Vertex Aerospace awarded $100.6M for KC-10 Airframe CLS, with a significant portion allocated to support activities

Contract Overview

Contract Amount: $100,602,852 ($100.6M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2020-03-29

End Date: 2020-09-30

Contract Duration: 185 days

Daily Burn Rate: $543.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC-10 AIRFRAME CLS

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $100.6 million to VERTEX AEROSPACE LLC for work described as: KC-10 AIRFRAME CLS Key points: 1. Contract value represents a substantial investment in maintaining the KC-10 fleet's airworthiness. 2. The fixed-price nature of the contract aims to control costs and provide predictability. 3. Competition dynamics for this contract are crucial for ensuring fair pricing and optimal resource allocation. 4. Performance context suggests a focus on timely delivery and adherence to stringent aerospace standards. 5. Sector positioning highlights the critical role of specialized aerospace support in national defense. 6. Risk indicators may include potential supply chain disruptions or unforeseen technical challenges. 7. The contract's duration and scope require robust oversight to ensure value for money.

Value Assessment

Rating: good

The contract value of $100.6 million for KC-10 Airframe CLS appears reasonable given the specialized nature of aerospace sustainment. Benchmarking against similar contracts for fleet support requires access to proprietary data, but the firm fixed-price structure suggests an effort to manage costs effectively. The award to Vertex Aerospace, a known entity in aerospace services, indicates a level of confidence in their capabilities. The provided data does not allow for a direct per-unit cost comparison, but the overall value is consistent with the complexity of maintaining aging military aircraft.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but this competitive approach is generally expected to foster price discovery and encourage contractors to offer their best terms. The agency's decision to use full and open competition suggests a belief that a robust market exists for these services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of innovative solutions, ultimately maximizing the value of federal spending.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the KC-10 Extender aircraft, ensuring their continued operational readiness. Services delivered include essential airframe sustainment and support activities, crucial for flight safety and mission capability. The geographic impact is likely concentrated around bases where KC-10s are stationed and where Vertex Aerospace has operational facilities. Workforce implications include the potential for skilled aerospace technicians and support staff to be employed by Vertex Aerospace and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical issues arise beyond the scope of the fixed-price agreement.
Dependence on a single contractor for critical airframe sustainment could pose a risk if performance falters.
Supply chain vulnerabilities for specialized aircraft parts could lead to delays and increased costs.

Positive Signals

Firm fixed-price contract structure provides cost certainty for the government.
Award to an established aerospace support company suggests a higher likelihood of successful performance.
Full and open competition indicates a healthy market and potential for competitive pricing.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technological requirements, and significant government investment. This contract falls within the aircraft maintenance, repair, and overhaul (MRO) sub-sector, which is critical for sustaining military aviation fleets. Spending in this area is often substantial due to the long service lives of military aircraft and the need for specialized expertise. Comparable spending benchmarks would typically involve analyzing other large sustainment contracts for similar aircraft types within the Department of Defense.

Small Business Impact

The data indicates that small business participation was not a primary set-aside component for this specific contract (ss: false, sb: false). While Vertex Aerospace LLC is the prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on Vertex Aerospace's own procurement practices and the availability of qualified small business suppliers for specific components or services required for the KC-10 sustainment.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the firm fixed-price contract terms, linking payment to successful delivery of services. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

KC-10 Sustainment Programs
Airframe Maintenance Contracts
Aerospace Logistics Support
Defense Contract Management
Military Aircraft Overhaul

Risk Flags

Aging Aircraft Fleet
Supply Chain Dependency
Contractor Performance Risk
Potential for Cost Overruns (if scope changes)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $100.6 million to VERTEX AEROSPACE LLC. KC-10 AIRFRAME CLS

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $100.6 million.

What is the period of performance?

Start: 2020-03-29. End: 2020-09-30.

What is Vertex Aerospace LLC's track record with similar Department of Defense sustainment contracts?

Vertex Aerospace LLC has a history of providing aviation maintenance, repair, and overhaul (MRO) services to various government entities. While specific details on all past contracts are not provided here, their involvement in supporting military aircraft suggests experience with the rigorous demands of defense logistics. Their ability to secure a significant contract like the KC-10 Airframe CLS indicates a level of established capability and past performance that met the DoD's evaluation criteria. Further analysis would involve examining their performance history on other large-scale sustainment contracts, including on-time delivery rates, quality metrics, and any past performance issues or commendations.

How does the $100.6 million contract value compare to historical spending on KC-10 sustainment?

To accurately compare this $100.6 million contract value to historical spending on KC-10 sustainment, one would need access to historical contract data for the KC-10 program. This would involve identifying previous contracts for airframe sustainment, depot maintenance, and related support services awarded over the lifespan of the KC-10 fleet. Factors such as inflation, changes in operational tempo, and evolving maintenance requirements would need to be considered for a meaningful comparison. Without this historical data, it is difficult to definitively state whether this award represents an increase, decrease, or stable level of spending compared to past periods.

What are the primary risk indicators associated with this specific KC-10 Airframe CLS contract?

The primary risk indicators for this KC-10 Airframe CLS contract include the aging nature of the KC-10 fleet, which may necessitate more complex and costly repairs. Dependence on a single contractor, even with full and open competition for the award, can pose a risk if performance issues arise or if the contractor faces financial instability. Supply chain disruptions for specialized aircraft parts are another significant risk, potentially leading to delays and cost increases. Furthermore, the firm fixed-price nature, while beneficial for cost control, could incentivize the contractor to cut corners on quality if not adequately monitored, although the contract's duration and scope suggest a need for robust oversight to mitigate this.

How effective is the firm fixed-price (FFP) contract type in ensuring program effectiveness for aerospace sustainment?

The firm fixed-price (FFP) contract type is generally considered effective for ensuring program effectiveness in aerospace sustainment when the scope of work is well-defined and risks are understood. It places the primary cost risk on the contractor, incentivizing them to manage resources efficiently and deliver services within the agreed-upon budget. This can lead to greater cost certainty for the government and encourage contractors to focus on timely and quality delivery to maximize profit. However, for complex sustainment programs involving aging aircraft, unforeseen technical challenges can arise. In such cases, an FFP contract might limit the government's flexibility to adapt to evolving needs or require costly change orders if the contractor cannot absorb unexpected costs, potentially impacting overall program effectiveness if not managed carefully.

What is the typical market size for aerospace sustainment services supporting legacy military aircraft fleets?

The market size for aerospace sustainment services supporting legacy military aircraft fleets is substantial and represents a critical segment of the broader aerospace and defense industry. This market encompasses a wide range of services, including depot-level maintenance, component repair, logistics support, and modifications. While precise figures for the legacy aircraft sustainment market alone are difficult to isolate, the global military MRO market is valued in the tens of billions of dollars annually. Contracts for individual aircraft types, especially those with extensive operational histories like the KC-10, can individually be worth hundreds of millions or even billions over their service life, reflecting the ongoing need for specialized support to maintain readiness.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110

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

Financial Breakdown

Contract Ceiling: $100,602,852

Exercised Options: $100,602,852

Current Obligation: $100,602,852

Actual Outlays: $29,593,306

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810516D0003

IDV Type: IDC

Timeline