Air Force awards $318.5M for KC-135 training systems, with CAE USA Inc. as prime contractor

Contract Overview

Contract Amount: $318,513,868 ($318.5M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2021-04-01

End Date: 2028-08-31

Contract Duration: 2,709 days

Daily Burn Rate: $117.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC-135 TRAINING SYSTEMS

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33634

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $318.5 million to CAE USA INC. for work described as: KC-135 TRAINING SYSTEMS Key points: 1. Contract value represents a significant investment in maintaining and enhancing pilot proficiency for the KC-135 fleet. 2. The duration of the contract suggests a long-term commitment to training system development and support. 3. The award was made under full and open competition, indicating a robust bidding process. 4. The fixed-price contract type aims to provide cost certainty for the government. 5. The geographic focus on Florida suggests a concentration of training activities or facilities in that region. 6. The contract's scope likely includes simulation, curriculum development, and maintenance of training equipment.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific details on the scope of training services and system components. However, the total contract value over its period of performance suggests a substantial investment in a critical capability. Comparisons to similar large-scale training system contracts for major aircraft platforms would be necessary for a more precise value assessment. The fixed-price nature of the contract provides a degree of cost control, but the overall value for money will depend on the effectiveness and efficiency of the training delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bids suggests a competitive environment, which typically leads to better pricing and innovation. The level of competition is a positive indicator for price discovery and ensures the government receives competitive offers.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging the best possible solutions for training needs.

Public Impact

Air Force pilots and aircrews operating the KC-135 Stratotanker will benefit from enhanced and modernized training. The contract will deliver advanced training systems, potentially including simulators, virtual reality tools, and updated curricula. Training activities are likely concentrated in Florida, impacting the local economy and workforce in that region. The contract supports jobs in the aerospace and defense sector, particularly in areas related to simulation and training technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if contract scope expands beyond initial estimates.
Risk of technological obsolescence if training systems are not continuously updated.
Dependence on a single contractor for critical training infrastructure could pose a risk if performance issues arise.

Positive Signals

Full and open competition suggests a strong market offering and competitive pricing.
Fixed-price contract type provides cost certainty for the government.
Long contract duration allows for sustained development and improvement of training capabilities.
The award to a known entity like CAE USA Inc. may indicate a track record of performance in similar contracts.

Sector Analysis

The aerospace training and simulation market is a significant segment within the broader defense industry. This contract falls within the domain of specialized training systems, which are crucial for maintaining operational readiness for complex aircraft platforms like the KC-135. The market is characterized by high technological barriers to entry and a demand for sophisticated, realistic training environments. Spending in this sector is often driven by the need for continuous pilot proficiency and adaptation to evolving threats and technologies.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor is CAE USA Inc., there is no explicit information on subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether CAE USA Inc. actively seeks out small business subcontractors for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are inherent in the contract terms, including performance metrics and delivery schedules. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircrew Training Systems
Flight Simulators
Defense Training and Simulation
Aircraft Maintenance Training
KC-135 Stratotanker Operations

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for cost growth if scope changes or unforeseen issues arise.
Dependence on contractor for critical training infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $318.5 million to CAE USA INC.. KC-135 TRAINING SYSTEMS

Who is the contractor on this award?

The obligated recipient is CAE USA 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 $318.5 million.

What is the period of performance?

Start: 2021-04-01. End: 2028-08-31.

What is the historical spending pattern for KC-135 training systems by the Department of the Air Force?

Analyzing historical spending on KC-135 training systems requires a review of past contracts and task orders related to simulators, curriculum development, and maintenance. Without access to a comprehensive historical database for this specific system, it's difficult to provide exact figures. However, the Air Force consistently invests in training to maintain pilot proficiency for its aging fleets. The current $318.5 million contract over approximately 7 years suggests an average annual spend of roughly $45 million. This figure should be compared against previous contract values for similar services to identify trends in cost, scope, and contractor performance over time. Fluctuations in spending could be attributed to major upgrades, technology insertions, or changes in operational tempo.

How does the per-unit cost of training hours under this contract compare to industry benchmarks?

Determining the per-unit cost of training hours requires detailed information on the total number of training hours to be delivered under this contract and the total contract value allocated to those hours. This data is not explicitly provided in the summary. To perform a meaningful comparison, one would need to isolate the cost associated with flight hours, simulator hours, or other training metrics. Industry benchmarks for pilot training vary significantly based on aircraft type, simulator fidelity, and the provider. For a high-fidelity simulator training for a strategic tanker like the KC-135, costs can range from hundreds to thousands of dollars per hour. A thorough analysis would involve comparing the effective hourly rate derived from this contract against publicly available data or industry reports for similar training services.

What is CAE USA Inc.'s track record with similar large-scale defense training contracts?

CAE USA Inc. is a well-established defense contractor with extensive experience in developing and providing simulation and training solutions for various military platforms. They have a significant history of supporting air forces globally, including contracts for fighter jets, helicopters, and transport aircraft. Their portfolio often includes full-mission simulators, procedural trainers, and integrated training systems. CAE's track record typically involves delivering complex training systems on time and within budget, though like any large contractor, they may have faced challenges on specific projects. Their ability to secure this substantial KC-135 training systems contract suggests a strong performance history and a competitive offering that meets the Air Force's requirements.

What are the key performance indicators (KPIs) for this contract, and how are they measured?

Key performance indicators (KPIs) for this contract are not detailed in the provided summary but are typically defined within the contract's Performance Work Statement (PWS). Common KPIs for training system contracts include simulator availability and reliability rates (e.g., aiming for 95% uptime), training effectiveness metrics (e.g., pilot proficiency scores, pass/fail rates on evaluations), adherence to training schedules, and timely delivery of system upgrades or maintenance. Performance is usually measured through regular reporting by the contractor, government acceptance testing, and direct observation by Air Force training personnel. Failure to meet these KPIs can result in contractually defined remedies, such as performance incentives or penalties.

What is the potential risk associated with the long duration (2709 days) of this contract?

The long duration of this contract, approximately 7.4 years, presents several potential risks. Firstly, technological advancements in simulation and training could outpace the capabilities of the systems being procured, leading to obsolescence before the contract ends. Secondly, economic fluctuations or changes in defense priorities could impact the sustained funding required for the full contract period. Thirdly, there's a risk of contractor performance degradation over such an extended period, or a loss of institutional knowledge if key personnel depart. Finally, the government's ability to adapt to evolving training needs might be constrained by the fixed nature of the contract, potentially requiring costly modifications or change orders.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA862120R0022

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4908 TAMPA W BLVD, TAMPA, FL, 33634

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $685,011,929

Exercised Options: $347,656,382

Current Obligation: $318,513,868

Actual Outlays: $756,592

Subaward Activity

Number of Subawards: 65

Total Subaward Amount: $44,019,521

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862115D6267

IDV Type: IDC

Timeline