DoD awards $21M for aircraft maintenance, with Kay and Associates Inc. securing the contract

Contract Overview

Contract Amount: $21,015,606 ($21.0M)

Contractor: KAY and Associates, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-12-16

End Date: 2025-05-15

Contract Duration: 1,246 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FLIGHT LINE, CORROSION CONTROL, TOOL ROOM AND "O/I" LEVEL MAINTENANCE SUPPORT

Place of Performance

Location: BUFFALO GROVE, LAKE County, ILLINOIS, 60089

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $21.0 million to KAY AND ASSOCIATES, INC. for work described as: FLIGHT LINE, CORROSION CONTROL, TOOL ROOM AND "O/I" LEVEL MAINTENANCE SUPPORT Key points: 1. Contract value of $21 million over its period of performance. 2. Kay and Associates, Inc. is the prime contractor for this service. 3. The contract is for flight line, corrosion control, and maintenance support. 4. Performance period spans from December 2021 to May 2025. 5. The contract type is Firm Fixed Price, indicating predictable costs. 6. Awarded under Full and Open Competition after Exclusion of Sources.

Value Assessment

Rating: good

The contract value of $21 million for over three years of aircraft maintenance support appears reasonable given the scope of services. Benchmarking against similar contracts for specialized aviation maintenance is crucial for a definitive value assessment. The Firm Fixed Price structure suggests that cost overruns are primarily the contractor's responsibility, which is a positive indicator for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition after Exclusion of Sources,' which suggests a competitive process but with specific limitations or exclusions. While not a purely open competition, it implies that multiple sources were considered and evaluated. The presence of two bidders indicates some level of market interest and competition.

Taxpayer Impact: The competitive nature, even with exclusions, likely helped achieve a fair market price for the government. However, understanding the reasons for source exclusion is key to ensuring maximum taxpayer value.

Public Impact

The Department of the Air Force benefits from specialized maintenance services to ensure aircraft readiness. Services include flight line operations, corrosion control, and "O/I" level maintenance. The contract supports military aviation operations, contributing to national defense. Workforce implications include employment for skilled aviation mechanics and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs if excluded sources represent a significant portion of the market.
Dependence on a single contractor for critical maintenance functions could pose a risk.
Scope creep could lead to cost increases if not managed tightly under the FFP structure.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Award to an established contractor with experience in aviation support.
Competition, even if limited, suggests a degree of market validation.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aviation maintenance services. The market for specialized aircraft maintenance is robust, driven by government and commercial aviation needs. This contract represents a segment of the Department of Defense's significant spending on maintaining its fleet, which is critical for operational readiness.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. Further analysis would be needed to determine if small businesses are involved as subcontractors or if there were opportunities missed for their participation.

Oversight & Accountability

Oversight is typically managed by the contracting officer's representative (COR) within the Department of the Air Force. Performance metrics and delivery schedules outlined in the contract serve as accountability measures. Transparency is generally maintained through contract award databases, though detailed performance reports may not always be public.

Related Government Programs

Aircraft Maintenance Services
Aviation Support Contracts
Department of Defense Aviation Procurement
Air Force Logistics and Maintenance

Risk Flags

Limited competition due to source exclusion.
Potential for performance issues impacting operational readiness.
Risk of scope creep in a Firm Fixed Price contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.0 million to KAY AND ASSOCIATES, INC.. FLIGHT LINE, CORROSION CONTROL, TOOL ROOM AND "O/I" LEVEL MAINTENANCE SUPPORT

Who is the contractor on this award?

The obligated recipient is KAY AND ASSOCIATES, 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 $21.0 million.

What is the period of performance?

Start: 2021-12-16. End: 2025-05-15.

What is the track record of Kay and Associates, Inc. with Department of Defense contracts?

Kay and Associates, Inc. has a history of performing contracts for the Department of Defense, particularly in areas related to aviation support and maintenance. Reviewing their past performance on similar contracts, including any past performance issues or commendations, is essential. Data from contract databases often shows their award history, contract values, and agencies served. A deeper dive would involve examining specific contract close-out reports and any contractor performance assessment reporting (CPARS) to gauge their reliability and quality of service in previous engagements.

How does the pricing of this contract compare to similar aviation maintenance contracts?

Benchmarking the pricing of this $21 million contract against similar aviation maintenance contracts awarded by the Department of Defense or other federal agencies is crucial for assessing value for money. Factors such as the specific aircraft types, complexity of maintenance required (e.g., depot-level vs. intermediate), geographic location, and contract duration significantly influence pricing. A comprehensive comparison would involve analyzing the per-hour labor rates, material costs, and overhead applied by Kay and Associates, Inc. against industry standards and rates paid to other contractors for comparable services. Without access to detailed pricing breakdowns and a wider pool of comparable contracts, a precise value assessment is challenging.

What are the primary risks associated with this contract?

Key risks for this contract include potential performance issues if Kay and Associates, Inc. fails to meet service level agreements, leading to aircraft downtime and operational impacts. There's also a risk of cost overruns if the Firm Fixed Price (FFP) contract's scope is not meticulously managed, although the FFP structure places most cost risk on the contractor. Dependence on a single provider for critical maintenance could create vulnerabilities. Furthermore, changes in military requirements or budget constraints could affect the contract's future. The 'Exclusion of Sources' in the competition process might also indicate a risk of limited market options or potential for higher prices than a fully open competition.

How effective is the 'Full and Open Competition after Exclusion of Sources' method in ensuring competitive pricing?

The 'Full and Open Competition after Exclusion of Sources' method aims to balance the benefits of broad competition with specific needs or limitations. While it allows for a wider pool of potential bidders than a sole-source award, the exclusion of certain sources can limit the overall competitive landscape. The effectiveness in ensuring competitive pricing depends heavily on the rationale for the exclusions and the number of bidders that remain. If the excluded sources represent significant market players or if the remaining bidders have limited alternatives, the pricing may not be as competitive as in a truly open market. Two bidders, as indicated here, suggest some competition, but a thorough analysis of the excluded sources is needed to fully assess the impact on price discovery.

What is the historical spending trend for aircraft maintenance support within the Department of the Air Force?

Historical spending on aircraft maintenance support within the Department of the Air Force is substantial and generally consistent, reflecting the ongoing need to maintain a large and complex fleet. Annual expenditures can fluctuate based on modernization programs, operational tempo, and specific aircraft sustainment requirements. The Air Force consistently allocates billions of dollars annually towards maintenance, repair, and overhaul (MRO) services, both through organic capabilities and contracted support. Analyzing trends over the past 5-10 years would reveal patterns in spending across different aircraft types and maintenance levels, highlighting the strategic importance and sustained investment in this area.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 165 N ARLINGTON HEIGHTS RD STE 150, BUFFALO GROVE, IL, 60089

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,384,775

Exercised Options: $21,015,606

Current Obligation: $21,015,606

Actual Outlays: $10,081,524

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA810817D0003

IDV Type: IDC

Timeline