DoD's $152.8M airlift contract for Afghanistan services awarded to AAR Airlift Group, Inc

Contract Overview

Contract Amount: $152,776,269 ($152.8M)

Contractor: AAR Airlift Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-12-03

End Date: 2014-04-30

Contract Duration: 513 days

Daily Burn Rate: $297.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AFGHANISTAN ROTARY WING COMMERCIAL AIRLIFT SERVICES

Plain-Language Summary

Department of Defense obligated $152.8 million to AAR AIRLIFT GROUP, INC. for work described as: AFGHANISTAN ROTARY WING COMMERCIAL AIRLIFT SERVICES Key points: 1. Contract value represents significant investment in logistical support for operations. 2. Full and open competition suggests a potentially competitive bidding environment. 3. Contract duration of 513 days indicates a medium-term operational need. 4. Firm fixed-price structure aims to control costs and provide budget certainty. 5. Awarded to a single contractor, AAR Airlift Group, Inc., highlighting specialized capabilities. 6. Focus on nonscheduled chartered passenger air transportation points to flexible, on-demand needs.

Value Assessment

Rating: fair

The total contract value of $152.8 million over approximately 17 months suggests a substantial investment. Benchmarking this against similar large-scale airlift contracts in active theaters is challenging without more specific service details and performance metrics. The firm fixed-price nature provides cost certainty, but the absence of detailed cost breakdowns or comparisons to market rates for comparable services makes a definitive value-for-money assessment difficult. The awarded amount appears within a reasonable range for complex, long-duration international logistics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the number of bidders is not explicitly stated in the provided data (only the number of delivery orders), this competitive approach is generally expected to foster price discovery and encourage multiple vendors to offer their best terms. The fact that AAR Airlift Group, Inc. ultimately won the award suggests they provided the most advantageous offer.

Taxpayer Impact: A competitive bidding process for this significant contract helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among potential contractors.

Public Impact

Provides critical logistical support for Department of Defense operations in Afghanistan. Ensures the movement of personnel via air transportation, facilitating mission objectives. Supports the U.S. military presence and operational tempo in the Afghanistan theater. Indirectly impacts the workforce through the need for aviation and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if operational demands exceed initial projections under a fixed-price contract.
Dependence on a single contractor for critical airlift services could pose a risk if performance issues arise.
Geopolitical instability in Afghanistan could impact operational feasibility and increase costs.

Positive Signals

Firm fixed-price contract provides budget predictability for the Department of Defense.
Full and open competition suggests a robust process for selecting the most capable and cost-effective provider.
Award to an established entity like AAR Airlift Group, Inc. may indicate a track record of reliable service delivery.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aviation services. The market for military airlift is characterized by high barriers to entry due to stringent safety, security, and operational requirements. Spending in this area is often driven by geopolitical commitments and the need for flexible, on-demand transportation in challenging environments. Comparable spending benchmarks would typically involve other large-scale, long-term contracts for similar services in active operational theaters.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside provisions. Therefore, it is unlikely that small businesses were specifically targeted for this prime contract. However, the prime contractor, AAR Airlift Group, Inc., may engage small businesses for subcontracting opportunities to fulfill specific aspects of the service, though this is not detailed in the provided information.

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. Mechanisms likely include regular performance reviews, delivery order monitoring, and adherence to contract terms. Inspector General investigations could be initiated if performance issues, fraud, or waste are suspected. Transparency is generally maintained through contract award databases, though detailed performance metrics may be sensitive.

Related Government Programs

Afghanistan Security Forces Fund
Logistics and Support Services Contracts
Military Airlift Command Contracts
Theater Support Contracts

Risk Flags

Potential for service disruption due to single contractor reliance.
Geopolitical instability impacting operational feasibility.
Cost escalation risks under firm fixed-price if unforeseen operational demands arise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $152.8 million to AAR AIRLIFT GROUP, INC.. AFGHANISTAN ROTARY WING COMMERCIAL 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 $152.8 million.

What is the period of performance?

Start: 2012-12-03. End: 2014-04-30.

What is the historical spending trend for Afghanistan rotary wing commercial airlift services?

Analyzing historical spending trends for Afghanistan rotary wing commercial airlift services requires access to historical contract data beyond this single award. However, general trends in U.S. military spending in Afghanistan indicate significant investment in logistical support, including airlift, throughout the duration of the conflict. Spending often fluctuated based on troop levels, operational tempo, and specific mission requirements. Contracts for such services are typically awarded through competitive processes, with values ranging from millions to hundreds of millions of dollars annually, depending on the scope and duration of services required. Factors like the political climate, security situation, and the drawdown or build-up of forces directly influenced the demand and associated spending on airlift capabilities.

How does the awarded price compare to market rates for similar airlift services in comparable regions?

Determining if the awarded price of $152.8 million for Afghanistan rotary wing commercial airlift services is competitive requires detailed market analysis and comparison with similar contracts. Factors influencing market rates include the type of aircraft, payload capacity, flight hours, operational duration, geographic location (including security risks and basing costs), and specific service requirements (e.g., passenger vs. cargo, scheduled vs. unscheduled). Without access to a benchmark of current market rates for comparable services in similar high-risk environments, or details on the specific performance metrics and service levels expected under this contract, a precise comparison is difficult. However, given the inherent complexities and risks associated with operating in Afghanistan, costs for such services are generally higher than in more stable regions.

What are the key performance indicators (KPIs) used to evaluate AAR Airlift Group, Inc.'s performance under this contract?

Key Performance Indicators (KPIs) for airlift services contracts typically focus on reliability, safety, and efficiency. For this specific contract, common KPIs would likely include on-time performance for flights, aircraft availability rates, adherence to flight plans and safety regulations, fuel efficiency, and passenger/cargo damage rates. Mission completion success rates and response times for unscheduled flights would also be critical. The Department of Defense, through USTRANSCOM, would monitor these KPIs closely. Performance failures against these metrics could lead to contractually defined remedies, such as service level credits or, in severe cases, contract termination. Specific KPIs are usually detailed within the contract's Performance Work Statement (PWS).

What is the track record of AAR Airlift Group, Inc. in performing similar large-scale government contracts?

AAR Airlift Group, Inc. has a significant track record in providing aviation services, including airlift, to government and military clients. They have been involved in numerous contracts, often of substantial value, supporting various operational and logistical needs. Their experience typically includes providing rotary-wing and fixed-wing aircraft, aircrews, maintenance, and logistical support in complex and often austere environments. Publicly available contract databases and government accountability reports often detail their past performance. While specific details of past performance on contracts of this exact scale and scope would require deeper research, AAR is generally recognized as a major player in the government aviation services market, with extensive experience in military support operations.

What are the potential risks associated with relying on a single contractor for critical airlift services in a challenging environment like Afghanistan?

Relying on a single contractor, AAR Airlift Group, Inc. in this case, for critical airlift services in Afghanistan presents several potential risks. Firstly, there's a risk of service disruption if the contractor experiences financial difficulties, operational failures, or labor disputes. Secondly, a lack of competition post-award could lead to complacency or reduced incentive for cost efficiency and service improvement. Thirdly, if the contractor's performance degrades or they face unforeseen challenges (e.g., aircraft availability, maintenance issues, crew shortages), the government has limited immediate alternatives, potentially impacting mission-critical operations. Finally, dependence on one entity can create leverage issues during contract renegotiations or modifications.

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: $152,776,269

Exercised Options: $152,776,269

Current Obligation: $152,776,269

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71109D0021

IDV Type: IDC

Timeline