DoD's $14.6M contract for U-2 aircraft maintenance awarded to Strategic Technology Institute Inc

Contract Overview

Contract Amount: $14,569,489 ($14.6M)

Contractor: Strategic Technology Institute Inc

Awarding Agency: Department of Defense

Start Date: 2024-01-16

End Date: 2026-12-14

Contract Duration: 1,063 days

Daily Burn Rate: $13.7K/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: CONTRACT FIELD TEAMS SUPPORT SERVICES FOR U-2 AIRCRAFT OID LEVEL MAINTENANCE AT 9TH RECONNAISSANCE WING, BEALE AFB, CA

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $14.6 million to STRATEGIC TECHNOLOGY INSTITUTE INC for work described as: CONTRACT FIELD TEAMS SUPPORT SERVICES FOR U-2 AIRCRAFT OID LEVEL MAINTENANCE AT 9TH RECONNAISSANCE WING, BEALE AFB, CA Key points: 1. Contract focuses on essential maintenance for U-2 reconnaissance aircraft, critical for intelligence gathering. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract duration of over two years indicates a sustained need for these specialized services. 4. The fixed-price contract type aims to control costs and provide predictability for the government. 5. The services are geographically concentrated at Beale AFB, CA, supporting a specific operational base.

Value Assessment

Rating: good

The contract value of approximately $14.6 million over roughly 2.5 years appears reasonable for specialized aircraft maintenance. Benchmarking against similar contracts for depot-level maintenance of complex aircraft systems would provide a more precise value-for-money assessment. The firm fixed-price structure is generally favorable for cost control, assuming the scope of work is well-defined and risks are manageable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that while the competition was open, specific sources may have been excluded based on pre-defined criteria. The presence of two bidders suggests a moderate level of competition. A higher number of bidders typically leads to more aggressive pricing and better value for the government.

Taxpayer Impact: The competitive nature of this award, even with two bidders, is beneficial for taxpayers as it likely resulted in a more competitive price than a sole-source award.

Public Impact

The primary beneficiaries are the U.S. Air Force and intelligence agencies relying on the U-2 aircraft for reconnaissance and surveillance missions. The contract ensures the continued operational readiness and maintenance of a critical intelligence, surveillance, and reconnaissance (ISR) platform. Services are delivered at Beale AFB, California, directly impacting the operational capabilities stationed there. The contract supports specialized technical roles, potentially impacting a skilled workforce in aircraft maintenance and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise beyond the scope of the fixed-price contract.
Dependence on a single contractor for critical maintenance could pose a risk if performance issues emerge.
The exclusion of sources, even within a full and open competition, warrants scrutiny to ensure fairness and maximum competition.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Awarding to a single contractor for specialized services can ensure focused expertise and efficient execution.
The contract duration suggests a stable requirement and a commitment to maintaining the U-2 fleet's readiness.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance and support. The U-2 program represents a niche but enduring segment of military aviation, requiring specialized technical expertise. Spending on aircraft maintenance is a significant component of defense budgets, with contracts often being long-term and high-value due to the complexity and criticality of the assets.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. Therefore, the direct impact on the small business ecosystem is not immediately apparent from this award alone. Further analysis of the prime contractor's subcontracting plan would be necessary to assess potential opportunities for small businesses.

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 embedded in the contract terms, including performance standards and delivery schedules. Transparency is generally maintained through contract award databases, though specific performance metrics may be considered sensitive. The Inspector General for the Department of Defense would have jurisdiction over investigations of fraud, waste, or abuse.

Related Government Programs

U-2 Aircraft Operations and Maintenance
Air Force Reconnaissance Programs
Aerospace Maintenance and Repair Services
Defense Intelligence, Surveillance, and Reconnaissance (ISR) Contracts

Risk Flags

Potential for limited competition due to source exclusion
Contractor performance risk on specialized maintenance
Aging aircraft platform challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.6 million to STRATEGIC TECHNOLOGY INSTITUTE INC. CONTRACT FIELD TEAMS SUPPORT SERVICES FOR U-2 AIRCRAFT OID LEVEL MAINTENANCE AT 9TH RECONNAISSANCE WING, BEALE AFB, CA

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 $14.6 million.

What is the period of performance?

Start: 2024-01-16. End: 2026-12-14.

What is the track record of Strategic Technology Institute Inc. with similar DoD contracts?

Strategic Technology Institute Inc. (STI) has a history of performing services for the Department of Defense, often in areas related to technical support, logistics, and specialized maintenance. While specific details on past U-2 related contracts for STI require deeper investigation into historical contract databases, their general profile suggests experience with government service contracts. A review of their past performance ratings, any past performance issues, and the types of contracts they have previously held would be crucial for a comprehensive assessment. This includes examining if they have successfully managed similar fixed-price contracts of comparable value and complexity within the defense sector. Understanding their performance on previous engagements provides insight into their capability to meet the requirements of this current U-2 maintenance contract.

How does the awarded amount compare to historical spending on U-2 aircraft maintenance?

To accurately compare this $14.6 million contract to historical spending on U-2 aircraft maintenance, a detailed analysis of past contract awards for the U-2 program is necessary. This would involve identifying previous contracts for similar maintenance, repair, and overhaul (MRO) services, noting their values, durations, and the contractors involved. Factors such as inflation, changes in operational tempo, and technological upgrades to the U-2 fleet over time would need to be considered for a meaningful comparison. Without access to this historical data, it is difficult to definitively state whether this award represents an increase, decrease, or stable level of spending. However, the sustained operational life of the U-2 suggests consistent, albeit potentially fluctuating, investment in its upkeep.

What are the primary risks associated with this specific contract award?

The primary risks associated with this contract include potential performance deficiencies by Strategic Technology Institute Inc., given the specialized nature of U-2 aircraft maintenance. Another risk is the possibility of cost overruns, even under a firm fixed-price contract, if unforeseen technical issues or scope creep occur. The 'exclusion of sources' within the full and open competition, while potentially justified, introduces a risk of limiting the pool of qualified bidders and potentially missing out on more competitive pricing or innovative solutions. Furthermore, reliance on a single contractor for critical maintenance creates a dependency risk; any disruption to STI's operations could impact the U-2 fleet's readiness. Finally, the aging nature of the U-2 platform itself presents inherent maintenance challenges that could translate into higher-than-anticipated costs or complexities.

How effective is the firm fixed-price contract type in managing costs for this type of specialized service?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs in specialized service areas like aircraft maintenance when the scope of work is well-defined and risks are understood. FFP shifts the cost risk to the contractor, incentivizing them to control expenses and perform efficiently to maximize profit. For the government, it provides budget certainty. However, its effectiveness hinges on the accuracy of the initial cost estimates and the contractor's ability to manage unforeseen issues. If the scope is not fully understood or if significant technical challenges arise, the contractor may incur losses, potentially leading to requests for contract modifications or performance issues. In this case, the Air Force likely assessed the maintenance requirements as sufficiently defined to warrant an FFP approach, aiming for predictable spending on U-2 support.

What is the strategic importance of the U-2 aircraft and its continued maintenance?

The U-2 'Dragon Lady' remains strategically important due to its unique capabilities in high-altitude intelligence, surveillance, and reconnaissance (ISR). Its ability to loiter for extended periods at high altitudes provides persistent surveillance over vast areas, gathering critical intelligence that complements other ISR assets. Despite the advent of newer technologies like drones and satellites, the U-2 offers a flexible and adaptable platform for specific mission requirements that cannot be easily replicated. Continued maintenance is crucial to ensure the platform's operational readiness, extending its service life and allowing it to fulfill its vital role in national security and intelligence gathering operations. The investment in its upkeep reflects its ongoing value to military and intelligence communities.

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: 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: $29,284,193

Exercised Options: $14,569,489

Current Obligation: $14,569,489

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