DoD awards $12.9M contract to Vertex Aerospace for aircraft manufacturing, raising questions about competition

Contract Overview

Contract Amount: $12,945,335 ($12.9M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2026-01-27

End Date: 2031-11-30

Contract Duration: 2,133 days

Daily Burn Rate: $6.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 2025-0069943

Plain-Language Summary

Department of Defense obligated $12.9 million to VERTEX AEROSPACE LLC for work described as: 2025-0069943 Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. 3. Duration of over 5 years suggests a long-term need for these aircraft manufacturing services. 4. No small business set-aside, indicating potential missed opportunities for small business participation. 5. The specific North American Industry Classification System (NAICS) code 336411 points to a specialized manufacturing sector.

Value Assessment

Rating: questionable

Benchmarking the value of this $12.9 million contract is challenging without more detailed cost breakdowns or comparisons to similar sole-source awards. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D or uncertain scope work, carries inherent risks of cost escalation. Without competitive bidding, it's difficult to ascertain if the fixed fee adequately compensates Vertex Aerospace for the effort or if the government is receiving optimal value. Further analysis would require understanding the specific aircraft and the scope of manufacturing involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that typically arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less assurance that the negotiated price reflects the lowest possible cost for the required services.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving aircraft manufacturing services. This contract supports the sustainment and potential production of specific aircraft critical to Air Force operations. The geographic impact is likely concentrated around Vertex Aerospace's facilities, but the ultimate impact is on Air Force readiness nationwide. Workforce implications include job creation and retention within the aerospace manufacturing sector at Vertex Aerospace.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Cost Plus Fixed Fee contract type can lead to cost overruns if not managed closely.
Lack of small business set-aside may limit opportunities for smaller, specialized firms.
Long contract duration (over 5 years) requires sustained oversight to ensure performance and value.

Positive Signals

Award to an established entity like Vertex Aerospace suggests a focus on proven capabilities.
Definitive contract structure provides a clear framework for services over the contract period.
Specific NAICS code indicates a focus on a critical defense manufacturing capability.

Sector Analysis

The aerospace manufacturing sector is a critical component of the defense industrial base, characterized by high barriers to entry, complex supply chains, and significant R&D investment. This contract falls under the Aircraft Manufacturing (NAICS 336411) subsector. Spending in this area is often driven by defense modernization, sustainment programs, and the need for specialized components. Comparable spending benchmarks are difficult to establish without knowing the specific aircraft, but large-scale aircraft manufacturing contracts can range from tens of millions to billions of dollars.

Small Business Impact

This contract does not appear to include a small business set-aside. The absence of such provisions means that opportunities for small businesses to participate as prime contractors are limited. While Vertex Aerospace may engage subcontractors, the lack of a specific set-aside or subcontracting goals means that the direct impact on the small business ecosystem is not guaranteed. Further investigation into Vertex Aerospace's subcontracting plans would be necessary to assess potential benefits to small businesses.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. Given the sole-source nature and CPFF structure, rigorous oversight of costs, performance, and adherence to contract terms will be crucial. Transparency may be limited due to the non-competitive award, but internal government audits and potentially Inspector General reviews would be standard mechanisms for accountability.

Related Government Programs

Aircraft Sustainment Programs
Defense Production Act Investments
Aerospace Manufacturing Support Contracts
Air Force Logistics and Maintenance Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.9 million to VERTEX AEROSPACE LLC. 2025-0069943

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 $12.9 million.

What is the period of performance?

Start: 2026-01-27. End: 2031-11-30.

What is Vertex Aerospace LLC's track record with the Department of Defense, particularly in aircraft manufacturing?

Vertex Aerospace LLC has a history of performing contracts for the Department of Defense, often related to aircraft maintenance, repair, and overhaul (MRO), as well as component manufacturing. Their experience typically spans various aircraft platforms, including those used by the Air Force. While specific details of past performance on contracts of similar scope and value to this $12.9 million award would require deeper database analysis, their presence in the defense aerospace sector suggests a level of established capability. However, the sole-source nature of this award means that their past performance was likely deemed sufficient without direct comparison to competitors for this specific requirement.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for aircraft manufacturing, and what are the associated risks?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. This contrasts with fixed-price contracts, where the contractor agrees to a set price regardless of actual costs, or cost-plus-incentive-fee contracts, which offer bonuses for meeting cost targets. CPFF is often used when the scope of work is not well-defined or involves research and development, making it difficult to estimate costs accurately upfront. The primary risk for the government with CPFF is cost overrun, as the contractor has less incentive to control expenses once costs are covered. Effective oversight is critical to manage these risks and ensure the fixed fee remains appropriate for the effort expended.

What are the potential implications of awarding this contract on a sole-source basis for future aircraft manufacturing procurements?

Awarding this contract on a sole-source basis could have several implications. Firstly, it signals to the market that for certain specialized aircraft manufacturing needs, the government may opt for direct negotiation rather than open competition, potentially discouraging other firms from investing in capabilities if they believe they won't have a fair chance to compete. Secondly, it removes the downward price pressure that competition typically exerts, potentially leading to higher costs for the government over the contract's life. Lastly, it might indicate a reliance on a single source for critical capabilities, which could pose a risk if that source encounters performance issues or business challenges.

Are there any comparable federal spending benchmarks for aircraft manufacturing contracts of this size and type?

Finding precise comparable federal spending benchmarks for aircraft manufacturing contracts is challenging without knowing the specific aircraft platform and the exact scope of work (e.g., new production, modification, sustainment). However, contracts for aircraft component manufacturing, specialized assembly, or depot-level maintenance can range from a few million to tens of millions of dollars. Larger programs involving entire aircraft production lines or major upgrades would be in the hundreds of millions or billions. The $12.9 million value for this definitive contract suggests a significant but not massive undertaking, likely focused on a specific set of manufacturing tasks or a limited production run for a particular aircraft type.

What is the historical spending pattern for aircraft manufacturing (NAICS 336411) by the Department of Defense?

The Department of Defense (DoD) is a major consumer of aircraft manufacturing services, with historical spending in NAICS code 336411 consistently in the billions of dollars annually. This spending supports the acquisition of new aircraft, the sustainment and modernization of existing fleets, and the development of next-generation aviation technologies. Spending fluctuates based on defense budgets, strategic priorities, and specific program requirements. While this $12.9 million contract represents a small fraction of the DoD's total aircraft manufacturing expenditure, it is part of a larger, ongoing investment in maintaining and advancing air superiority and operational readiness.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $12,945,382

Exercised Options: $12,945,382

Current Obligation: $12,945,335

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline