DoD's $23.4M air cargo contract awarded to National Air Cargo Group, Inc. for scheduled freight

Contract Overview

Contract Amount: $23,444,513 ($23.4M)

Contractor: National AIR Cargo Group, Inc

Awarding Agency: Department of Defense

Start Date: 2010-10-10

End Date: 2010-10-10

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS

Plain-Language Summary

Department of Defense obligated $23.4 million to NATIONAL AIR CARGO GROUP, INC for work described as: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS Key points: 1. Value for money assessed through comparison with similar contracts and market rates. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators are evaluated based on contractor performance and contract type. 4. Performance context is derived from the specific services delivered and contract duration. 5. Sector positioning places this contract within the broader defense logistics and transportation industry.

Value Assessment

Rating: fair

Benchmarking the $23.4 million value of this contract against similar scheduled air freight services is challenging without more granular data on specific routes, cargo types, and service levels. The firm fixed-price contract type suggests that the contractor bears the risk of cost overruns, which can be favorable for the government if managed effectively. However, without a detailed cost breakdown or comparison to industry benchmarks for similar services, it's difficult to definitively assess if the pricing represents excellent value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders were likely considered. This competitive environment generally promotes price discovery and can lead to more favorable pricing for the government. The number of bidders, if available, would provide further insight into the intensity of the competition.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing services at competitive market rates, preventing potential overpayment.

Public Impact

The Department of Defense benefits from reliable and scheduled air cargo transportation services. This contract supports the delivery of essential goods and materials for military operations. The geographic impact is likely global, facilitating the movement of assets to various operational theaters. Workforce implications may include support for logistics personnel and air cargo handlers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation if market conditions change significantly during contract performance.
Dependence on a single contractor for critical transportation services could pose a risk if performance issues arise.

Positive Signals

Firm fixed-price contract structure shifts cost risk to the contractor.
Awarded through full and open competition, suggesting a competitive pricing environment.
Contract supports essential Department of Defense logistics requirements.

Sector Analysis

This contract falls within the broader defense logistics and transportation sector, a critical component of national security. The market for scheduled air freight services is competitive, with numerous providers capable of meeting government demands. Spending in this area is substantial, reflecting the ongoing need for rapid and reliable movement of personnel and materiel globally. Comparable spending benchmarks would typically involve analyzing other large-scale air cargo contracts awarded by the DoD and other federal agencies.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. Without this information, it's difficult to assess the impact on the small business ecosystem. Typically, large transportation contracts may include provisions for small business participation, but this requires specific contract details.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Transportation Command (USTRANSCOM), which is responsible for managing the global７ transportation network for the DoD. Accountability measures would be embedded in the contract terms, including performance standards and delivery schedules. Transparency is generally maintained through contract award databases, though specific performance metrics may be internal.

Related Government Programs

Military Sealift Command contracts
Air Mobility Command airlift services
Defense Logistics Agency transportation services

Risk Flags

Contract awarded for scheduled freight transportation.
Contract value is substantial at $23.4 million.
Contract type is Firm Fixed Price.
Contract awarded via Full and Open Competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.4 million to NATIONAL AIR CARGO GROUP, INC. CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS

Who is the contractor on this award?

The obligated recipient is NATIONAL AIR CARGO GROUP, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $23.4 million.

What is the period of performance?

Start: 2010-10-10. End: 2010-10-10.

What is the historical spending pattern for scheduled air freight transportation by the Department of Defense?

Historical spending on scheduled air freight by the Department of Defense is substantial, reflecting the critical need for rapid global logistics. While specific figures for this contract are $23.4 million, the DoD consistently allocates significant resources to air cargo services to support operational readiness and deployment. Analyzing past contracts awarded by USTRANSCOM and other relevant agencies would reveal trends in contract values, types of services procured (e.g., priority, routine), and the primary contractors involved. This historical data is crucial for benchmarking current contract values and identifying any significant deviations or increases in spending over time, which could indicate changes in operational tempo, geopolitical factors, or evolving logistical requirements.

How does the contractor, National Air Cargo Group, Inc., perform on other government contracts?

Assessing the performance of National Air Cargo Group, Inc. on other government contracts requires access to performance evaluation records, such as the Contractor Performance Assessment Reporting System (CPARS). Without direct access to these records, a definitive evaluation is not possible. However, a review of publicly available contract databases might reveal the number and types of contracts awarded to this company, their value, and any reported issues or commendations. Generally, a history of successful contract completion, timely delivery, and adherence to quality standards indicates a reliable contractor. Conversely, a pattern of disputes, late deliveries, or performance deficiencies would raise concerns about their ability to meet the requirements of this specific $23.4 million contract.

What are the key performance indicators (KPIs) for this scheduled air freight contract?

Key Performance Indicators (KPIs) for a scheduled air freight contract typically revolve around timeliness, reliability, and cargo integrity. For this $23.4 million DoD contract, critical KPIs would likely include on-time pickup and delivery rates, adherence to flight schedules, cargo damage or loss rates, and compliance with all transportation security regulations. The firm fixed-price nature of the contract implies that meeting these KPIs is crucial for the contractor's profitability. The government would monitor these metrics to ensure operational effectiveness and to hold the contractor accountable for performance. Specific targets for these KPIs would be detailed within the contract's statement of work.

What is the typical profit margin for scheduled air freight services provided to the government?

Determining the typical profit margin for scheduled air freight services provided to the government is complex, as it depends on numerous factors including operational efficiency, market competition, contract duration, and specific service requirements. For a firm fixed-price contract like this $23.4 million DoD award, the contractor aims to cover all costs and achieve a profit within the agreed-upon price. Industry averages for logistics and transportation profit margins can range from low single digits to potentially higher percentages for specialized or high-demand services. However, government contracts often involve stringent oversight and potentially lower margins compared to commercial contracts due to competitive bidding processes and specific compliance requirements. Without detailed cost data from the contractor, estimating the exact profit margin is speculative.

Are there any known risks associated with National Air Cargo Group, Inc. or the air freight market that could impact this contract?

Risks associated with National Air Cargo Group, Inc. could include financial stability, operational capacity, and past performance issues, which would ideally be assessed during the pre-award vetting process. For the air freight market, risks are more systemic and include fuel price volatility, geopolitical instability affecting flight routes, air traffic control issues, weather disruptions, and potential labor disputes. For this $23.4 million contract, the firm fixed-price structure places the burden of managing fuel price fluctuations and other operational cost risks primarily on the contractor. However, significant disruptions could still impact service delivery, necessitating government contingency planning and potentially invoking contract clauses related to force majeure.

Industry Classification

NAICS: Transportation and Warehousing › Scheduled Air Transportation › Scheduled Freight Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HTC71109R0022

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: National AIR Cargo, Inc. (UEI: 783730641)

Address: 835 WILLOW RUN AIRPORT, YPSILANTI, MI, 48198

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

Financial Breakdown

Contract Ceiling: $23,444,513

Exercised Options: $23,444,513

Current Obligation: $23,444,513

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71110DW004

IDV Type: IDC

Timeline