State Department awards $194M aviation support contract to AAR Government Services, Inc

Contract Overview

Contract Amount: $194,347,238 ($194.3M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of State

Start Date: 2024-06-01

End Date: 2026-05-31

Contract Duration: 729 days

Daily Burn Rate: $266.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: WORLDWIDE AVIATION SUPPORT SERVICES OY6

Place of Performance

Location: PATRICK AFB, BREVARD County, FLORIDA, 32925

State: Florida Government Spending

Plain-Language Summary

Department of State obligated $194.3 million to AAR GOVERNMENT SERVICES, INC. for work described as: WORLDWIDE AVIATION SUPPORT SERVICES OY6 Key points: 1. Contract value of $194.3 million over two years suggests significant operational scope. 2. Full and open competition indicates a potentially competitive bidding process. 3. Cost Plus Fixed Fee (CPFF) pricing structure may incentivize cost overruns if not closely monitored. 4. The contract's duration of 729 days aligns with typical support service agreements. 5. Awarded to a single entity, AAR Government Services, Inc., highlighting their specialized capabilities. 6. The North American Industry Classification System (NAICS) code 488190 points to specialized aviation support services.

Value Assessment

Rating: fair

The contract value of $194.3 million for a two-year period averages approximately $97.15 million per year. Benchmarking this against similar aviation support contracts is challenging without more specific service details. However, the CPFF contract type introduces inherent risk regarding cost control. While AAR Government Services, Inc. is a known entity in this space, the absence of detailed performance metrics or cost breakdowns makes a definitive value-for-money assessment difficult at this stage. Further analysis of the fixed fee and the contractor's historical performance on similar contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages competitive pricing. The use of full and open competition is a positive indicator for achieving a fair market price.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open competition, which aims to secure services at the best possible value.

Public Impact

The primary beneficiaries are the Department of State personnel and operations requiring aviation support services. Services delivered likely include aircraft maintenance, logistics, ground support, and potentially flight operations management. The contract is based in Florida (ST/SN), indicating a geographic focus for service delivery. This contract supports the broader mission of the Department of State by ensuring the operational readiness of its aviation assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed diligently, as contractor profit is fixed regardless of actual costs incurred.
Limited transparency on specific performance metrics and deliverables makes it difficult to assess the contractor's efficiency and effectiveness.
The absence of detailed cost breakdowns hinders a thorough value-for-money analysis.
Potential for scope creep in CPFF contracts if requirements are not clearly defined and managed.

Positive Signals

Awarded through full and open competition, suggesting a robust and potentially cost-effective procurement process.
AAR Government Services, Inc. is an established provider in the government contracting space, implying experience and capability.
The contract duration of two years provides a degree of stability for service delivery.
The contract supports critical government operations, ensuring the availability of essential aviation services.

Sector Analysis

This contract falls within the broader aviation support services sector, which is a critical component of national defense, intelligence, and diplomatic operations. The market for these services is characterized by specialized technical expertise and stringent regulatory compliance. Spending in this sector is often driven by the need for operational readiness and specialized maintenance for government fleets. Comparable spending benchmarks would typically involve analyzing other large-scale aviation support contracts awarded by various government agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, AAR Government Services, Inc., may engage small businesses as subcontractors for specialized services, though this is not mandated by the contract terms provided.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of State's contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and managing the CPFF structure. Transparency is facilitated through contract award databases, but detailed operational oversight reports are typically internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of State Aviation Support
Government Aviation Maintenance
Air Transportation Support Services
Defense Logistics Agency Aviation Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Potential for cost overruns due to the nature of CPFF contracts.
Limited public detail on specific performance metrics and deliverables.
Dependence on a single contractor for critical aviation support.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $194.3 million to AAR GOVERNMENT SERVICES, INC.. WORLDWIDE AVIATION SUPPORT SERVICES OY6

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 $194.3 million.

What is the period of performance?

Start: 2024-06-01. End: 2026-05-31.

What is the historical spending pattern of the Department of State on aviation support services, and how does this award compare?

Analyzing the Department of State's historical spending on aviation support services requires access to detailed budget and contract databases. Without specific historical data, it's difficult to provide a precise comparison. However, a $194.3 million award over two years represents a significant investment. Typically, such contracts are awarded to meet ongoing operational needs for aircraft maintenance, logistics, and ground support. If previous contracts for similar services were significantly lower or higher, it could indicate changes in operational tempo, fleet size, or market pricing. A trend of increasing or decreasing spending in this category could also reflect shifts in the Department's global mission requirements or its reliance on contracted aviation support versus organic capabilities.

What specific services are included under 'Other Support Activities for Air Transportation' for this contract?

The NAICS code 488190, 'Other Support Activities for Air Transportation,' is broad and can encompass a range of services beyond basic maintenance. For this Department of State contract, it likely includes specialized support critical to diplomatic and operational aviation missions. This could involve logistical support for aircraft parts and supplies, ground handling services at various locations, technical support for avionics and communication systems, aircraft cleaning and detailing, and potentially specialized training for flight crews or maintenance personnel. Given the nature of diplomatic operations, services might also extend to ensuring aircraft readiness for unique mission profiles, including secure communications and specialized equipment integration. The Cost Plus Fixed Fee structure suggests that the scope may involve complex or evolving requirements where precise cost estimation upfront is challenging.

How does the Cost Plus Fixed Fee (CPFF) pricing structure impact the value for money in this contract?

The Cost Plus Fixed Fee (CPFF) pricing structure means that the contractor (AAR Government Services, Inc.) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. This structure can be advantageous when the scope of work is uncertain or involves research and development, as it allows flexibility. However, it carries a risk of cost overruns, as the contractor has less incentive to control costs once the fee is fixed. For the government, achieving value for money under a CPFF contract heavily relies on robust oversight, clear definition of allowable costs, and effective negotiation of the fixed fee. Without strong program management and auditing, costs can escalate beyond initial expectations, potentially diminishing the overall value compared to fixed-price contracts where cost control is inherent.

What is AAR Government Services, Inc.'s track record with similar government aviation support contracts?

AAR Government Services, Inc. is a well-established entity with a significant history of providing aviation support services to various government agencies, including the Department of Defense and other federal bodies. Their track record typically includes extensive experience in aircraft maintenance, logistics, supply chain management, and depot-level support for a wide range of aircraft platforms. Information regarding past performance on contracts of similar size and scope to this $194 million Department of State award would be available through government contract databases and performance assessment reports (e.g., Contractor Performance Assessment Reporting System - CPARS). Generally, their extensive experience suggests a capability to handle complex aviation support requirements, though specific performance metrics on past contracts would be needed for a detailed assessment.

What are the potential risks associated with this contract, beyond the CPFF structure?

Beyond the inherent risks of the CPFF structure, potential risks for this contract include operational disruptions if AAR Government Services, Inc. fails to meet performance standards, leading to impacts on the Department of State's mission. Geopolitical instability or changes in global operations could necessitate rapid adjustments to support requirements, potentially straining the contract's flexibility. Cybersecurity risks are also a consideration, as aviation support systems often involve sensitive data and network connectivity. Furthermore, the availability of specialized personnel and parts, particularly for aging aircraft or unique platforms, could pose a logistical challenge. Dependence on a single contractor for critical aviation support also introduces a risk if the contractor faces financial difficulties or strategic shifts.

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

Solicitation ID: SAQMMA14R0319

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: AAR Government Services Inc.

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: $221,911,242

Exercised Options: $221,911,242

Current Obligation: $194,347,238

Subaward Activity

Number of Subawards: 144

Total Subaward Amount: $17,337,879

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