DOJ leases aircraft for $30.7M to support US Marshals operations in Arizona

Contract Overview

Contract Amount: $30,686,575 ($30.7M)

Contractor: Sundowner Mesa, LLC

Awarding Agency: Department of Justice

Start Date: 2004-06-17

End Date: 2008-01-07

Contract Duration: 1,299 days

Daily Burn Rate: $23.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: JPATS - AIRCRAFT LEASE FOR MESA AZ

Place of Performance

Location: ARIZONA

State: Arizona Government Spending

Plain-Language Summary

Department of Justice obligated $30.7 million to SUNDOWNER MESA, LLC for work described as: JPATS - AIRCRAFT LEASE FOR MESA AZ Key points: 1. Leasing aircraft offers flexibility compared to outright purchase, potentially reducing long-term capital expenditure. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. The duration of the lease (nearly 4 years) indicates a need for sustained operational support. 4. The fixed-price contract type provides cost certainty for the government. 5. The specific use of aircraft leasing for the US Marshals Service points to specialized transportation needs.

Value Assessment

Rating: fair

The total value of $30.7 million over approximately 3.6 years averages to about $8.5 million annually. Benchmarking this against commercial aircraft leasing rates is challenging without specific aircraft type and usage details. However, the cost appears to be within a reasonable range for specialized government aviation support, though a direct comparison to similar government leases would provide better context.

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 bids. The presence of 3 bids suggests a moderate level of competition for this specialized leasing requirement. While not a large number of bidders, it implies that the market was accessible and that the US Marshals Service sought multiple proposals.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging competitive pricing and potentially leading to better value for the government.

Public Impact

The US Marshals Service benefits from access to necessary aviation assets for its law enforcement and fugitive apprehension missions. This contract supports critical transportation services required for operational effectiveness within Arizona. The lease indirectly supports the workforce by providing the tools needed for mission accomplishment. The geographic impact is focused on Arizona, where the aircraft is based and utilized.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if lease terms are not meticulously managed.
Dependence on a single contractor for a critical asset could pose a risk if the contractor faces financial or operational difficulties.

Positive Signals

Leasing provides flexibility to adapt to changing operational needs without the burden of asset ownership.
The firm fixed-price structure offers budget predictability.
Competition, even with a limited number of bidders, helps ensure a reasonable price.

Sector Analysis

The contract falls within the broader transportation equipment rental and leasing sector, specifically commercial air transportation. This sector is characterized by significant capital investment and specialized operational requirements. Government leasing of aircraft is common for agencies requiring flexible, on-demand aviation support without the long-term commitment of purchasing and maintaining their own fleets.

Small Business Impact

There is no indication that this contract involved small business set-asides. The nature of aircraft leasing often involves large, specialized companies, making it less common for small businesses to be primary awardees unless they are acting as subcontractors or providing niche support services.

Oversight & Accountability

The Department of Justice and the U.S. Marshals Service are responsible for oversight. Contract performance would be monitored through regular reporting, adherence to lease terms, and operational reviews. Transparency is generally maintained through contract databases, though specific operational details may be sensitive.

Related Government Programs

JPATS (Joint Primary Aircraft Training System)
Federal Aviation Administration (FAA) regulations
Department of Homeland Security (DHS) aviation assets

Risk Flags

Contract duration may exceed actual need.
Limited competition could lead to suboptimal pricing.
Lack of specific aircraft details hinders precise value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $30.7 million to SUNDOWNER MESA, LLC. JPATS - AIRCRAFT LEASE FOR MESA AZ

Who is the contractor on this award?

The obligated recipient is SUNDOWNER MESA, LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (U.S. Marshals Service).

What is the total obligated amount?

The obligated amount is $30.7 million.

What is the period of performance?

Start: 2004-06-17. End: 2008-01-07.

What is the specific type of aircraft being leased and its typical operational role for the US Marshals Service?

The provided data does not specify the exact type of aircraft leased under contract number DCA. However, the North American Industry Classification System (NAICS) code 532411, 'Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing,' and the agency (US Marshals Service) suggest it is likely a fixed-wing aircraft or possibly a rotorcraft. These aircraft are typically used by the US Marshals for a variety of missions, including fugitive transportation, witness protection details, surveillance, and rapid deployment of personnel and equipment across the state of Arizona and potentially beyond. The specific role would dictate the aircraft's configuration and operational tempo.

How does the annual cost of this lease compare to purchasing and operating a similar aircraft?

Directly comparing the lease cost to purchasing and operating a similar aircraft is complex without knowing the aircraft type, age, and expected operational hours. However, leasing offers advantages like avoiding large upfront capital outlays, reduced maintenance responsibilities (often included in leases), and flexibility to upgrade or change aircraft types. Purchasing an aircraft involves significant initial investment, ongoing maintenance, insurance, pilot salaries, and potential depreciation. For a nearly 4-year lease at $30.7 million, the annual cost is approximately $8.5 million. This figure needs to be weighed against the total cost of ownership for a comparable asset, considering factors like utilization rates and the government's risk tolerance for asset obsolescence.

What are the potential risks associated with leasing aircraft versus owning them for a federal agency?

Leasing aircraft, while offering flexibility, carries certain risks for federal agencies. A primary risk is the potential for escalating costs over the lease term if not carefully negotiated, especially if usage exceeds standard allowances or if market rates increase significantly. Dependence on a single lessor for a critical asset can create vulnerabilities; if the contractor faces financial distress or operational issues, the agency's mission could be disrupted. Furthermore, lease agreements may have restrictive clauses regarding modifications or usage that could limit operational adaptability. Unlike owned assets, leased equipment does not build equity for the agency, and at the end of the term, the agency has no residual value, requiring a new procurement process.

What does the 'firm fixed price' contract type imply for the government and the contractor?

A 'firm fixed price' (FFP) contract type means that the price is set and not subject to adjustment based on the contractor's cost experience. For the government, this offers the highest level of cost certainty, making budgeting more predictable. The contractor assumes the primary risk for cost overruns; if their expenses exceed the agreed-upon price, their profit margin decreases, or they may incur a loss. Conversely, if the contractor can perform the work for less than the fixed price, their profit increases. This contract type is generally preferred by the government when the scope of work is well-defined and risks can be reasonably assessed beforehand, as is often the case with equipment leasing.

How does the duration of this lease (1299 days) align with typical federal aviation support contracts?

A lease duration of 1299 days, approximately 3.6 years, is a common term for federal aviation support contracts, particularly for leasing rather than purchasing. This timeframe allows agencies to secure necessary assets for a significant period, providing operational stability without the long-term commitment of ownership. It often aligns with strategic planning cycles and budget appropriations. Shorter leases might be used for temporary surge requirements, while longer terms (or purchase options) might be considered for assets with very long expected service lives. This duration suggests a sustained, rather than short-term, need for the leased aircraft by the US Marshals Service.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing

Product/Service Code: MISCELLANEOUS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 4949 HARRISON AVE, ROCKFORD, IL, 17

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $30,686,575

Exercised Options: $30,686,575

Current Obligation: $30,686,575

Timeline