DoD's $666M Logistics Consulting Contract with S & K Aerospace Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $665,858,925 ($665.9M)

Contractor: S & K Aerospace, LLC

Awarding Agency: Department of Defense

Start Date: 2012-03-15

End Date: 2022-03-14

Contract Duration: 3,651 days

Daily Burn Rate: $182.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF PROS IV

Place of Performance

Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31088, UNITED STATES OF AMERICA

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $665.9 million to S & K AEROSPACE, LLC for work described as: IGF::CL::IGF PROS IV Key points: 1. The contract's substantial value raises questions about cost-effectiveness for logistics consulting. 2. Full and open competition was utilized, but the long duration and firm fixed price warrant review. 3. Potential risks include vendor lock-in and the possibility of inflated costs over the decade-long period. 4. The IT sector (NAICS 541614) often sees significant spending, making benchmarks crucial for assessment.

Value Assessment

Rating: questionable

The contract's $665.9 million value over 10 years suggests a high per-unit cost for consulting services. Without specific deliverables or performance metrics, it's difficult to benchmark against similar contracts, raising concerns about overall value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the 10-year duration may have limited the number of active bidders over time, potentially impacting the competitive pressure on pricing.

Taxpayer Impact: The significant expenditure over a decade represents a substantial taxpayer investment. Ensuring the services provided were essential and cost-effective is critical for responsible fiscal management.

Public Impact

Taxpayers funded a decade-long logistics consulting service contract valued at nearly $666 million. The Department of the Air Force awarded the contract, indicating a focus on operational efficiency. The long contract term raises questions about adaptability to evolving logistical needs and technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years)
High total contract value
Lack of specific performance metrics for value assessment

Positive Signals

Full and open competition utilized
Firm fixed price contract type

Sector Analysis

This contract falls under professional, scientific, and technical services, specifically logistics consulting. Spending in this sector can vary widely, but large, long-term contracts like this require rigorous justification to ensure they align with government needs and offer competitive pricing.

Small Business Impact

The data indicates the awardee is S & K AEROSPACE, LLC. There is no specific information provided regarding small business participation or subcontracting goals within this contract.

Oversight & Accountability

The long duration and significant value of this contract warrant robust oversight to ensure continued adherence to the contract's terms and to monitor performance and cost-effectiveness throughout its lifecycle.

Related Government Programs

Process, Physical Distribution, and Logistics Consulting Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Potential for cost overruns due to long duration
Risk of vendor lock-in
Difficulty in adapting to technological changes over 10 years
Lack of clear performance metrics for value assessment
Ensuring continued fair and reasonable pricing over a decade

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $665.9 million to S & K AEROSPACE, LLC. IGF::CL::IGF PROS IV

Who is the contractor on this award?

The obligated recipient is S & K AEROSPACE, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $665.9 million.

What is the period of performance?

Start: 2012-03-15. End: 2022-03-14.

What specific logistics challenges did the Air Force aim to address with this decade-long, $666 million contract, and how was the necessity and scope of these services justified?

The contract aimed to provide comprehensive logistics consulting services, likely encompassing areas such as supply chain optimization, inventory management, transportation efficiency, and operational support. Justification would typically involve demonstrating a long-term, complex need that required specialized expertise beyond organic capabilities, with the scope defined by the evolving strategic and operational requirements of the Air Force.

Given the firm fixed price and 10-year term, what mechanisms were in place to ensure the price remained fair and reasonable throughout the contract's life, and how was vendor performance evaluated?

While a firm fixed price provides cost certainty, mechanisms for ensuring fairness over a decade could include periodic price reviews, economic price adjustments (if stipulated), and robust performance monitoring. The government likely relied on contract clauses for performance evaluation, potentially including key performance indicators (KPIs) or service level agreements (SLAs), to ensure the contractor met its obligations.

How did the full and open competition process ensure that multiple qualified vendors could compete effectively over the entire 10-year period, and what was the competitive landscape like?

The initial full and open competition aimed to attract a wide range of bidders. However, the 10-year duration might have presented challenges for sustained competition, as market conditions and vendor capabilities evolve. The government likely assessed the initial bids rigorously, but ongoing market research would be prudent to understand the competitive landscape throughout the contract's life.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA863010R5018

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 63066 OLD HWY 93, SAINT IGNATIUS, MT, 59865

Business Categories: 8(a) Program Participant, Category Business, Labor Surplus Area Firm, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,636,000,000

Exercised Options: $1,636,000,000

Current Obligation: $665,858,925

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA863012D5018

IDV Type: IDC

Timeline