Air Force awards $224.5M contract for aircraft support services, highlighting long-term sustainment needs

Contract Overview

Contract Amount: $224,532,957 ($224.5M)

Contractor: Serv-Air Inc

Awarding Agency: Department of Defense

Start Date: 1996-11-01

End Date: 2005-04-30

Contract Duration: 3,102 days

Daily Burn Rate: $72.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199705!5700!0001!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460194C0950 !A!*!P00039 !19961101!19961031!067280974!001339159!001339159!N!7S976!SERV-AIR INC !300 E AEROBIC LN !GREENVILLE !TX!75402!30920!231!48!GREENVILLE !HUNT !TEXAS !0001!+000017248000!N!N!000000000000!R408!PROGRAM MANAGEMENT/SUPPORT SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3000!NOT DISCERNABLE OR CLASSIFIED !3728!3!*!S!C!B!N!Z!A !N!J!2!002!B!* !A!N!Z!* !* !Y!C!*!A!A!A!A!A!*!* !*!N!A!A!N!*!*!*!*!*!

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $224.5 million to SERV-AIR INC for work described as: 199705!5700!0001!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460194C0950 !A!*!P00039 !19961101!19961031!067280974!001339159!001339159!N!7S976!SERV-AIR INC !300 E AEROBIC LN !GREENVILLE !TX!75402!30920!231!48!GREENVILLE !HUNT … Key points: 1. Contract focuses on program management and support services for aircraft, indicating a need for specialized expertise. 2. The duration of the contract (over 8 years) suggests a long-term commitment to sustainment and operational readiness. 3. Awarded to SERV-AIR INC, a contractor with a significant presence in aircraft services. 4. The contract type (Firm Fixed Price) aims to provide cost certainty for the government. 5. The significant dollar value points to the critical nature of these aircraft support services for the Air Force. 6. The contract was awarded under full and open competition, suggesting a robust bidding process.

Value Assessment

Rating: good

The total value of $224.5 million over approximately 8.5 years averages to about $26.4 million annually. This figure appears reasonable for comprehensive aircraft program management and support services, especially considering the specialized nature of military aviation. Benchmarking against similar long-term sustainment contracts for major weapon systems would provide further context, but the scale suggests a significant investment in maintaining operational readiness.

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. This suggests a competitive environment where multiple companies likely vied for the award. The presence of multiple bidders generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it encourages a wider range of offers, driving down costs through market forces and ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the Department of the Air Force, ensuring the operational readiness and sustainment of its aircraft fleet. Services delivered include program management and support, crucial for the efficient operation and maintenance of aircraft. The geographic impact is likely centered around Air Force bases and operational units requiring these support services. Workforce implications include the potential for job creation within SERV-AIR INC and its subcontractors, particularly in specialized aviation maintenance and management roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in if not managed carefully.
Reliance on a single contractor for critical support services may pose risks if the contractor faces financial or operational difficulties.
The complexity of aircraft support services can make performance monitoring challenging.

Positive Signals

Firm Fixed Price contract structure provides cost predictability.
Full and open competition suggests a competitive award process, likely resulting in a fair price.
The contractor, SERV-AIR INC, has a history in the aviation services sector, implying relevant experience.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance, repair, and overhaul (MRO) services, alongside program management. The market for aircraft sustainment is substantial, driven by the need for continuous operational readiness of military fleets. This contract represents a significant portion of spending dedicated to ensuring the longevity and effectiveness of Air Force aircraft assets.

Small Business Impact

While the contract was awarded under full and open competition, there is no explicit indication of a small business set-aside. However, the prime contractor, SERV-AIR INC, may engage small businesses for subcontracting opportunities to fulfill specific aspects of the support services, contributing to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Air Force. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to successful delivery. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be sensitive.

Related Government Programs

Aircraft Maintenance Services
Logistics Support Services
Defense Program Management
Air Force Sustainment Contracts
Aviation Support Equipment

Risk Flags

Long-term contract duration
High contract value
Reliance on a single contractor for critical services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $224.5 million to SERV-AIR INC. 199705!5700!0001!GD90 !OC-ALC/LKD (CLS AIRCRAFT) !F3460194C0950 !A!*!P00039 !19961101!19961031!067280974!001339159!001339159!N!7S976!SERV-AIR INC !300 E AEROBIC LN !GREENVILLE !TX!75402!30920!231!48!GREENVILLE !HUNT !TEXAS !0001!+000017248000!N!N!000000000000!R408!PROGRAM MANAGEMENT/SUPPORT SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3000!NOT DISCERNABLE OR CLASSIFIED !3728!3!*!S!C!B!N!Z!A !N!J!2!0

Who is the contractor on this award?

The obligated recipient is SERV-AIR INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $224.5 million.

What is the period of performance?

Start: 1996-11-01. End: 2005-04-30.

What is the historical spending trend for similar aircraft support services by the Department of the Air Force?

Analyzing historical spending on aircraft support services by the Department of the Air Force reveals a consistent and significant investment in maintaining fleet readiness. Over the past decade, annual expenditures have fluctuated based on modernization programs, operational tempo, and specific platform needs. Contracts for program management and sustainment services, similar to this award, often span multiple years and represent a substantial portion of the Air Force's maintenance, repair, and overhaul (MRO) budget. For instance, major sustainment contracts for fighter jets, bombers, and transport aircraft can individually reach hundreds of millions or even billions of dollars over their lifecycles. The trend indicates a strategic prioritization of long-term support to maximize aircraft availability and minimize downtime, reflecting the high cost associated with keeping complex aviation systems operational.

How does the awarded price compare to industry benchmarks for similar aircraft support services?

Benchmarking the awarded price of $224.5 million for SERV-AIR INC's aircraft support services against industry standards requires a detailed understanding of the specific services rendered. Generally, firm-fixed-price contracts aim to align with market rates, but the unique requirements of military aviation, including stringent security, specialized personnel, and extensive regulatory compliance, can influence pricing. Industry benchmarks for comprehensive program management and sustainment for large aircraft fleets often consider factors like direct labor rates, overhead, material costs, and profit margins. While specific comparable contract data is often proprietary, the average annual value of approximately $26.4 million for this contract appears within a reasonable range for extensive, long-term support of a significant aircraft component or program. However, a thorough analysis would necessitate comparing the scope, duration, and specific deliverables against publicly available data for similar government or commercial aviation support contracts.

What are the key performance indicators (KPIs) used to evaluate SERV-AIR INC's performance under this contract?

Key Performance Indicators (KPIs) for a contract of this nature, focusing on aircraft program management and support services, are critical for ensuring mission success and value for the Department of the Air Force. While the specific KPIs are detailed within the contract's Performance Work Statement (PWS), common metrics likely include aircraft availability rates, turnaround times for maintenance and repairs, adherence to maintenance schedules, quality of work (e.g., defect rates), cost control, and responsiveness to emergent requirements. For program management, KPIs might encompass budget adherence, schedule compliance for support activities, and effective resource allocation. The firm-fixed-price structure incentivizes the contractor to meet or exceed these KPIs efficiently to maximize profitability, while the government monitors these metrics to ensure operational readiness and prevent cost overruns.

What is the track record of SERV-AIR INC in performing similar government contracts?

SERV-AIR INC has a notable track record in performing government contracts, particularly within the aviation and logistics support sectors. The company has been involved in various service agreements with different branches of the U.S. military, including the Air Force, Army, and Navy. Their experience often encompasses aircraft maintenance, repair, overhaul (MRO), base operations support, and logistics management. Publicly available contract databases show a history of awards for services related to aircraft sustainment and operational support. While specific performance ratings for past contracts are not always publicly disclosed, the continued award of significant contracts suggests a level of satisfaction and capability in meeting government requirements. Analyzing past performance data, if available through sources like the Contractor Performance Assessment Reporting System (CPARS), would provide a more granular view of their reliability and quality of service.

What are the potential risks associated with the long duration and significant value of this contract?

The long duration (over 8 years) and substantial value ($224.5 million) of this contract present several potential risks. Firstly, there's the risk of 'vendor lock-in,' where the government becomes heavily reliant on SERV-AIR INC, potentially limiting future flexibility or the ability to adopt newer technologies or more cost-effective solutions if they emerge. Secondly, the extended timeframe increases the possibility of unforeseen economic shifts, inflation, or changes in operational requirements that could impact the contract's cost-effectiveness or relevance. Thirdly, a single point of failure exists; if SERV-AIR INC experiences significant financial distress, management issues, or operational failures, it could severely disrupt critical Air Force operations. Finally, the sheer scale necessitates robust oversight to ensure continued value and prevent potential cost creep or performance degradation over the contract's lifecycle.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 300 E AEROBIC LN, GREENVILLE, TX, 03

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline