DoD's $190M C-130 maintenance contract for Indonesia awarded via sole-source justification

Contract Overview

Contract Amount: $18,975,264 ($19.0M)

Contractor: Booz Allen Hamilton Engineering Services, LLC

Awarding Agency: Department of Defense

Start Date: 2010-06-23

End Date: 2014-05-28

Contract Duration: 1,435 days

Daily Burn Rate: $13.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROGRAM DEPOT MAINTENANCE FOR AN INDONESIAN C-130 AIRCRAFT

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $19.0 million to BOOZ ALLEN HAMILTON ENGINEERING SERVICES, LLC for work described as: PROGRAM DEPOT MAINTENANCE FOR AN INDONESIAN C-130 AIRCRAFT Key points: 1. Contract awarded on a sole-source basis, raising questions about competitive pricing. 2. Limited competition may have led to above-market rates for specialized aircraft maintenance. 3. The contract duration of nearly four years suggests a significant, long-term commitment. 4. Performance was rated 'OK', indicating no major issues but not exceptional service. 5. The contract falls under professional, scientific, and technical services, a broad category. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging due to the lack of publicly available comparable sole-source agreements for Indonesian C-130 maintenance. However, the absence of competition inherently limits the government's ability to secure the best possible price. Without competitive bids, it's difficult to ascertain if the $189.75 million awarded represents fair market value or if a more competitive process could have yielded significant savings for taxpayers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. The Department of Defense likely determined that only Booz Allen Hamilton Engineering Services, LLC possessed the unique qualifications, expertise, or proprietary data necessary to perform the required program depot maintenance for the Indonesian C-130 aircraft. This approach bypasses the standard competitive bidding process, which typically involves multiple interested parties submitting proposals.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as they eliminate the downward price pressure that competition normally provides. The government may not achieve the most economical outcome when a single contractor is selected without a bidding process.

Public Impact

The primary beneficiary is the Indonesian Air Force, which receives essential maintenance for its C-130 fleet, ensuring operational readiness. The services delivered include program depot maintenance, a comprehensive overhaul and repair process for the aircraft. The geographic impact is primarily focused on supporting a foreign military partner's assets, indirectly contributing to regional security cooperation. The contract supports specialized technical and engineering roles within Booz Allen Hamilton, potentially involving a skilled workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Lack of competition raises concerns about overall value for money.
Performance rating of 'OK' suggests room for improvement in service delivery.
Contract duration could lock in potentially suboptimal pricing for an extended period.

Positive Signals

Contract ensures critical maintenance for a key allied airframe.
Booz Allen Hamilton is a known entity with established defense contracting experience.
Firm fixed price contract provides cost certainty for the government.

Sector Analysis

This contract falls within the broader professional, scientific, and technical services sector, specifically focusing on specialized engineering and maintenance for defense assets. The aerospace maintenance and repair market is substantial, with significant government spending dedicated to ensuring the readiness of military aircraft fleets. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of foreign military sales support and sole-source justifications, but overall defense maintenance spending runs into billions annually.

Small Business Impact

This contract did not include a small business set-aside, nor is there information indicating subcontracting opportunities for small businesses. The award to a large prime contractor like Booz Allen Hamilton suggests that the primary focus was on specialized capabilities rather than fostering small business participation. This approach may limit the direct economic benefits to the small business ecosystem in this specific instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the terms of the firm fixed-price contract and the 'OK' performance rating. Transparency is limited due to the sole-source nature of the award, with detailed justifications often not fully disclosed publicly. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Foreign Military Sales (FMS)
Aircraft Maintenance and Repair Services
C-130 Hercules Support Programs
Defense Logistics Agency (DLA) Services

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for above-market rates due to limited competition.
Performance rating of 'OK' suggests satisfactory but not optimal service.
Long contract duration may limit future cost-saving opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.0 million to BOOZ ALLEN HAMILTON ENGINEERING SERVICES, LLC. PROGRAM DEPOT MAINTENANCE FOR AN INDONESIAN C-130 AIRCRAFT

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON ENGINEERING SERVICES, 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 $19.0 million.

What is the period of performance?

Start: 2010-06-23. End: 2014-05-28.

What is the specific justification provided for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. While the specific justification document is not included, such awards are typically made when only one responsible source is determined to be capable of meeting the government's needs. For specialized aircraft maintenance, this could stem from unique technical expertise, proprietary data access, or specific tooling and facilities required for the Indonesian C-130 variant that only the awarded contractor possesses. The Department of Defense would have had to formally document and approve this justification, often citing FAR Part 6 exceptions.

How does the $189.75 million contract value compare to similar C-130 maintenance contracts, if available?

Direct comparison of the $189.75 million contract value is difficult due to its sole-source nature and specific focus on Indonesian C-130s. Publicly available data often pertains to competitively awarded contracts for U.S. military fleet maintenance. Competitively bid contracts generally yield lower prices due to market forces. Without access to the specific technical requirements, labor rates, and overhead applied by Booz Allen Hamilton, and lacking comparable sole-source data points, a precise value-for-money assessment against market rates is not feasible. However, sole-source awards inherently carry a higher risk of being less cost-effective than competitive ones.

What are the key risks associated with a sole-source contract of this magnitude and duration?

The primary risk is financial: the government may pay a premium compared to a competitive scenario, as the contractor faces less pressure to offer the lowest possible price. There's also a risk of complacency, where the contractor might not strive for maximum efficiency or innovation over the contract's nearly four-year duration. Furthermore, reliance on a single provider can create vendor lock-in, making it difficult to switch providers or renegotiate terms favorably in the future. Ensuring adequate performance oversight becomes even more critical when competition is absent.

What does the 'OK' performance rating signify in the context of this contract?

An 'OK' performance rating, often represented by a numerical score (e.g., 3 out of 5), indicates that the contractor met the contract requirements in a satisfactory manner but did not exceed expectations. It suggests that the services were delivered as specified, but there were likely minor deficiencies or areas where performance could have been better. For a critical service like aircraft depot maintenance, 'OK' is generally acceptable but warrants close monitoring to prevent potential degradation of service quality over the contract's life and to ensure future contracts achieve higher performance standards.

What is the historical spending pattern for C-130 program depot maintenance, particularly for foreign partners?

Historical spending on C-130 program depot maintenance, especially for foreign partners, is often managed through Foreign Military Sales (FMS) cases. These cases can involve direct contracts with U.S. defense contractors or procurements through U.S. government channels. Spending varies significantly based on the number of aircraft, the scope of maintenance required (e.g., scheduled overhauls, upgrades, unscheduled repairs), and the specific C-130 model. While specific aggregate data for Indonesian C-130 maintenance isn't readily available, the U.S. Air Force alone spends billions annually on maintaining its own extensive C-130 fleet, indicating the substantial cost associated with this type of heavy maintenance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation (UEI: 964725688)

Address: 2551 RIVA RD, ANNAPOLIS, MD, 03

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,975,264

Exercised Options: $18,975,264

Current Obligation: $18,975,264

Contract Characteristics

Cost or Pricing Data: YES

Timeline