DHS Spends $794M on Daily Charter Flights for ICE, Raising Concerns Over Value and Competition

Contract Overview

Contract Amount: $794,320,930 ($794.3M)

Contractor: Classic AIR Charter Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2017-10-20

End Date: 2023-06-30

Contract Duration: 2,079 days

Daily Burn Rate: $382.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: IGF::OT::IGF DAILY CHARTER FLIGHT SERVICES

Place of Performance

Location: HUNTINGTON, SUFFOLK County, NEW YORK, 11743

State: New York Government Spending

Plain-Language Summary

Department of Homeland Security obligated $794.3 million to CLASSIC AIR CHARTER INC. for work described as: IGF::OT::IGF DAILY CHARTER FLIGHT SERVICES Key points: 1. Significant expenditure of $794M on charter flights over six years. 2. Limited competition noted, despite 'Full and Open' designation. 3. Potential for cost overruns and lack of transparency in pricing. 4. Sector context: Air transportation services are critical but require rigorous oversight.

Value Assessment

Rating: questionable

The total contract value of $794M appears high for daily charter flight services. Benchmarking against similar contracts for unscheduled air transportation is difficult without more specific service details, but the duration and cost warrant scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While advertised as 'Full and Open Competition,' the data suggests a single award, raising questions about the effectiveness of the competition process. This could lead to less favorable pricing for the government.

Taxpayer Impact: Taxpayers may be bearing a higher cost due to potentially limited effective competition and the Time and Materials pricing structure.

Public Impact

Citizens may question the necessity and cost-effectiveness of such extensive charter flight usage. Transparency in how 'daily' flights were utilized and justified is crucial for public trust. The long duration of the contract (2017-2023) suggests a sustained need, but also a long period for potential inefficiencies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High total contract value
Potential for limited effective competition
Time and Materials pricing structure
Long contract duration

Positive Signals

Contract awarded to a single entity, potentially indicating specialized service delivery

Sector Analysis

The Department of Homeland Security, specifically ICE, utilizes air transportation for operational needs. Spending benchmarks for unscheduled air charter services vary widely based on aircraft type, duration, and specific mission requirements. This contract's scale suggests significant and consistent demand.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as 'sb' is false. Further analysis would be needed to determine if subcontracting opportunities were provided to small businesses.

Oversight & Accountability

The 'aw' field indicates 'Delivery Order,' suggesting this is a task order under a larger contract. Oversight would involve monitoring individual delivery orders for necessity, cost, and performance, as well as the overall contract's adherence to competition and value principles.

Related Government Programs

Other Nonscheduled Air Transportation
Department of Homeland Security Contracting
U.S. Immigration and Customs Enforcement Programs

Risk Flags

High total expenditure
Potential for limited effective competition
Time and Materials pricing structure
Lack of small business participation indicated
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $794.3 million to CLASSIC AIR CHARTER INC.. IGF::OT::IGF DAILY CHARTER FLIGHT SERVICES

Who is the contractor on this award?

The obligated recipient is CLASSIC AIR CHARTER INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $794.3 million.

What is the period of performance?

Start: 2017-10-20. End: 2023-06-30.

What specific operational needs justified the extensive use of daily charter flights over commercial air travel or other transportation methods?

The justification for daily charter flights likely stems from unique operational requirements of U.S. Immigration and Customs Enforcement (ICE), such as rapid deployment, secure transport of individuals, or access to remote locations not served by commercial airlines. Without specific details on the missions, it's difficult to definitively assess the necessity compared to alternative, potentially more cost-effective, methods.

How was the 'Full and Open Competition' process managed to ensure genuine competition and optimal pricing for a contract of this magnitude?

The 'Full and Open Competition' designation implies that all responsible sources were permitted to submit offers. However, the single award suggests that either only one offer was received, or Classic Air Charter Inc. was the only responsible source capable of meeting the stringent requirements. Further investigation into the solicitation process, evaluation criteria, and any pre-solicitation market research would be necessary to understand if the competition was truly robust and yielded the best possible pricing.

What measures were in place to control costs and ensure value under the Time and Materials pricing structure for this long-term contract?

Time and Materials (T&M) contracts inherently carry a higher risk of cost overruns as they are not capped by a fixed price. Effective oversight for this contract would have required rigorous monitoring of labor hours, material costs, and task completion. Establishing clear ceiling prices for labor categories and materials, along with detailed justifications for all expenditures, would be critical to ensuring taxpayer value and preventing uncontrolled spending over the contract's duration.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Other Nonscheduled Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HSCECR-17-Q-00005

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 3200 N RIVERSIDE DR, INDIALANTIC, FL, 32903

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

Financial Breakdown

Contract Ceiling: $879,099,051

Exercised Options: $879,099,051

Current Obligation: $794,320,930

Actual Outlays: $189,668,370

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS33F004DA

IDV Type: FSS

Timeline