Vertex Aerospace awarded $52M for T-1A aircraft hail damage repair, a sole-source contract

Contract Overview

Contract Amount: $51,992,722 ($52.0M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2017-10-03

End Date: 2020-12-31

Contract Duration: 1,185 days

Daily Burn Rate: $43.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HAIL DAMAGE REPAIR SERVICE FOR THE T-1A AIRCRAFT

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $52.0 million to VERTEX AEROSPACE LLC for work described as: HAIL DAMAGE REPAIR SERVICE FOR THE T-1A AIRCRAFT Key points: 1. The contract's value of $52 million for aircraft hail damage repair indicates a significant investment in fleet readiness. 2. The sole-source nature of this award warrants scrutiny regarding the justification for limited competition. 3. The duration of the contract (1185 days) suggests a long-term need for specialized repair services. 4. The firm-fixed-price structure aims to provide cost certainty for the government. 5. The absence of small business set-asides or subcontracting plans may limit opportunities for smaller enterprises. 6. The contract's focus on a specific aircraft type (T-1A) highlights specialized maintenance requirements within the Air Force.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific service requirement. Without comparable sole-source awards for similar aircraft hail damage repair, it's difficult to definitively assess if the $52 million represents optimal value. The firm-fixed-price contract type suggests an attempt to control costs, but the lack of competitive bidding means the government did not benefit from price discovery through market competition. Further analysis would require understanding the scope of work and the unique capabilities of Vertex Aerospace.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Vertex Aerospace LLC, was solicited. The justification for this approach is not detailed in the provided data. Typically, sole-source awards are used when only one responsible source can provide the required supplies or services. The lack of competition means the government did not explore potential cost savings or service enhancements that could have arisen from a competitive bidding process.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competition. The government's ability to negotiate favorable terms was limited without alternative offers.

Public Impact

The primary beneficiaries are the U.S. Air Force and its T-1A aircraft fleet, ensuring operational readiness. The service delivered is specialized repair for hail damage, crucial for maintaining aircraft airworthiness. The geographic impact is primarily within the operational areas of the T-1A fleet, likely global. Workforce implications include specialized technicians employed by Vertex Aerospace for aircraft repair.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for better value.
Lack of transparency on the justification for sole-sourcing.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Focus on specialized repair addresses a critical fleet maintenance need.
Contract duration suggests a sustained commitment to T-1A readiness.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, specialized technical expertise, and significant government investment. Contracts for aircraft maintenance and repair are a substantial part of this sector's spending. The market for specialized repair services, particularly for specific military aircraft like the T-1A, can be concentrated among a few qualified providers. This contract fits within the broader category of aviation support services, which is a critical component of national defense infrastructure.

Small Business Impact

This contract does not appear to have included any small business set-aside provisions, nor is there information indicating subcontracting plans. The award to Vertex Aerospace LLC, a single entity, suggests that opportunities for small businesses to participate in this specific contract as prime contractors or subcontractors may have been limited. This could represent a missed opportunity to foster small business growth within the aerospace support ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified services within the agreed price. Transparency regarding the sole-source justification and performance metrics would be crucial for assessing accountability. Inspector General involvement would be contingent on any reported issues of fraud, waste, or abuse.

Related Government Programs

T-1A Jayhawk Aircraft Support
Military Aircraft Maintenance Services
Aerospace Repair Contracts
Defense Aviation Services

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns if scope is not tightly managed.
Dependence on a single contractor for critical repair services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.0 million to VERTEX AEROSPACE LLC. HAIL DAMAGE REPAIR SERVICE FOR THE T-1A AIRCRAFT

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE 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 $52.0 million.

What is the period of performance?

Start: 2017-10-03. End: 2020-12-31.

What is the specific justification provided by the Department of the Air Force for awarding this contract on a sole-source basis to Vertex Aerospace LLC?

The provided data does not include the specific justification for the sole-source award. Generally, sole-source contracts are awarded when only one responsible source can provide the required services, often due to unique capabilities, proprietary technology, or urgent needs where competition is not feasible or practical. For this contract, the Air Force would have had to document why Vertex Aerospace was the only viable option for T-1A hail damage repair. This could be related to specialized tooling, unique repair processes, or specific certifications held by Vertex Aerospace that are not available from other potential contractors. Without this documentation, it is difficult to fully assess the necessity of the sole-source approach.

How does the $52 million contract value compare to historical spending on T-1A aircraft maintenance or similar specialized repair services?

Direct comparison of the $52 million contract value to historical spending on T-1A aircraft maintenance or similar specialized repair services is difficult without access to broader historical contract data. The provided data only includes this specific contract. However, the value suggests a significant expenditure for a particular type of repair. If this contract covers multiple years of hail damage repair for the entire T-1A fleet, the annual cost might be more moderate. Conversely, if it represents a single, large-scale repair event or a short-term surge in demand, the cost per incident could be high. Benchmarking would require identifying comparable contracts for similar aircraft types and repair needs, considering factors like fleet size, age, and operational tempo.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract to ensure Vertex Aerospace LLC meets performance expectations?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. However, for a firm-fixed-price contract of this nature, typical KPIs would likely focus on turnaround time for repairs, quality of workmanship (e.g., defect rates post-repair), adherence to technical specifications, and potentially response times for initiating repairs after damage is reported. SLAs would define the acceptable thresholds for these KPIs and may include provisions for remedies or penalties if performance falls short. The Department of the Air Force would have established these metrics to ensure the T-1A fleet's readiness is maintained effectively and efficiently.

What is the track record of Vertex Aerospace LLC in performing similar aircraft maintenance and repair services, particularly for military aviation?

Vertex Aerospace LLC has a history of providing aviation services, including maintenance, repair, and overhaul (MRO) for various aircraft. While specific details on their track record for T-1A hail damage repair are not in the provided data, the company has been involved in other significant defense contracts. Their experience often includes working with military specifications and complex aircraft systems. A thorough assessment of their track record would involve reviewing past performance evaluations, any contract disputes or awards, and their overall experience with the specific aircraft platforms operated by the U.S. Air Force. Their ability to secure this sole-source contract suggests they possess specialized capabilities deemed necessary by the Air Force.

Given the sole-source nature, what measures are in place to mitigate potential risks such as cost overruns or performance deficiencies by Vertex Aerospace LLC?

Despite the sole-source award, several risk mitigation measures are typically employed. The firm-fixed-price (FFP) contract structure itself places the cost risk on the contractor, incentivizing them to manage expenses efficiently. The Department of the Air Force would likely have robust oversight mechanisms, including regular progress reviews, technical inspections of completed work, and performance monitoring against defined requirements. Contract clauses may also include provisions for termination for default if performance is unsatisfactory. Furthermore, the government would maintain the right to audit contractor costs and processes, even in a sole-source FFP scenario, to ensure compliance and identify potential issues early.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vertex Aerospace Services Corp. (UEI: 081292432)

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: $51,992,722

Exercised Options: $51,992,722

Current Obligation: $51,992,722

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810618D0001

IDV Type: IDC

Timeline