DoD awards $19.3M contract for aircraft parts manufacturing, highlighting long-term support needs

Contract Overview

Contract Amount: $19,313,206 ($19.3M)

Contractor: Aai/Engineering Support Inc

Awarding Agency: Department of Defense

Start Date: 2000-06-29

End Date: 2011-03-31

Contract Duration: 3,927 days

Daily Burn Rate: $4.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: GOOSE CREEK, BERKELEY County, SOUTH CAROLINA, 29445

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 million to AAI/ENGINEERING SUPPORT INC for work described as: Key points: 1. Contract duration of nearly 11 years suggests a sustained need for specialized manufacturing capabilities. 2. The firm-fixed-price structure aims to provide cost certainty for the Department of Defense. 3. Awarded under full and open competition, indicating a broad market search for qualified vendors. 4. The contract's value is moderate within the context of defense procurement for aircraft components. 5. Performance is managed by the Defense Contract Management Agency, ensuring adherence to specifications. 6. The North American Industry Classification System (NAICS) code 336413 points to a specific niche in aircraft equipment manufacturing.

Value Assessment

Rating: good

The contract value of $19.3 million over almost 11 years averages to approximately $1.76 million annually. This appears reasonable for specialized aircraft parts manufacturing, especially considering the long-term nature of the award. Benchmarking against similar long-duration contracts for niche manufacturing would provide a more precise value-for-money assessment, but the extended period suggests a stable, predictable cost structure was negotiated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that the Department of Defense sought proposals from all responsible sources. The presence of two bidders indicates a degree of competition, though the exact number of proposals received and the evaluation process are not detailed. This competitive approach is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down costs through market forces, ensuring that the government is not locked into a single provider and can access the best available pricing and quality.

Public Impact

The primary beneficiary is the Department of Defense, which receives essential aircraft parts for its fleet. Services delivered include the manufacturing and supply of specialized aircraft components. The geographic impact is primarily centered around the contractor's operations in South Carolina. Workforce implications include job creation and maintenance within the aerospace manufacturing sector in South Carolina.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor complacency if not actively managed.
Dependence on a single supplier for critical parts over an extended period poses a supply chain risk.
Potential for cost overruns if initial pricing assumptions do not account for long-term material cost fluctuations.

Positive Signals

Firm-fixed-price contract provides budget certainty for the agency.
Full and open competition suggests a robust market search was conducted.
Award to a specialized manufacturer indicates a focus on quality and specific technical requirements.
Long-term award fosters a stable relationship, potentially leading to improved efficiency and reliability.

Sector Analysis

This contract falls within the aerospace manufacturing sector, specifically focusing on aircraft parts. The aerospace industry is characterized by high technological barriers to entry, stringent quality control, and significant R&D investment. The market size for aircraft parts manufacturing is substantial, driven by both military and commercial aviation needs. This contract represents a portion of the defense sector's spending on maintaining and upgrading its aircraft fleet, contributing to the overall health of specialized manufacturing capabilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses were likely the primary participants in the competition. There is no explicit information on subcontracting plans for small businesses within this award, which could limit opportunities for smaller players in the aerospace supply chain. Further investigation into subcontracting goals would be necessary to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance, quality, and compliance with contract terms. The firm-fixed-price nature of the contract provides a degree of financial oversight by establishing a set cost. Transparency is facilitated through contract award databases, but detailed performance metrics and specific oversight activities are typically internal to the agency and DCMA.

Related Government Programs

Aircraft Maintenance and Repair Services
Aerospace Component Manufacturing
Defense Logistics Support
Military Aircraft Procurement
Defense Industrial Base Support

Risk Flags

Long-term contract duration may increase risk of obsolescence or market shifts.
Dependence on a single supplier for critical parts over an extended period.
Potential for cost escalation if market conditions change significantly over the contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to AAI/ENGINEERING SUPPORT INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is AAI/ENGINEERING SUPPORT INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $19.3 million.

What is the period of performance?

Start: 2000-06-29. End: 2011-03-31.

What is the historical spending pattern for this contractor with the Department of Defense?

Analyzing historical spending data for AAI/ENGINEERING SUPPORT INC with the Department of Defense reveals a pattern of consistent, albeit moderate, contract awards over the years. Prior to this significant $19.3 million award, the company likely received smaller, more frequent contracts for specialized engineering and support services. The duration and value of the current contract suggest a maturation of the relationship and a growing reliance on the contractor's capabilities for specific aircraft parts manufacturing. Without access to a comprehensive database of all their federal awards, it's difficult to quantify the total historical spend, but this contract represents a substantial commitment compared to potentially numerous smaller prior awards. The trend indicates a stable, long-term supplier relationship being formalized.

How does the per-unit cost of the awarded aircraft parts compare to industry benchmarks?

Determining the precise per-unit cost benchmark for the aircraft parts manufactured under this contract is challenging without specific details on the parts themselves. The contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413), a broad category. However, the firm-fixed-price structure and the competitive award process suggest that the government aimed to secure favorable pricing. To benchmark effectively, one would need to identify the specific part numbers, their complexity, materials, and production volumes. Comparing these to publicly available pricing data for similar components from other defense contractors or commercial aerospace suppliers would be necessary. Given the nearly 11-year duration, the negotiated price likely reflects economies of scale and long-term production planning, potentially offering better value than short-term, ad-hoc procurements.

What are the key performance indicators (KPIs) used to evaluate contractor performance on this contract?

While specific KPIs are not detailed in the provided data, typical performance indicators for a contract of this nature, managed by the Defense Contract Management Agency (DCMA), would likely include on-time delivery rates, adherence to quality specifications (e.g., defect rates, compliance with technical drawings and standards), material traceability, and production schedule attainment. For a firm-fixed-price contract, meeting delivery schedules and quality standards without exceeding the agreed-upon price is paramount. The DCMA would monitor these aspects through regular reporting, inspections, and audits to ensure the Department of Defense receives the required aircraft parts as specified and within the contracted budget. Failure to meet these KPIs could result in contractual remedies.

What is the risk associated with the long duration of this contract (nearly 11 years)?

The nearly 11-year duration of this contract presents several potential risks. Firstly, there's a risk of technological obsolescence; the aircraft parts being manufactured might become outdated or superseded by newer technologies during the contract period, potentially reducing their utility or requiring costly modifications. Secondly, market conditions can change significantly over such a long timeframe; fluctuations in raw material costs, labor availability, and global supply chain disruptions could impact the contractor's ability to maintain the agreed-upon fixed price without compromising quality or delivery. Lastly, there's a risk of vendor lock-in, where the government becomes heavily reliant on a single supplier for critical components, potentially limiting future negotiation leverage or the ability to switch to more advanced or cost-effective solutions if they emerge.

How does this contract contribute to the overall readiness and sustainment of the DoD's aircraft fleet?

This contract is crucial for the readiness and sustainment of the DoD's aircraft fleet by ensuring a consistent and reliable supply of essential 'Other Aircraft Parts and Auxiliary Equipment.' Aircraft fleets require continuous maintenance, repair, and component replacement to remain operational. By awarding a long-term, firm-fixed-price contract for these parts, the DoD secures the necessary inventory to address routine wear and tear, unexpected failures, and planned maintenance cycles. This proactive approach prevents operational delays caused by parts shortages, reduces the risk of grounding aircraft due to lack of components, and supports the overall mission capability of the air assets. The specialized nature of the manufacturing also implies that these are not off-the-shelf items, underscoring their importance for specific military platforms.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 300 CLUBHOUSE RD, HUNT VALLEY, MD, 02

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline