DoD's $23.8M air cargo contract awarded to National Air Cargo Group, Inc. for freight transportation

Contract Overview

Contract Amount: $23,776,454 ($23.8M)

Contractor: National AIR Cargo Group, Inc

Awarding Agency: Department of Defense

Start Date: 2011-11-30

End Date: 2011-11-30

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS

Plain-Language Summary

Department of Defense obligated $23.8 million to NATIONAL AIR CARGO GROUP, INC for work described as: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS Key points: 1. The contract value represents a significant investment in ensuring efficient and reliable air cargo delivery for military operations. 2. Competition dynamics for this contract are crucial for ensuring cost-effectiveness and service quality in a critical logistics sector. 3. Risk indicators may include potential delays, cost overruns, or service disruptions, which require robust oversight. 4. Performance context is vital, as timely and secure delivery of goods directly impacts operational readiness and mission success. 5. This contract positions the Department of Defense within the broader air cargo and logistics sector, highlighting its reliance on specialized providers.

Value Assessment

Rating: good

While specific pricing benchmarks for this exact service are not provided, the contract value of $23.8 million for consolidated transportation shipments suggests a substantial service agreement. Benchmarking against similar large-scale military logistics contracts would be necessary for a precise value-for-money assessment. However, the firm fixed-price structure generally indicates a predictable cost for the government, assuming performance is met.

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 offers. This approach typically fosters a competitive environment, encouraging multiple bidders to vie for the contract. The presence of 9 bidders suggests a healthy level of interest and competition for this service, which can lead to more favorable pricing and service terms for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the best value available. A competitive process reduces the likelihood of inflated costs and encourages innovation among service providers.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential air cargo transportation services. Services delivered include the consolidation and shipment of goods via scheduled air freight, supporting military logistics. The geographic impact is likely global, given the nature of military operations and the need for worldwide cargo movement. Workforce implications may involve support for military personnel and civilian logistics staff involved in managing and receiving shipments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service disruptions if the contractor faces operational challenges.
Ensuring consistent adherence to delivery schedules across diverse operational environments.
Monitoring contractor performance to guarantee compliance with all contractual obligations.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm fixed-price contract type provides cost certainty for the government.
Multiple bidders (9) suggest a competitive market for these services.

Sector Analysis

The air cargo and logistics sector is a critical component of global supply chains, supporting both commercial and governmental needs. This contract falls within the broader transportation and logistics services industry, which is characterized by significant infrastructure investment and complex operational requirements. The market size for defense-related logistics is substantial, with agencies like USTRANSCOM managing vast networks to ensure global reach and operational readiness. Benchmarks for similar large-scale freight contracts often involve millions of dollars, reflecting the scale and importance of these services.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Analysis of subcontracting opportunities for small businesses would require further investigation into the contractor's specific subcontracting plan, if one exists. Without this information, the direct impact on the small business ecosystem remains unclear, though large prime contracts can sometimes create indirect opportunities through the supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of Defense, likely USTRANSCOM. Accountability measures are embedded in the firm fixed-price contract terms, with penalties or remedies for non-performance. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed oversight reports may not always be publicly accessible.

Related Government Programs

Military Sealift Command Contracts
Defense Logistics Agency Contracts
Air Mobility Command Contracts
Global Freight Forwarding Services
Expedited Freight Services

Risk Flags

Performance Risk
Supply Chain Disruption Risk
Cost Overrun Risk (if not managed tightly)
Security Risk (cargo integrity)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.8 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 $23.8 million.

What is the period of performance?

Start: 2011-11-30. End: 2011-11-30.

What is the historical spending pattern for consolidated transportation shipments by the Department of Defense under similar contracts?

Analyzing historical spending for consolidated transportation shipments by the Department of Defense requires access to detailed contract databases beyond the scope of this single award. However, USTRANSCOM, the awarding agency, consistently manages significant budgets for global logistics and transportation. Past awards for similar services, especially those involving scheduled air freight, often run into tens or hundreds of millions of dollars annually, reflecting the continuous need for rapid deployment and sustainment of forces worldwide. Fluctuations in spending can be influenced by geopolitical events, changes in operational tempo, and shifts in strategic priorities, necessitating ongoing investment in robust air cargo capabilities.

How does the awarded price compare to market rates for similar air cargo services?

A precise comparison of the awarded price to market rates for similar air cargo services is challenging without detailed service specifications, origin-destination pairs, and specific cargo types. The $23.8 million contract value is for consolidated transportation shipments, which implies a range of services and potentially varied routes. Market rates in the air cargo industry are highly dynamic, influenced by fuel costs, demand, capacity, and urgency. However, given the firm fixed-price nature and the competitive bidding process involving 9 bidders, it suggests the price is likely within a reasonable range for the scope of services provided to the Department of Defense. Further analysis would require benchmarking against commercial freight forwarder rates for comparable volumes and service levels.

What are the key performance indicators (KPIs) used to evaluate National Air Cargo Group, Inc.'s performance under this contract?

Key performance indicators (KPIs) for a contract of this nature typically focus on critical aspects of air cargo delivery. These often include on-time pickup and delivery rates, transit time adherence, cargo damage or loss rates, and compliance with security protocols. For consolidated shipments, tracking the efficiency of consolidation and the accuracy of documentation are also crucial. The Department of Defense would likely monitor these KPIs closely to ensure operational readiness and cost-effectiveness. Failure to meet established KPIs could result in penalties or impact future contract awards, underscoring the importance of robust performance management by the government.

What is the track record of National Air Cargo Group, Inc. with government contracts, particularly with the Department of Defense?

National Air Cargo Group, Inc. has a history of performing government contracts, including those with the Department of Defense. Their experience often involves providing air cargo and logistics services, sometimes on a global scale. Reviewing their past performance records, such as those available through the Federal Procurement Data System (FPDS) or other government contract databases, can provide insights into their reliability, past performance ratings, and any history of disputes or contract modifications. A strong track record with similar agencies and contract types generally indicates a lower risk profile for new awards.

What are the potential risks associated with relying on a single contractor for consolidated transportation shipments?

While this contract was awarded under full and open competition, the execution phase involves a single prime contractor, National Air Cargo Group, Inc. Potential risks include service disruptions due to the contractor's operational issues, financial instability, or unforeseen global events impacting their capacity. Over-reliance on one provider can also limit flexibility and bargaining power in the long term. Mitigation strategies typically involve robust contract oversight, clear performance standards, contingency planning, and potentially maintaining relationships with alternative providers for critical surge requirements.

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: $23,776,454

Exercised Options: $23,776,454

Current Obligation: $23,776,454

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71110DW004

IDV Type: IDC

Timeline