DoD's $17.5M aircraft maintenance contract awarded to Strategic Technology Institute Inc. shows fair value

Contract Overview

Contract Amount: $17,537,711 ($17.5M)

Contractor: Strategic Technology Institute Inc

Awarding Agency: Department of Defense

Start Date: 2022-07-01

End Date: 2025-07-31

Contract Duration: 1,126 days

Daily Burn Rate: $15.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AIRCRAFT MAINTENANCE FUNCTIONS OF AIRCRAFT "I" LEVEL MAINTENANCE SUPPORT

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to STRATEGIC TECHNOLOGY INSTITUTE INC for work described as: AIRCRAFT MAINTENANCE FUNCTIONS OF AIRCRAFT "I" LEVEL MAINTENANCE SUPPORT Key points: 1. The contract's value appears reasonable when benchmarked against similar services. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is expected over a 3-year period, indicating a medium-term engagement. 5. This contract falls within the broader Defense sector, specifically supporting aircraft readiness.

Value Assessment

Rating: good

The contract's total value of $17.5 million over approximately three years suggests a moderate annual spend. Benchmarking against similar 'I' level aircraft maintenance contracts indicates that the pricing is within expected ranges. The firm fixed-price structure further supports value by shifting performance risk to the contractor, incentivizing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while initial solicitations may have had limitations, the final award was made through a broad competitive process. The presence of 6 bidders suggests a healthy level of competition, which typically drives down prices and improves service quality.

Taxpayer Impact: The robust competition ensures that taxpayer dollars are likely being used efficiently, as multiple companies vied for the contract, pushing for the most competitive offers.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Air Force, ensuring operational readiness of aircraft. Services delivered include 'I' level maintenance functions, crucial for maintaining aircraft airworthiness and performance. The geographic impact is likely concentrated around the Air Force bases where the aircraft are stationed and maintained. Workforce implications include skilled technicians and support staff required for specialized aircraft maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if 'I' level maintenance definitions are not strictly adhered to.
Dependence on contractor's ability to maintain a skilled workforce throughout the contract duration.

Positive Signals

Firm fixed-price contract type limits the government's exposure to cost increases.
Multiple bidders indicate a competitive market, likely leading to better pricing and service.
Long-term performance period allows for stable support and potential for relationship building.

Sector Analysis

This contract operates within the Defense Industrial Base, a sector characterized by high technological requirements and significant government spending. Aircraft maintenance is a critical sub-sector, essential for national security and military readiness. The market for such services is competitive, with numerous specialized firms capable of meeting stringent military standards. Spending benchmarks for similar maintenance contracts can vary widely based on aircraft type and complexity, but this $17.5M award appears to be within a typical range for comprehensive 'I' level support.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting goals. This suggests that the prime contractor, Strategic Technology Institute Inc., is likely a larger entity, and the contract may not significantly benefit the small business ecosystem unless subcontracting opportunities are pursued independently by the prime.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of the Air Force, ensuring adherence to contract terms and performance standards. Accountability is built into the firm fixed-price structure, with penalties or remedies for non-performance. Transparency is facilitated through contract award databases, though specific performance metrics and oversight reports may not always be publicly available.

Related Government Programs

Aircraft Depot Maintenance
Aviation Logistics Support
Military Aircraft Repair Services
Defense Readiness Contracts

Risk Flags

Potential for scope creep
Contractor performance risk
Adequacy of competition for specialized services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to STRATEGIC TECHNOLOGY INSTITUTE INC. AIRCRAFT MAINTENANCE FUNCTIONS OF AIRCRAFT "I" LEVEL MAINTENANCE SUPPORT

Who is the contractor on this award?

The obligated recipient is STRATEGIC TECHNOLOGY INSTITUTE 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 $17.5 million.

What is the period of performance?

Start: 2022-07-01. End: 2025-07-31.

What is the historical spending pattern for aircraft maintenance functions by the Department of the Air Force?

Historical spending on aircraft maintenance by the Department of the Air Force is substantial and fluctuates based on fleet size, operational tempo, and modernization programs. While specific figures for 'I' level maintenance are not readily available in this dataset, the Air Force consistently allocates billions annually towards aviation readiness. This includes depot-level maintenance, component repair, and specialized support services. Analyzing trends over the past 5-10 years would reveal patterns influenced by geopolitical events, budget appropriations, and the introduction of new aircraft platforms. For instance, periods of high operational tempo often correlate with increased maintenance spending. Conversely, budget constraints or shifts towards unmanned systems might lead to adjustments in spending priorities. This $17.5M contract represents a segment of that broader, significant investment in maintaining air superiority.

How does the contractor's track record influence the risk assessment for this contract?

The track record of Strategic Technology Institute Inc. is a critical factor in assessing the risk associated with this $17.5 million aircraft maintenance contract. While the provided data does not detail their past performance, a thorough risk assessment would involve reviewing their history with similar government contracts, particularly within the Department of Defense. Key indicators include on-time delivery, adherence to quality standards, cost control on previous fixed-price contracts, and any history of disputes or contract terminations. A contractor with a proven history of successful performance on complex aviation maintenance tasks would significantly lower performance risk. Conversely, a history of issues could elevate concerns regarding schedule delays, quality deficiencies, or cost overruns, even within a fixed-price structure. Government databases and past performance reviews are essential for a comprehensive evaluation.

What are the potential risks associated with a firm fixed-price contract for aircraft maintenance?

While firm fixed-price (FFP) contracts are generally favored for their cost control benefits, they carry specific risks, especially in complex service areas like aircraft maintenance. The primary risk is that the contractor may cut corners on quality or labor to maintain profitability if their initial cost estimates were too low or if unforeseen issues arise. This could lead to subpar maintenance, potentially impacting aircraft safety and readiness. Another risk is contractor default; if the contractor faces financial difficulties or cannot perform as required, the government may need to re-compete the contract, leading to delays and potentially higher costs. Furthermore, if the scope of work significantly changes due to evolving military requirements, the FFP structure can make contract modifications more complex and potentially contentious, although change orders are possible. Effective government oversight is crucial to mitigate these risks.

How does the 'I' level maintenance designation impact the scope and complexity of this contract?

'I' level maintenance, often referred to as intermediate-level maintenance, signifies a specific tier of repair and servicing for aircraft. This level typically involves more complex tasks than organizational (O) level maintenance performed by the flight crew or unit, but less extensive work than depot (D) level maintenance, which involves complete disassembly and overhaul. 'I' level maintenance often includes component repair, troubleshooting complex systems, and scheduled servicing that requires specialized equipment and trained technicians. For this contract, it implies that Strategic Technology Institute Inc. is responsible for a significant portion of the technical upkeep required to keep aircraft operational between major overhauls. The complexity necessitates skilled personnel, specialized tools, and robust quality control processes, directly influencing the contract's value and the contractor's required capabilities.

What is the significance of '336411' (Aircraft Manufacturing) as the NAICS code for an aircraft maintenance contract?

The assignment of NAICS code '336411' (Aircraft Manufacturing) to a contract primarily focused on aircraft maintenance functions might seem counterintuitive, but it often reflects the broader industrial classification or the primary business activity of the awarded contractor. While the contract's description clearly states 'AIRCRAFT MAINTENANCE FUNCTIONS,' the NAICS code might be based on the contractor's overall business operations or historical classification. Aircraft manufacturing firms often possess the deep technical expertise, specialized facilities, and skilled workforce necessary for high-level maintenance and repair. It's possible that Strategic Technology Institute Inc. also engages in or has capabilities related to aircraft manufacturing, or that this code was selected due to the nature of the complex technical services provided, which border on manufacturing-level precision and engineering. However, for analytical purposes, the service description ('Aircraft Maintenance') is more pertinent to understanding the contract's immediate purpose.

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: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6000 EXECUTIVE BLVD STE 205, ROCKVILLE, MD, 20852

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,761,435

Exercised Options: $17,537,711

Current Obligation: $17,537,711

Actual Outlays: $1,554,729

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA810817D0006

IDV Type: IDC

Timeline