DoD awards $6.4M for LC-130H depot maintenance to Air New Zealand, a sole-source contract

Contract Overview

Contract Amount: $6,441,093 ($6.4M)

Contractor: AIR NEW Zealand Limited

Awarding Agency: Department of Defense

Start Date: 2024-02-08

End Date: 2025-11-29

Contract Duration: 660 days

Daily Burn Rate: $9.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LC-130H PROGRAMMED DEPOT MAINTENANCE

Plain-Language Summary

Department of Defense obligated $6.4 million to AIR NEW ZEALAND LIMITED for work described as: LC-130H PROGRAMMED DEPOT MAINTENANCE Key points: 1. The contract value of $6.4 million for programmed depot maintenance on LC-130H aircraft appears to be a significant investment for a single delivery order. 2. The sole-source nature of this award raises questions about the extent of market research and potential for competitive pricing. 3. The duration of the contract (660 days) suggests a substantial maintenance effort is required. 4. The absence of small business participation noted in the data warrants further investigation into subcontracting opportunities. 5. Benchmarking this specific maintenance task against similar contracts is crucial for assessing value for money.

Value Assessment

Rating: questionable

The contract value of $6.4 million for programmed depot maintenance on LC-130H aircraft is difficult to benchmark without more specific details on the scope of work. Given it's a sole-source award, a direct comparison to competitively bid contracts is not feasible. The pricing structure (Firm Fixed Price) offers some cost certainty, but the lack of competition means there's no external validation of whether this price represents the best value achievable in a competitive market. Further analysis would require understanding the specific maintenance tasks performed and comparing them to industry standards or historical data for similar aircraft.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of Defense did not conduct a competitive solicitation. This typically occurs when only one responsible source is available or authorized by statute. The lack of competition limits the government's ability to explore different pricing structures and potentially achieve lower costs through a bidding process. It also means that the market dynamics that drive down prices in competitive environments were not leveraged for this procurement.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competition. Without a bidding process, there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiaries of this contract are the U.S. Air Force units operating the LC-130H aircraft, ensuring their continued operational readiness. The services delivered include programmed depot maintenance, which is critical for the long-term airworthiness and reliability of these specialized aircraft. The geographic impact is primarily within the continental United States where the maintenance is performed, but the operational impact extends globally wherever LC-130H aircraft are deployed. This contract supports specialized aviation maintenance jobs, potentially including highly skilled technicians and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of transparency regarding the justification for sole-source procurement.
No indication of small business participation or subcontracting goals.
Limited public information on the specific maintenance tasks included in the $6.4M award.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Contract awarded to a known entity (Air New Zealand) which may have specialized capabilities.
Contract duration suggests a comprehensive maintenance effort to ensure aircraft longevity.

Sector Analysis

The aerospace and defense industry is characterized by complex supply chains and specialized maintenance requirements. Programmed depot maintenance for military aircraft is a critical segment, often involving original equipment manufacturers or highly specialized third-party providers. The market for such services can be limited due to the unique nature of military platforms like the LC-130H. Spending benchmarks for aircraft maintenance vary widely based on aircraft type, age, and the scope of work, but large sums are typical for comprehensive depot-level overhauls.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information available regarding subcontracting plans or performance. This suggests that the primary contractor, Air New Zealand, is expected to perform the majority of the work, or that subcontracting opportunities for small businesses were not a consideration in this sole-source award. Further investigation into the contractor's typical subcontracting practices would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures, potentially involving the Defense Contract Management Agency (DCMA) given their role listed in the data. Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver specified services at an agreed-upon price. Transparency is limited due to the sole-source nature of the award and the proprietary details of depot maintenance. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Air Force Materiel Command
Logistics and Sustainment Programs
Aircraft Maintenance Contracts
LC-130 Aircraft Operations
Defense Logistics Agency

Risk Flags

Sole-source award without clear justification.
Potential for inflated pricing due to lack of competition.
Limited transparency on scope of work and performance metrics.
No stated small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.4 million to AIR NEW ZEALAND LIMITED. LC-130H PROGRAMMED DEPOT MAINTENANCE

Who is the contractor on this award?

The obligated recipient is AIR NEW ZEALAND LIMITED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $6.4 million.

What is the period of performance?

Start: 2024-02-08. End: 2025-11-29.

What is the specific scope of work included in the $6.4 million for LC-130H programmed depot maintenance?

The provided data does not detail the specific scope of work for the LC-130H programmed depot maintenance. Programmed depot maintenance typically involves extensive inspections, repairs, overhauls, and component replacements to ensure the aircraft meets its full service life. For the LC-130H, this could include structural repairs, engine overhauls, avionics upgrades, and system checks. The $6.4 million figure represents the total contract value for the period between February 8, 2024, and November 29, 2025. Without a detailed statement of work, it is challenging to assess the value proposition or compare it accurately to industry benchmarks.

What is the justification for awarding this contract on a sole-source basis to Air New Zealand?

The justification for this sole-source award is not detailed in the provided data. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or when there is a compelling urgency that precludes full and open competition. For specialized aircraft maintenance, a contractor might possess unique technical expertise, proprietary data, or specific tooling required for a particular aircraft type. The Department of Defense would have had to document and approve this justification, likely through a Justification and Approval (J&A) document, which is often publicly available through sources like the Federal Business Opportunities (SAM.gov) website.

How does the $6.4 million contract value compare to historical spending on LC-130H depot maintenance?

Comparing the current $6.4 million contract value to historical spending on LC-130H depot maintenance requires access to historical contract data. The provided data only includes details for this specific delivery order. To perform a meaningful comparison, one would need to aggregate past contracts for similar maintenance services on the LC-130H, accounting for inflation and changes in the scope of work over time. Without this historical context, it's difficult to determine if this award represents an increase, decrease, or stable level of spending for this type of maintenance.

What are the potential risks associated with a sole-source contract for critical aircraft maintenance?

Sole-source contracts for critical aircraft maintenance carry several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved through a competitive bidding process, potentially resulting in less value for taxpayer money. Secondly, there's a risk of complacency from the contractor, as there is no direct competitive pressure to innovate or improve efficiency. Thirdly, reliance on a single source can create vulnerabilities in the supply chain or service delivery if the contractor experiences financial difficulties, operational issues, or geopolitical challenges. Finally, the government may have less leverage in negotiating terms and conditions compared to a competitive scenario.

What is Air New Zealand's track record in performing U.S. military aircraft maintenance?

The provided data indicates Air New Zealand Limited is the contractor for this LC-130H programmed depot maintenance. While Air New Zealand is a well-established airline, its specific track record in performing U.S. military aircraft depot maintenance is not detailed here. Military depot maintenance often requires adherence to stringent military specifications, certifications, and security protocols that may differ from commercial aviation maintenance. Further research would be needed to ascertain the extent of their experience with U.S. military contracts, particularly for specialized aircraft like the C-130 variants, and their performance history on such contracts.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 125 ORCHARD RD, CHRISTCHURCH

Business Categories: Category Business, Foreign Owned, International Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $6,441,093

Exercised Options: $6,441,093

Current Obligation: $6,441,093

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA850424D0001

IDV Type: IDC

Timeline