DoD's $85.9M Aerospace Ground Equipment Repair Contract Lacked Competition, Raising Cost Concerns

Contract Overview

Contract Amount: $85,880,514 ($85.9M)

Contractor: AL Raha Group for Technical S Ervices

Awarding Agency: Department of Defense

Start Date: 2014-12-26

End Date: 2019-02-15

Contract Duration: 1,512 days

Daily Burn Rate: $56.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF REPAIR, REFURBISHMENT&REPLACEMENT OF AEROSPACE GROUND EQUIPMENT (AGE)&SPECIAL PURPOSE VEHICLES (SPV)

Plain-Language Summary

Department of Defense obligated $85.9 million to AL RAHA GROUP FOR TECHNICAL S ERVICES for work described as: IGF::OT::IGF REPAIR, REFURBISHMENT&REPLACEMENT OF AEROSPACE GROUND EQUIPMENT (AGE)&SPECIAL PURPOSE VEHICLES (SPV) Key points: 1. The contract awarded to AL RAHA GROUP FOR TECHNICAL S ERVICES for $85.9M lacked competition. 2. The primary risk is inflated pricing due to the absence of competitive bidding. 3. The sector is Defense, specifically repair and maintenance of aerospace ground equipment. 4. The contract type is Firm Fixed Price, which can mitigate some cost risks if well-defined.

Value Assessment

Rating: questionable

The contract value of $85.9M for repair and refurbishment of aerospace ground equipment is substantial. Without competitive data, it's difficult to benchmark pricing accurately, but the lack of competition suggests potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a limited source selection process. This significantly impacts price discovery, as the government likely did not benefit from multiple bids to drive down costs.

Taxpayer Impact: The lack of competition may have resulted in taxpayers paying more than necessary for these services.

Public Impact

Military readiness could be impacted if essential aerospace ground equipment is not maintained efficiently and cost-effectively. Taxpayer funds are at risk of being spent inefficiently due to the absence of competitive pressure. Transparency in defense spending is reduced when contracts are not openly competed. The long duration of the contract (over 4 years) amplifies the potential financial impact of non-competitive awards.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Positive Signals

Firm Fixed Price contract type can provide cost certainty if scope is well-defined.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on the maintenance and repair of critical aerospace ground equipment. Spending benchmarks in this area are highly variable, but non-competitive awards often exceed market rates.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). The lack of competition also suggests that opportunities for small businesses to participate were likely limited.

Oversight & Accountability

Oversight is crucial for non-competitive contracts to ensure fair pricing and prevent waste. The contracting activity (DCMA) should have robust mechanisms to validate costs and performance in the absence of market competition.

Related Government Programs

Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated pricing
Limited transparency in award process
Significant contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.9 million to AL RAHA GROUP FOR TECHNICAL S ERVICES. IGF::OT::IGF REPAIR, REFURBISHMENT&REPLACEMENT OF AEROSPACE GROUND EQUIPMENT (AGE)&SPECIAL PURPOSE VEHICLES (SPV)

Who is the contractor on this award?

The obligated recipient is AL RAHA GROUP FOR TECHNICAL S ERVICES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $85.9 million.

What is the period of performance?

Start: 2014-12-26. End: 2019-02-15.

What specific justification was provided for limiting competition on this significant contract?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION'. A detailed review of the contract file would be necessary to understand the specific justification, such as a sole-source requirement, urgent need, or lack of qualified sources. Without this justification, it's difficult to assess the validity of the limited competition.

How was the 'fair and reasonable' price determination made without competitive bids?

Determining a 'fair and reasonable' price without competition typically involves cost analysis, price analysis based on historical data, or comparison to similar commercial items. Given the lack of competition, the agency likely relied on detailed cost breakdowns from the contractor and potentially market research for similar services, though this is less reliable than actual bids.

What is the estimated cost impact of this non-competitive award compared to a fully competed scenario?

Estimating the precise cost impact is challenging without detailed cost data and a competitive benchmark. However, studies consistently show that non-competitive awards can be significantly higher, potentially ranging from 10% to 50% or more above what might be achieved through full and open competition, representing a substantial potential loss of taxpayer value.

Industry Classification

NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance

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

Address: BUILDING 40 PRINCE FAWWAZ BIN, RIYADH

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $95,796,806

Exercised Options: $95,796,806

Current Obligation: $85,880,514

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline