State Department awards $113M contract for overseas air transportation support to AAR Government Services

Contract Overview

Contract Amount: $113,149,667 ($113.1M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of State

Start Date: 2019-05-22

End Date: 2021-05-31

Contract Duration: 740 days

Daily Burn Rate: $152.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: OVERSEAS CONTRACT

Plain-Language Summary

Department of State obligated $113.1 million to AAR GOVERNMENT SERVICES, INC. for work described as: OVERSEAS CONTRACT Key points: 1. Contract value represents a significant investment in maintaining critical air support infrastructure abroad. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Contract type (Cost Plus Fixed Fee) warrants scrutiny for cost control and efficiency. 4. Performance period of over two years indicates a need for sustained operational support. 5. The awardee's role in 'Other Support Activities for Air Transportation' highlights specialized service provision. 6. The absence of small business set-aside suggests larger prime contractors are expected to manage this requirement.

Value Assessment

Rating: fair

The contract value of $113.15 million over approximately two years for overseas air transportation support appears substantial. Benchmarking against similar contracts for logistical support in austere environments is crucial. Without specific details on the scope of services, it's difficult to definitively assess value for money. However, the Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs if not managed tightly, as it incentivizes the contractor to incur costs to achieve a fixed fee. Further analysis of the fixed fee and the contractor's performance history would be needed for a more precise valuation.

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. This suggests a robust competitive environment was intended. The number of bidders is not specified, but the 'full and open' designation generally implies multiple interested parties. A competitive process is expected to drive down prices and ensure fair market value, although the CPFF structure requires careful oversight to realize these benefits.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it aims to secure the best possible price and quality through market forces. This approach increases the likelihood that the government is not overpaying for the services rendered.

Public Impact

The primary beneficiaries are likely U.S. government personnel and operations requiring air transportation support in overseas locations. Services delivered include essential support activities for air transportation, crucial for diplomatic and operational missions. The geographic impact is focused on overseas locations where U.S. government air operations are conducted. Workforce implications may involve the creation or sustainment of jobs for personnel with specialized aviation support skills.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not rigorously managed.
Lack of specific performance metrics or detailed scope of work in the provided data makes value assessment challenging.
Overseas operations inherently carry higher logistical and security risks that could impact cost and schedule.

Positive Signals

Awarded under 'Full and Open Competition,' suggesting a competitive process aimed at achieving best value.
The contract duration of over two years indicates a stable, long-term need for these services.
The awardee, AAR Government Services, Inc., likely possesses specialized expertise in aviation support.

Sector Analysis

This contract falls within the broader aerospace and defense services sector, specifically focusing on support activities for air transportation. The market for such services is characterized by specialized technical requirements, stringent regulatory compliance, and often involves operations in challenging or remote locations. Companies like AAR Government Services, Inc. operate in a niche that requires significant expertise in aviation logistics, maintenance, and operational support. Comparable spending benchmarks would involve analyzing other government contracts for similar logistical and operational support services provided to agencies operating globally.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the requirement was deemed to be of a scope or complexity best suited for larger prime contractors, or that the market analysis did not identify sufficient small business capacity to fulfill the requirement competitively. Implications for the small business ecosystem are minimal in terms of direct prime contracting opportunities, though small businesses might participate as subcontractors if permitted by the prime contractor, AAR Government Services, Inc.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant program office within the Department of State. Given the Cost Plus Fixed Fee structure, rigorous financial oversight and performance monitoring are essential to ensure cost control and adherence to the contract terms. Transparency would be enhanced through regular reporting requirements from the contractor and potential audits. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Department of State Overseas Operations Support
Air Mobility Command Logistics Contracts
Defense Logistics Agency Aviation Support Services
Federal Aviation Administration Air Traffic Control Support

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Overseas operations introduce inherent logistical and security risks.
Performance metrics and detailed scope of work are not provided, hindering full value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $113.1 million to AAR GOVERNMENT SERVICES, INC.. OVERSEAS CONTRACT

Who is the contractor on this award?

The obligated recipient is AAR GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $113.1 million.

What is the period of performance?

Start: 2019-05-22. End: 2021-05-31.

What is the specific breakdown of services provided under this 'Other Support Activities for Air Transportation' contract?

The provided data classifies the contract under 'Other Support Activities for Air Transportation' (NAICS code 488190). While the specific breakdown isn't detailed, this category typically encompasses a range of services essential for aviation operations. These can include, but are not limited to, airport ground support, aircraft maintenance and repair services, air traffic control support, cargo handling, passenger services, fueling, and other logistical functions necessary for the efficient operation of air transport. For this particular Department of State contract, the services likely support U.S. government aircraft operating in overseas locations, potentially including diplomatic airlifts, personnel transport, and cargo delivery critical for mission success.

How does the Cost Plus Fixed Fee (CPFF) structure impact the potential cost-effectiveness of this $113 million contract?

The Cost Plus Fixed Fee (CPFF) contract structure means the government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. While CPFF can be useful for research and development or services where cost estimation is difficult, it carries inherent risks for cost-effectiveness. The contractor is incentivized to incur costs to achieve the fixed fee, potentially leading to higher overall expenditures compared to fixed-price contracts. For this $113 million Department of State contract, effective cost control hinges on robust government oversight, detailed cost tracking, and stringent auditing of allowable expenses. The fixed fee itself needs to be justified based on the complexity and risk involved. Without detailed insights into the fee negotiation and ongoing cost monitoring, it's challenging to definitively assess its cost-effectiveness.

What is AAR Government Services, Inc.'s track record with similar government contracts, particularly in overseas environments?

AAR Government Services, Inc. is a known entity in the government contracting space, often providing aviation support services. Their track record with similar contracts, especially those involving overseas operations, is crucial for assessing performance risk. While the provided data doesn't detail their specific past performance on this exact type of service or location, a comprehensive review would involve examining past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and their experience with the logistical and security challenges inherent in overseas operations. A positive track record with similar complex aviation support contracts would mitigate performance risk for this $113 million award.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for a contract focused on 'Other Support Activities for Air Transportation' in overseas locations, typical KPIs would likely include metrics related to aircraft availability, on-time performance for flights, response times for ground support, safety incident rates, fuel efficiency, and adherence to maintenance schedules. For a Cost Plus Fixed Fee contract, KPIs would also extend to financial management, such as accurate cost reporting and staying within projected budgets where applicable. The Department of State's contracting officer and program managers would be responsible for defining, monitoring, and enforcing these KPIs to ensure mission objectives are met and taxpayer funds are used efficiently.

How does this $113 million contract compare to historical spending by the Department of State for similar overseas air support services?

To compare this $113 million contract to historical spending, one would need to analyze previous Department of State contracts for overseas air transportation support. This involves identifying similar contract vehicles, their values, durations, and the scope of services provided over the past several fiscal years. Factors such as inflation, changes in operational tempo, geopolitical shifts, and evolving technological capabilities would need to be considered for a fair comparison. If this contract represents a significant increase or decrease in spending compared to historical averages for similar services, it warrants further investigation into the underlying reasons, such as expanded mission requirements or improved cost efficiencies.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

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

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aarcorp

Address: 1100 N WOOD DALE RD, WOOD DALE, IL, 60191

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

Financial Breakdown

Contract Ceiling: $118,847,281

Exercised Options: $118,847,281

Current Obligation: $113,149,667

Actual Outlays: $2,621,655

Subaward Activity

Number of Subawards: 72

Total Subaward Amount: $40,813,114

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA16D0136

IDV Type: IDC

Timeline