risk Flags

Operational Risk in Hostile Environment
Contractor Performance Dependency
Geopolitical Instability Impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $96.5 million to AAR AIRLIFT GROUP, INC.. AFGHANISTAN ROTARY WING AIRLIFT SERVICES

Who is the contractor on this award?

The obligated recipient is AAR AIRLIFT GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $96.5 million.

What is the period of performance?

Start: 2011-11-29. End: 2012-11-30.

What is AAR Airlift Group's track record with similar government contracts, particularly in high-risk environments?

AAR Airlift Group has a significant history of providing aviation services to the U.S. government, including extensive experience with military airlift operations. They have been awarded numerous contracts for various support roles, often in challenging operational theaters similar to Afghanistan. Their portfolio includes fixed-wing and rotary-wing aircraft operations, maintenance, and logistical support. While specific performance details for every contract are not always public, their continued success in securing large government contracts suggests a generally positive track record and demonstrated capability to meet demanding requirements. However, a deeper dive into past performance reviews, any documented disputes, or contract terminations would be necessary for a comprehensive assessment of their reliability in high-risk environments.

How does the per-hour or per-flight cost of this contract compare to similar airlift services in other regions or previous periods?

Without access to the specific unit pricing (e.g., per hour, per flight mile) within the contract documents, a direct cost comparison is challenging. However, the total contract value of approximately $96.5 million over roughly 12 months suggests a substantial operational tempo. Airlift services in conflict zones like Afghanistan typically command higher prices due to increased operational complexity, risk premiums, insurance costs, and the need for specialized security measures. Comparing this to contracts in less volatile regions or to historical data from earlier phases of the Afghanistan conflict would likely show a premium. Factors such as aircraft type, payload capacity, and specific mission profiles (e.g., passenger vs. cargo, day vs. night operations) heavily influence per-unit costs, making direct apples-to-apples comparisons difficult without granular data.

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

The primary risks associated with this contract are multifaceted. Geopolitical instability and security threats in Afghanistan pose significant risks to flight operations, personnel safety, and aircraft security. Operational risks include potential equipment failures, weather-related disruptions, and logistical challenges in remote areas. Furthermore, the firm fixed-price nature of the contract introduces financial risk for the contractor if operational costs exceed projections due to unforeseen circumstances like fuel price spikes or extended mission durations. Mitigation strategies likely include robust security protocols for aircrews and aircraft, comprehensive maintenance schedules, contingency planning for operational disruptions, and potentially risk-sharing clauses or contract modifications for significant, unforecasted events. The government also mitigates risk through contractor performance monitoring and defined contract terms.

How effective has this type of airlift service been in supporting U.S. objectives in Afghanistan historically?

Rotary wing airlift services have been historically critical to supporting U.S. objectives in Afghanistan by providing essential mobility and logistical capabilities in a challenging, often road-inaccessible terrain. These services enable the rapid deployment and extraction of personnel, transportation of critical supplies and equipment, and support for special operations. Their effectiveness is directly linked to mission success, troop safety, and the ability to project power and influence across the country. While indispensable, the effectiveness can be influenced by factors such as the security environment, the availability of suitable landing zones, and the coordination with ground forces. The consistent requirement for such services underscores their perceived value in achieving strategic goals in the region.

What is the trend in U.S. government spending on similar airlift services over the past five years?

U.S. government spending on airlift services, particularly in support of overseas contingency operations, has generally seen fluctuations tied to the level of military engagement and strategic priorities. While overall defense spending remains substantial, specific allocations for services like rotary wing airlift in regions like Afghanistan may have decreased from peak operational periods as troop levels reduced and focus shifted. However, spending on specialized aviation support, including charter services, often remains significant due to the unique capabilities required. Analyzing broader categories such as 'Aircraft Maintenance and Repair Services' or 'Transportation Services' within the DoD budget can provide context, but pinpointing the exact trend for this specific niche requires detailed analysis of contract awards databases over the period.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aarcorp (UEI: 005425814)

Address: 114 HANGAR LN, CAMDEN, NC, 27921

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $96,470,344

Exercised Options: $96,470,344

Current Obligation: $96,470,344

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71109D0021

IDV Type: IDC

Timeline