Air Force awards $14.8M for aircraft shelters, with limited competition impacting price discovery

Contract Overview

Contract Amount: $14,852,706 ($14.9M)

Contractor: RED Canyon Perikin JV, LLC

Awarding Agency: Department of Defense

Start Date: 2025-06-09

End Date: 2026-01-31

Contract Duration: 236 days

Daily Burn Rate: $62.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: LARGE AIRCRAFT MAINTENANCE SHELTERS (LAMS) INITIAL STRUCTURE PROCUREMENT

Place of Performance

Location: SCOTTSDALE, MARICOPA County, ARIZONA, 85250

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to RED CANYON PERIKIN JV, LLC for work described as: LARGE AIRCRAFT MAINTENANCE SHELTERS (LAMS) INITIAL STRUCTURE PROCUREMENT Key points: 1. The contract's value of $14.8 million for prefabricated aircraft shelters represents a significant investment in Air Force infrastructure. 2. Limited competition for this contract raises concerns about achieving optimal value for taxpayer dollars. 3. The fixed-price contract type aims to control costs, but the lack of robust competition may have inflated the final price. 4. The procurement is for Large Aircraft Maintenance Shelters (LAMS), indicating a need for specialized, large-scale facilities. 5. The contract is a delivery order under an unspecified basic agreement, suggesting a potential for future orders. 6. The project is located in Arizona, a state with a notable Air Force presence, implying strategic placement of these facilities.

Value Assessment

Rating: fair

The contract value of $14.8 million for prefabricated aircraft shelters appears substantial. Without direct comparable contract data for similar LAMS procurements, it is difficult to definitively benchmark the value. However, the limited competition (sole-source) inherently suggests a higher risk of paying a premium compared to a fully competed contract. The fixed-price nature provides some cost certainty, but the absence of competitive pressure means the government may not have secured the most cost-effective solution.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, RED CANYON PERIKIN JV, LLC, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for specific reasons (e.g., unique capabilities, urgent needs), they significantly limit price discovery and can lead to higher costs for the government as there is no market pressure to offer the lowest price.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price for these critical infrastructure assets, as competitive forces that drive down costs are absent.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive essential maintenance facilities for large aircraft. The services delivered include the procurement and likely construction of prefabricated metal buildings designed as aircraft maintenance shelters. The geographic impact is concentrated in Arizona, likely at an Air Force installation requiring enhanced maintenance capabilities. Workforce implications may include jobs in manufacturing and construction related to the fabrication and assembly of these specialized shelters.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if not closely managed due to limited competition.
The specific capabilities of RED CANYON PERIKIN JV, LLC are not detailed, raising questions about why other firms were not considered.

Positive Signals

Fixed-price contract type provides cost certainty once awarded.
Procurement of specialized LAMS addresses a critical infrastructure need for the Air Force.
Delivery order structure may allow for phased implementation and management.
Project located in Arizona, potentially supporting regional economic activity.

Sector Analysis

The prefabricated metal building and component manufacturing sector (NAICS 332311) is a key part of the construction and industrial manufacturing landscape. This contract falls within this sector, focusing on specialized, large-scale structures. The market for such facilities is often driven by government defense spending and infrastructure development. Benchmarking this specific contract is challenging without more data on similar large aircraft shelter projects, but the overall industry involves significant capital investment and specialized engineering capabilities.

Small Business Impact

The data indicates that small business participation is not a primary focus for this specific contract, as the awardee is a joint venture and the contract was sole-source. There is no explicit mention of small business set-asides or subcontracting requirements. This sole-source nature limits opportunities for small businesses to compete for this particular work, potentially impacting the small business ecosystem unless they are involved as subcontractors to the prime awardee.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards and delivery schedules. Transparency may be limited due to the sole-source nature of the award, with justifications for this approach needing to be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Air Force Base Infrastructure Modernization Programs
Military Construction Projects
Aircraft Hangar and Maintenance Facility Procurement
Department of Defense Facilities Management

Risk Flags

Sole-source award raises concerns about competition and potential price inflation.
Lack of detailed justification for sole-source award limits transparency.
No explicit small business subcontracting requirements mentioned.
Contract value is substantial, requiring close monitoring for cost control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to RED CANYON PERIKIN JV, LLC. LARGE AIRCRAFT MAINTENANCE SHELTERS (LAMS) INITIAL STRUCTURE PROCUREMENT

Who is the contractor on this award?

The obligated recipient is RED CANYON PERIKIN JV, 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 $14.9 million.

What is the period of performance?

Start: 2025-06-09. End: 2026-01-31.

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

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to ascertain the precise rationale. This lack of transparency is a concern, as it prevents a thorough assessment of whether competitive alternatives were genuinely unavailable or if the sole-source path was chosen for other reasons.

How does the price of these shelters compare to market rates for similar structures?

Benchmarking the price of these Large Aircraft Maintenance Shelters (LAMS) against market rates is challenging without specific comparable contract data. The total award is $14.8 million. The contract duration is 236 days, suggesting a relatively rapid procurement and delivery timeline. However, the 'sole-source' nature of the award means that competitive market forces, which typically drive prices down, were absent. Therefore, it is highly probable that the price is higher than what might have been achieved through a fully competed procurement. A detailed cost analysis by the contracting officer would be necessary to determine if the price is fair and reasonable under the circumstances, but without that analysis or comparable data, a definitive statement on market rate comparison cannot be made.

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

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, typical KPIs for construction and procurement contracts of this nature would likely include adherence to the delivery schedule (by January 31, 2026), quality of materials and construction meeting specified standards, compliance with design specifications for the LAMS, and potentially safety metrics during any on-site work. Performance measurement would be conducted by the Air Force's contracting officer's representative (COR) or a designated project manager, who would monitor progress, conduct inspections, and review documentation submitted by the contractor, RED CANYON PERIKIN JV, LLC, against the contract requirements.

What is the track record of RED CANYON PERIKIN JV, LLC in delivering similar large-scale infrastructure projects?

Information regarding the specific track record of RED CANYON PERIKIN JV, LLC in delivering similar large-scale infrastructure projects, particularly aircraft maintenance shelters, is not provided in the data. As a joint venture, its performance history may be a composite of its individual members' experiences or a reflection of its own operational history since formation. Given the sole-source nature of this award, it is crucial for the awarding agency (Department of the Air Force) to have conducted thorough due diligence on the contractor's capabilities, past performance, and financial stability to ensure successful project completion. Without access to contractor performance databases or specific project histories, a detailed assessment of their track record is not possible from the given information.

What is the historical spending trend for aircraft maintenance shelters within the Department of the Air Force?

The provided data focuses solely on this specific $14.8 million delivery order and does not offer historical spending trends for aircraft maintenance shelters within the Department of the Air Force (DAF). To analyze historical spending, one would need access to broader contract databases that track procurements for similar facilities over multiple fiscal years. Such an analysis would reveal patterns in contract values, competition levels, and the types of contractors awarded these projects. Understanding these trends is crucial for identifying potential increases or decreases in spending, assessing the overall investment in maintenance infrastructure, and evaluating the effectiveness of procurement strategies over time.

Industry Classification

NAICS: Manufacturing › Architectural and Structural Metals Manufacturing › Prefabricated Metal Building and Component Manufacturing

Product/Service Code: PREFAB STRUCTURES/SCAFFOLDING

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8840 E CHAPARRAL RD STE 145, SCOTTSDALE, AZ, 85250

Business Categories: American Indian Owned Business, Category Business, Corporate Entity Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, SBA Certified 8 a Joint Venture, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,852,706

Exercised Options: $14,852,706

Current Obligation: $14,852,706

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA910125DB005

IDV Type: IDC

Timeline