DOT awards $5.1M for engine overhaul, exceeding benchmark by 200% for critical aviation support

Contract Overview

Contract Amount: $5,139,099 ($5.1M)

Contractor: JET Support Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2024-08-02

End Date: 2025-05-30

Contract Duration: 301 days

Daily Burn Rate: $17.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: LABOR HOURS

Sector: Other

Official Description: CF34 ENGINE OVERHAUL SN 950849 AND 950850. N89

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60601

State: Illinois Government Spending

Plain-Language Summary

Department of Transportation obligated $5.1 million to JET SUPPORT SERVICES, INC. for work described as: CF34 ENGINE OVERHAUL SN 950849 AND 950850. N89 Key points: 1. Value for money is questionable due to significant cost overruns compared to benchmarks. 2. Competition dynamics indicate a sole-source award, potentially limiting price discovery. 3. Risk indicators include a high per-unit cost and a short performance period. 4. Performance context suggests a focus on urgent operational needs for specific aircraft engines. 5. Sector positioning places this contract within the essential aviation maintenance and support services.

Value Assessment

Rating: questionable

The contract's value is concerning as the per-unit cost of $17,073 significantly exceeds the benchmark of $5,670 (calculated from the provided data). This represents a 200% increase over the expected cost for engine overhauls of this nature. While the urgency of the need might justify some premium, the magnitude of the difference warrants scrutiny to ensure taxpayer funds are used efficiently and that the pricing reflects fair market value.

Cost Per Unit: $17,073 per unit, significantly higher than the benchmark of $5,670.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the provided data indicates only one award was made, and the high per-unit cost suggests that either the competition was not robust, or the specific requirements of the overhaul led to a higher-than-expected price even among bidders. Further analysis would be needed to understand the number of bids received and the reasons for the significant price variance.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the high per-unit cost in this instance suggests that the competitive process may not have resulted in optimal price discovery for this specific requirement.

Public Impact

Benefits the Federal Aviation Administration (FAA) by ensuring the operational readiness of critical aircraft engines. Services delivered include the overhaul of two specific CF34 engines, essential for flight operations. Geographic impact is localized to the maintenance facility where the engines are serviced. Workforce implications include skilled technicians performing specialized engine maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost significantly exceeds benchmarks, raising concerns about value for money.
Short contract duration may indicate a focus on immediate needs rather than long-term strategic maintenance.
Lack of detailed justification for the price variance in the provided data.

Positive Signals

Awarded under full and open competition, suggesting an attempt to solicit multiple bids.
Addresses a critical need for aircraft engine maintenance, ensuring operational continuity.
Contract is for a specific, identifiable service (engine overhaul).

Sector Analysis

The aviation maintenance sector is a critical component of the broader aerospace industry, focusing on ensuring the airworthiness and operational efficiency of aircraft. This contract falls within the specialized services segment, specifically engine overhaul and repair. The market for such services is highly technical, often requiring certified facilities and specialized expertise. Comparable spending benchmarks in this sector are crucial for evaluating the cost-effectiveness of individual contracts, as specialized labor and parts can significantly influence pricing.

Small Business Impact

The provided data indicates that small business participation was not a primary consideration for this contract, as the 'ss' (small business set-aside) field is false and the 'sb' (small business) field is also false. This suggests the contract was not specifically targeted towards small businesses. There is no information on subcontracting plans for small businesses. The impact on the small business ecosystem is likely minimal unless the prime contractor has a robust subcontracting program that includes small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Aviation Administration (FAA), a division of the Department of Transportation. Accountability measures would include adherence to the contract's terms, delivery schedules, and quality standards for the engine overhaul. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Engine Repair and Overhaul Services
Aviation Maintenance Contracts
Federal Aviation Administration Procurement
Department of Transportation Operational Support

Risk Flags

High per-unit cost significantly exceeds benchmark.
Potential for limited price discovery despite full and open competition.
Short contract duration may indicate urgency and potentially inflated pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $5.1 million to JET SUPPORT SERVICES, INC.. CF34 ENGINE OVERHAUL SN 950849 AND 950850. N89

Who is the contractor on this award?

The obligated recipient is JET SUPPORT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $5.1 million.

What is the period of performance?

Start: 2024-08-02. End: 2025-05-30.

What is the specific nature of the CF34 engine overhaul and why is it critical for the FAA?

The CF34 engine is a turbofan engine commonly used on regional jet aircraft. An overhaul is a comprehensive process that involves disassembling the engine, inspecting all components for wear and tear, repairing or replacing parts, reassembling, and testing to ensure it meets original performance specifications. This process is critical for the FAA to maintain the airworthiness and safety of aircraft under its purview, ensuring reliable air transportation services. The specific engines mentioned (SN 950849 and 950850) are likely part of an active fleet requiring maintenance to prevent failures and ensure compliance with safety regulations.

How does the $17,073 per-unit cost compare to typical CF34 engine overhaul costs?

The provided data indicates a per-unit cost of $17,073 for the CF34 engine overhaul. Based on industry benchmarks and the provided data's implied benchmark ($5,670), this cost is approximately 200% higher than expected. Typical overhaul costs for CF34 engines can vary significantly based on the extent of work required, the specific model, and the service provider's overhead. However, a difference of this magnitude suggests either the engines required exceptionally extensive repairs, the benchmark used is not directly comparable, or the pricing is inflated. Further investigation into the detailed scope of work and the specific conditions of the engines is warranted.

What factors might explain the significant price difference compared to the benchmark?

Several factors could contribute to the significant price difference. Firstly, the engines might have experienced unforeseen damage or extensive wear, necessitating more complex and costly repairs than a standard overhaul. Secondly, the benchmark itself might not be directly comparable; it could represent a different service level, a different engine variant, or an older pricing standard. Thirdly, the 'full and open competition' might have attracted fewer bidders than anticipated, or the winning bid was simply higher due to market conditions or the contractor's specific cost structure. Finally, the short performance period (301 days) might indicate an urgent need, potentially allowing for premium pricing.

What are the implications of awarding this contract under 'full and open competition' despite the high per-unit cost?

Awarding under 'full and open competition' theoretically ensures that the government receives the best possible value by soliciting offers from all responsible sources. However, in this case, the high per-unit cost suggests that the competitive process did not yield a price aligned with expectations or benchmarks. This could imply that either the market for this specific service is limited, the requirements were highly specialized, or the bidders perceived significant risks or costs associated with the contract. It raises questions about the effectiveness of the competition in driving down prices for this particular requirement.

What is the significance of the short contract duration (301 days) for this engine overhaul?

A contract duration of 301 days for an engine overhaul suggests a focus on a specific, time-bound task rather than a long-term maintenance agreement. This could indicate an urgent operational need for these particular engines to be returned to service quickly. Such urgency might justify a higher price due to expedited service requirements or limited availability of resources. It also means that future overhaul needs will require separate procurement actions, potentially leading to recurring administrative costs and the need to re-evaluate pricing and competition each time.

What is the role of Jet Support Services, Inc. (JSSI) in this contract and their track record?

Jet Support Services, Inc. (JSSI) is the contractor awarded this delivery order. JSSI is known for providing aviation maintenance and support services, including engine maintenance programs and hourly cost maintenance programs. Their role here is to perform the specified overhaul on the two CF34 engines. While the provided data doesn't detail JSSI's specific track record on FAA contracts, their presence in the aviation support industry suggests they possess the technical capabilities. However, the high per-unit cost associated with this specific award warrants scrutiny of their pricing strategy and efficiency.

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: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 180 N STETSON FL 29, CHICAGO, IL, 60601

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

Financial Breakdown

Contract Ceiling: $5,139,099

Exercised Options: $5,139,099

Current Obligation: $5,139,099

Actual Outlays: $5,139,099

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 6973GH22D00096

IDV Type: IDC

Timeline