Nearly $174M for air transport services, awarded without competition, raises value concerns

Contract Overview

Contract Amount: $173,618,452 ($173.6M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Agency for International Development

Start Date: 2010-01-01

End Date: 2013-03-31

Contract Duration: 1,185 days

Daily Burn Rate: $146.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Transportation

Official Description: OVERSEAS CONTRACT

Plain-Language Summary

Agency for International Development obligated $173.6 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: OVERSEAS CONTRACT Key points: 1. Significant contract value awarded through non-competitive means. 2. Lack of competition may have led to suboptimal pricing. 3. Contract duration of nearly four years suggests long-term reliance. 4. Awarded for scheduled passenger air transportation, a potentially commoditized service. 5. No small business set-aside, indicating potential missed opportunities for smaller firms. 6. Contract type is Time and Materials, which can increase cost uncertainty.

Value Assessment

Rating: questionable

The contract's value of approximately $174 million for scheduled passenger air transportation, awarded on a non-competitive basis, warrants scrutiny. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The Time and Materials (T&M) contract type, coupled with a nearly four-year duration, presents a risk of cost overruns and may not represent the best value for the government. Further analysis would be needed to determine if the pricing was reasonable given the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. This approach limits the opportunity for multiple vendors to bid, potentially leading to higher prices and reduced innovation. The absence of competition means there is no direct market comparison to assess if the selected vendor offered the most cost-effective solution.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure to drive down costs. The government missed an opportunity to leverage market forces for better pricing.

Public Impact

Provides essential scheduled passenger air transportation services. Benefits personnel requiring travel, likely for official government business. Geographic impact is not specified but likely covers routes serviced by the contractor. Workforce implications are tied to the contractor's operational needs for providing air transport.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a substantial contract value.
Time and Materials contract type can lead to cost escalation.
No clear justification for sole-source award provided in the data.
Potential for uncompetitive pricing due to absence of bidding.

Positive Signals

Contract provided essential air transportation services.
Awarded to a single entity, potentially simplifying administration.
Contract duration indicates a stable service provision over several years.

Sector Analysis

The contract falls within the Transportation and Logistics sector, specifically focusing on air passenger services. The market for scheduled air transportation is generally competitive, with numerous airlines operating domestic and international routes. Awarding such a contract on a sole-source basis is unusual in a sector with many potential providers, suggesting specific circumstances or a lack of available alternatives at the time of award.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it specify any subcontracting requirements for small businesses. This suggests that the primary awardee is likely a larger entity, and opportunities for small businesses to participate in this specific contract may have been limited.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. However, as a federal contract, it would typically be subject to agency-level oversight, performance monitoring, and potentially audits by the Inspector General. The lack of competition and T&M structure would likely warrant closer scrutiny of expenditures and performance.

Related Government Programs

Government Travel Services
Logistics and Transportation Contracts
Agency for International Development Operations

Risk Flags

Non-competitive award for a large-value contract
Use of Time and Materials contract type
Lack of transparency regarding justification for sole-source award
Potential for uncompetitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $173.6 million to DOMESTIC AWARDEES (UNDISCLOSED). OVERSEAS CONTRACT

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $173.6 million.

What is the period of performance?

Start: 2010-01-01. End: 2013-03-31.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. However, the specific justification for this non-competitive award is not detailed. Typically, sole-source awards are justified under circumstances such as only one responsible source being available, or an urgent need that precludes full and open competition. Without further documentation from the Agency for International Development (USAID), the precise reason for bypassing the competitive bidding process remains unknown. This lack of transparency can raise concerns about whether the government obtained the best possible value.

How does the Time and Materials (T&M) contract type impact cost control for this air transportation service?

The Time and Materials (T&M) contract type, used for this nearly $174 million air transportation contract, is generally considered less favorable for cost control compared to fixed-price contracts. In a T&M arrangement, the government pays the contractor for the actual labor hours expended and the cost of materials used, plus a fixed fee or profit. This structure places the risk of cost overruns primarily on the government. For scheduled air transportation, where costs can be influenced by fuel prices, operational efficiency, and demand, a T&M contract could lead to significantly higher expenditures than initially anticipated if not managed very closely. Robust oversight and detailed reporting of hours and materials are crucial to mitigate this risk.

What is the typical market rate or benchmark for scheduled passenger air transportation services of this scale?

Benchmarking the cost of scheduled passenger air transportation services for a contract of this scale ($174 million over approximately 3 years) is complex without specific route information, passenger volume, and service level agreements. However, the air transportation market is generally characterized by competitive pricing among airlines. Awarding such a significant contract on a sole-source basis, especially for a service that is often commoditized, suggests a potential deviation from market norms. Industry standard pricing would typically be derived from published fares, volume discounts negotiated with carriers, or competitive bids from multiple air charter or scheduled service providers. The absence of such competitive data for this contract makes a precise benchmark difficult.

What are the potential risks associated with a nearly four-year duration for a sole-source air transportation contract?

A nearly four-year duration (1185 days) for a sole-source contract, particularly for scheduled passenger air transportation, carries several risks. Firstly, it locks the government into a single provider for an extended period, limiting flexibility to adapt to changing travel needs or to take advantage of potentially better market offerings that may emerge. Secondly, the longer duration increases the exposure to price volatility, especially concerning fuel costs, which can significantly impact air travel expenses. Thirdly, without ongoing competition, there's a reduced incentive for the contractor to maintain optimal efficiency or offer cost savings over time. Finally, the prolonged commitment without competitive validation raises concerns about sustained value for taxpayer money.

Were there any performance issues or track record concerns with the contractor that might have led to a sole-source award?

The provided data does not contain information regarding the contractor's track record or any specific performance issues that might have influenced the decision for a sole-source award. Sole-source justifications typically focus on the availability of a unique capability, urgent needs, or lack of other responsible sources, rather than contractor performance issues that might preclude competition. If the award was made due to past performance, that information would usually be part of the justification documentation, which is not available here. Therefore, based solely on the provided data, we cannot determine if contractor history played a role in the non-competitive nature of this award.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

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

Financial Breakdown

Contract Ceiling: $183,958,177

Exercised Options: $183,958,177

Current Obligation: $173,618,452

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline