DoD spent $9.9M on air transport in Afghanistan, awarded to AAR Airlift Group via full and open competition

Contract Overview

Contract Amount: $9,898,198 ($9.9M)

Contractor: AAR Airlift Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-04-02

End Date: 2008-01-31

Contract Duration: 304 days

Daily Burn Rate: $32.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PASSENGER AND CARGO MOVEMENT IN AFGHANISTAN.

Place of Performance

Location: MOYOCK, CURRITUCK County, NORTH CAROLINA, 27958

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $9.9 million to AAR AIRLIFT GROUP, INC. for work described as: PASSENGER AND CARGO MOVEMENT IN AFGHANISTAN. Key points: 1. The contract value of $9.9M for air transport services in Afghanistan represents a significant investment in logistical support. 2. Full and open competition suggests a potentially competitive bidding process, which can lead to better pricing. 3. The contract duration of 304 days indicates a medium-term need for these services. 4. The award to AAR Airlift Group, Inc. places this contract within the context of established aviation support providers. 5. The fixed-price contract type aims to control costs for the government. 6. The absence of small business set-aside flags suggests this was not specifically targeted for smaller enterprises.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of services, such as aircraft type, routes, and passenger/cargo capacity. However, $9.9 million for approximately 10 months of air transport in a complex operational environment like Afghanistan suggests a moderate cost. Comparing it to similar contracts for airlift in similar theaters would be necessary for a more precise value assessment. The firm fixed-price nature provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of 2 bidders suggests a degree of competition, though the exact number of interested parties and the rigor of the evaluation process are not detailed. A higher number of bidders typically correlates with more competitive pricing.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by driving down prices and encouraging efficiency from contractors.

Public Impact

This contract directly supported U.S. military operations in Afghanistan by providing essential passenger and cargo movement. The services facilitated troop deployment, resupply, and personnel movement, contributing to mission effectiveness. The geographic impact is concentrated within Afghanistan, a critical theater of operations. The contract likely supported a workforce of pilots, maintenance crews, and logistical personnel employed by AAR Airlift Group.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed price did not adequately account for unforeseen operational challenges in Afghanistan.
Dependence on a single contractor for critical airlift services could pose a risk if performance issues arise.
Limited transparency on the specific performance metrics and quality control measures employed.

Positive Signals

Awarded through full and open competition, suggesting a fair and accessible process.
Firm fixed-price contract type provides cost predictability for the government.
Contract awarded to a known entity in the aviation services sector, potentially indicating experience and capability.

Sector Analysis

This contract falls within the broader aerospace and defense services sector, specifically focusing on aviation support and logistics. The market for military airlift services is characterized by a few large, specialized contractors capable of operating in demanding environments. Spending in this area is often driven by geopolitical requirements and troop presence in theaters of operation. Comparable spending benchmarks would involve analyzing other airlift contracts awarded by the DoD in similar operational theaters.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary competition was likely among larger, established aerospace and defense contractors. There is no direct information on subcontracting plans, but typically, prime contractors of this size may engage small businesses for specific support services, though it's not a guaranteed outcome or requirement based on this data alone.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Transportation Command (USTRANSCOM) and potentially the Department of Defense's Inspector General. Accountability measures are usually embedded within the contract terms, including performance standards and reporting requirements. Transparency is often limited for operational contracts, but contract award details and basic performance information are generally publicly available through federal procurement databases.

Related Government Programs

Military Airlift Command
Logistics Support Services
Afghanistan Reconstruction
Contingency Operations Support
Air Charter Services

Risk Flags

Operational Risk in Afghanistan
Contractor Performance Monitoring
Market Concentration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.9 million to AAR AIRLIFT GROUP, INC.. PASSENGER AND CARGO MOVEMENT IN AFGHANISTAN.

Who is the contractor on this award?

The obligated recipient is AAR AIRLIFT GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $9.9 million.

What is the period of performance?

Start: 2007-04-02. End: 2008-01-31.

What was the specific nature of the 'passenger and cargo movement' services provided under this contract?

The contract description 'PASSENGER AND CARGO MOVEMENT IN AFGHANISTAN' and the North American Industry Classification System (NAICS) code '481211' (Nonscheduled Chartered Passenger Air Transportation) indicate that the services involved the chartering of aircraft to transport personnel and goods. This likely included moving troops, equipment, and supplies between various locations within Afghanistan to support military operations. The 'nonscheduled' aspect implies flexibility in flight planning based on operational needs rather than a fixed timetable.

How does the awarded amount of $9.9 million compare to typical spending for similar airlift services in operational theaters?

Without detailed service level agreements, specific aircraft types, and operational tempo, a direct comparison is difficult. However, $9.9 million for approximately 10 months of service in a high-demand, high-risk environment like Afghanistan is within a plausible range for specialized airlift. Contracts for similar services in other theaters can range from millions to tens of millions of dollars annually, depending on the scale and complexity. Factors like fuel costs, security requirements, and regulatory compliance in Afghanistan would influence the pricing. Further analysis would require comparing this contract's specifics against other USTRANSCOM or DoD airlift contracts.

What are the potential risks associated with a firm fixed-price contract for air transport in Afghanistan?

A firm fixed-price (FFP) contract aims to provide cost certainty. However, in an environment like Afghanistan, unforeseen operational challenges, security threats, fluctuating fuel prices, or changes in mission requirements could strain the contractor's ability to meet the FFP terms without impacting profitability or performance. If the initial price was set too low or didn't account for potential risks, the contractor might face financial losses or be tempted to cut corners on safety or service quality. Conversely, if the price was set too high to account for excessive risk, taxpayers could overpay.

What does the limited number of bidders (2) suggest about the market for this type of service?

The fact that only two bids were received suggests that the market for providing nonscheduled chartered passenger air transportation in Afghanistan, specifically for the DoD, may be concentrated among a limited number of qualified providers. This could be due to high barriers to entry, such as the need for specialized aircraft, extensive experience operating in complex environments, stringent security clearances, and established relationships with government agencies. While competition occurred, a smaller pool of bidders might indicate less downward pressure on pricing compared to a market with numerous potential suppliers.

What is AAR Airlift Group, Inc.'s track record with government contracts, particularly for airlift services?

AAR Airlift Group, Inc. is a known entity in the aviation services sector, often involved in government contracting. While this specific contract was awarded in 2007, AAR has a history of providing aviation support, including airlift, to military and government clients. Their track record would typically be assessed by the awarding agency based on past performance evaluations, on-time delivery, safety records, and overall adherence to contract terms in previous engagements. A review of their contract history would reveal the extent and nature of their prior work with the DoD and other federal agencies.

How has spending on airlift services in Afghanistan evolved over time, and does this contract represent a typical spending level?

Spending on airlift services in Afghanistan has historically been substantial due to the prolonged military presence and the challenging terrain, which necessitates air transport for logistics and personnel movement. This $9.9 million contract, awarded in 2007, falls within a period of significant U.S. military activity in Afghanistan. Spending levels for airlift services have fluctuated based on troop levels, mission scope, and the security situation. While this figure represents a notable investment, it should be viewed within the context of the overall U.S. budget for the Afghanistan mission during that era, which ran into the tens of billions annually.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Passenger Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HTC71107Q0018

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aarcorp (UEI: 005425814)

Address: 114 HANGAR LN, CAMDEN, NC, 01

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

Financial Breakdown

Contract Ceiling: $9,898,198

Exercised Options: $9,898,198

Current Obligation: $9,898,198

Timeline