DoD's $14.2M CV-22 maintenance contract awarded to Bering Straits Aerospace Services raises questions on competition and value

Contract Overview

Contract Amount: $14,217,426 ($14.2M)

Contractor: Bering Straits Aerospace Services, LLC

Awarding Agency: Department of Defense

Start Date: 2008-09-30

End Date: 2012-03-31

Contract Duration: 1,278 days

Daily Burn Rate: $11.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CV-22 CONTRACT MAINTENANCE SUPPORT FOR HURLBURT FIELD, FL AND KIRTLAND AFB, NM.

Place of Performance

Location: HURLBURT FIELD, OKALOOSA County, FLORIDA, 32544

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $14.2 million to BERING STRAITS AEROSPACE SERVICES, LLC for work described as: CV-22 CONTRACT MAINTENANCE SUPPORT FOR HURLBURT FIELD, FL AND KIRTLAND AFB, NM. Key points: 1. The contract's value of $14.2 million over its duration suggests a significant investment in specialized aircraft support. 2. Awarded as 'Not Available for Competition,' this contract bypasses standard competitive bidding processes, potentially impacting price discovery. 3. The firm-fixed-price contract type aims to control costs, but the lack of competition may limit downward pressure on pricing. 4. Performance context is limited without specific metrics, but the duration of over 3 years indicates a sustained need for these services. 5. The contract falls under 'Other Support Activities for Air Transportation,' a niche sector requiring specialized technical expertise. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to boost small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this $14.2 million contract is challenging without detailed performance data or comparable contract information. The firm-fixed-price structure is a positive indicator for cost control. However, the lack of competition means there's no direct market comparison to assess if the pricing is optimal. The duration of the contract (over 3 years) suggests a substantial and ongoing need, but without performance metrics, it's difficult to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'Not Available for Competition' justification, indicating that a full and open competition was not pursued. This typically occurs when only one source is capable of meeting the government's needs. The lack of multiple bidders means there was no competitive pressure to drive down prices or encourage innovative solutions. This approach can be justified in specific circumstances but warrants scrutiny regarding its necessity and potential impact on cost.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. The government may be paying a premium because potential cost savings from competition were forgone.

Public Impact

The primary beneficiaries are the Department of the Air Force and military personnel relying on the CV-22 Osprey aircraft for critical missions. Services delivered include essential maintenance and support activities crucial for the operational readiness of the CV-22 fleet. The contract supports operations at Hurlburt Field, Florida, and Kirtland Air Force Base, New Mexico, impacting readiness at these key installations. The contract likely supports a specialized workforce of technicians and mechanics, contributing to employment in aerospace support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Limited transparency into the justification for sole-source award.
Performance metrics are not readily available to assess effectiveness.
Potential for contractor lock-in due to specialized nature of services.

Positive Signals

Firm-fixed-price contract type helps manage cost certainty.
Award to an established entity suggests capability to perform specialized tasks.
Sustained contract duration indicates a recognized need for the services.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on specialized maintenance and support for military aircraft. The CV-22 Osprey is a unique tiltrotor aircraft, requiring highly specialized technical skills and knowledge for its upkeep. The market for such specialized support is often limited, potentially justifying less competitive solicitations. Comparable spending benchmarks would likely be found within other high-value, specialized military aircraft maintenance contracts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contractor, Bering Straits Aerospace Services, LLC, is likely not a small business, or if it is, the contract was not awarded under a small business set-aside program. There is no information provided on subcontracting plans, so the impact on the small business ecosystem is unclear, but it's unlikely to have a direct positive impact through set-aside provisions.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, a component of the Department of Defense. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specific services for an agreed-upon price. Transparency is limited by the sole-source award justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

CV-22 Osprey Program Support
Air Force Aircraft Maintenance Contracts
Specialized Aerospace Services
Department of Defense Aviation Support

Risk Flags

Sole-source award lacks competitive pricing.
Limited public data on performance metrics.
Justification for 'Not Available for Competition' requires scrutiny.
Potential for higher costs due to lack of market pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.2 million to BERING STRAITS AEROSPACE SERVICES, LLC. CV-22 CONTRACT MAINTENANCE SUPPORT FOR HURLBURT FIELD, FL AND KIRTLAND AFB, NM.

Who is the contractor on this award?

The obligated recipient is BERING STRAITS AEROSPACE SERVICES, LLC.

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 $14.2 million.

What is the period of performance?

Start: 2008-09-30. End: 2012-03-31.

What is the track record of Bering Straits Aerospace Services, LLC in performing similar government contracts?

Bering Straits Aerospace Services, LLC has a history of performing government contracts, particularly within the defense and aerospace sectors. While specific details on their performance for this particular CV-22 maintenance contract are not provided in the summary data, their ability to secure this sole-source award suggests they possess the specialized capabilities required. A deeper dive into their contract history, including past performance evaluations and any reported issues on previous awards, would be necessary for a comprehensive assessment of their track record. This would involve reviewing contract databases and agency performance reports to understand their reliability and quality of service delivery across various projects.

How does the cost of this contract compare to similar maintenance contracts for specialized military aircraft?

Direct cost comparison is difficult without access to detailed pricing structures and performance metrics for comparable contracts. The $14.2 million total value over approximately 3.5 years (1278 days) averages around $3.26 million per year. However, this figure represents the total contract value and doesn't break down per-unit costs or specific service rates. The 'Not Available for Competition' status further complicates benchmarking, as competitive bids often drive prices down. To make a meaningful comparison, one would need to identify contracts for maintenance of similarly complex aircraft (e.g., other tiltrotors, advanced helicopters, or specialized fixed-wing aircraft) awarded through full and open competition, and then analyze their total value, duration, scope of work, and pricing models.

What are the primary risks associated with a sole-source award for critical aircraft maintenance?

The primary risks associated with a sole-source award for critical aircraft maintenance include potential overpricing due to the lack of competitive pressure, reduced incentive for innovation, and a higher risk of contractor complacency. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, the government becomes heavily reliant on a single provider, creating a risk of service disruption if the contractor faces financial difficulties, operational issues, or decides to exit the market. Without competition, there's also less transparency into the necessity and justification of the sole-source award itself, potentially masking inefficiencies or suboptimal resource allocation.

How effective is the firm-fixed-price contract type in ensuring value for money in this context?

The firm-fixed-price (FFP) contract type is generally effective in providing cost certainty for the government, as the price is set regardless of the contractor's actual costs. This shifts the risk of cost overruns to the contractor. In the context of specialized aircraft maintenance, where the scope of work can be well-defined, FFP can be a good choice for controlling expenditures. However, its effectiveness in ensuring 'value for money' is diminished when awarded on a sole-source basis. While the government knows the total price, the lack of competition means there's no assurance that this price represents the best market value achievable. The contractor has less incentive to find cost efficiencies if they are guaranteed a fixed profit margin.

What is the historical spending pattern for CV-22 contract maintenance support at Hurlburt Field and Kirtland AFB?

The provided data represents a single contract award of $14.2 million for CV-22 contract maintenance support at Hurlburt Field and Kirtland AFB, spanning from September 30, 2008, to March 31, 2012. This specific data point does not reveal historical spending patterns. To understand historical spending, one would need to examine all previous contracts awarded for CV-22 maintenance at these locations, or for similar support across the Air Force, over a longer period. Analyzing trends in contract values, durations, award types (competitive vs. sole-source), and contractor performance would be necessary to identify patterns and assess changes in spending over time.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA002108R0014

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4600 DEBARR RD STE 200, ANCHORAGE, AK, 00

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,115,337

Exercised Options: $14,217,426

Current Obligation: $14,217,426

Contract Characteristics

Cost or Pricing Data: YES

Timeline