DoD's $30M airlift contract with Phoenix Air Group shows fair value despite limited competition signals

Contract Overview

Contract Amount: $30,002,300 ($30.0M)

Contractor: Phoenix AIR Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-02-01

End Date: 2024-01-31

Contract Duration: 1,825 days

Daily Burn Rate: $16.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: IGF::OT::IGF POINT MUGU CHARTERED PASSENGER AIRLIFT - AIR TRANSPORTATION SERVICES

Place of Performance

Location: OXNARD, VENTURA County, CALIFORNIA, 93033

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.0 million to PHOENIX AIR GROUP, INC. for work described as: IGF::OT::IGF POINT MUGU CHARTERED PASSENGER AIRLIFT - AIR TRANSPORTATION SERVICES Key points: 1. Value appears reasonable given the service scope and duration, though direct comparisons are challenging. 2. Competition was full and open, but only one bid was received, raising questions about market engagement. 3. Performance risk seems low due to the established nature of air charter services. 4. The contract duration of five years suggests a stable, long-term need for these services. 5. This contract falls within the broader Defense transportation and logistics sector. 6. No small business set-aside was utilized, but subcontracting opportunities are not explicitly detailed.

Value Assessment

Rating: good

The contract's total value of approximately $30 million over five years averages to $6 million annually. While specific benchmarking for chartered passenger airlift is difficult without more granular data on routes and passenger loads, the price appears to be within a reasonable range for dedicated charter services. The firm-fixed-price structure helps control costs for the government. Compared to potential per-flight costs or per-passenger-mile rates for similar military airlift operations, this contract seems to offer fair value, assuming consistent service delivery.

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 offers. However, only one bid was received. This could suggest several factors: potential lack of market interest, insufficient outreach, or that only one contractor met the stringent requirements. While the process was open, the low number of bids limits the government's ability to leverage competitive pressure for optimal pricing and terms.

Taxpayer Impact: A single bid in a full and open competition means taxpayers may not have benefited from the most competitive pricing achievable if multiple bidders had participated. It suggests potential missed opportunities for cost savings.

Public Impact

Military personnel and authorized travelers benefit from reliable air transportation. Services ensure mission readiness and logistical support for Department of Defense operations. The primary geographic impact is within the continental United States and potentially overseas locations served by Point Mugu. The contract supports the aviation services industry and potentially pilots and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Low number of bids received despite full and open competition could indicate market issues or insufficient solicitation effectiveness.
Lack of detailed performance metrics in the provided data makes it difficult to assess service quality beyond contract fulfillment.
The long contract duration might limit flexibility if needs change significantly over the five-year period.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
The contract was awarded through a full and open competition process, adhering to standard procurement procedures.
The contractor, Phoenix Air Group, Inc., has a history of providing aviation services, suggesting operational experience.

Sector Analysis

This contract falls within the broader air transportation services sector, specifically focusing on chartered passenger airlift. The market for government aviation services is substantial, encompassing various types of aircraft and mission requirements. Benchmarking this specific contract is challenging without detailed route, passenger, and aircraft specifications. However, government contracts for air charter services are common across multiple agencies, including Defense, for personnel transport, special missions, and logistical support.

Small Business Impact

The contract data indicates that this was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Phoenix Air Group, Inc. is a medium-sized business. The absence of specific small business provisions means that direct benefits to the small business ecosystem through this particular contract are unlikely, unless the prime contractor voluntarily engages small business subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of USTRANSCOM and potentially the relevant Inspector General offices within the Department of Defense. The firm-fixed-price nature of the contract provides a degree of accountability by fixing the cost. Performance monitoring would be crucial to ensure the contractor meets all service level agreements and operational requirements. Transparency is generally maintained through contract award databases, though specific performance reports may not always be publicly accessible.

Related Government Programs

Military Airlift Command
Logistics Readiness
Transportation Services
Air Charter Services
Government Aviation Contracts

Risk Flags

Low Bidder Participation
Potential Market Concentration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.0 million to PHOENIX AIR GROUP, INC.. IGF::OT::IGF POINT MUGU CHARTERED PASSENGER AIRLIFT - AIR TRANSPORTATION SERVICES

Who is the contractor on this award?

The obligated recipient is PHOENIX AIR GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $30.0 million.

What is the period of performance?

Start: 2019-02-01. End: 2024-01-31.

What is the track record of Phoenix Air Group, Inc. in fulfilling government contracts, particularly for airlift services?

Phoenix Air Group, Inc. has a history of providing aviation services to the U.S. government, including charter flights. While specific details on past performance for similar airlift contracts are not provided in this data snippet, their engagement in this $30 million contract with USTRANSCOM suggests a level of capability and experience deemed sufficient by the Department of Defense. A deeper dive into their contract history, including past performance reviews and any reported issues or successes, would be necessary for a comprehensive assessment of their track record. Generally, companies awarded multi-year, significant contracts like this have demonstrated reliability in prior engagements.

How does the average annual cost of this contract compare to similar government airlift services?

The contract averages approximately $6 million per year ($30 million over 5 years). Benchmarking this figure against similar government airlift services is challenging without specific details on routes, aircraft types, passenger capacity, and frequency of flights. However, government airlift needs can vary significantly, from routine personnel transport to specialized mission support. If this contract primarily covers routine personnel transport for a specific base or region, the annual cost might be considered moderate. If it involves extensive international travel or specialized aircraft, the cost could be highly competitive. Direct comparisons would require access to data on comparable contracts with similar operational parameters.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential service disruptions (e.g., mechanical issues, weather delays), contractor performance failures, and cost overruns (though mitigated by the firm-fixed-price structure). Mitigation strategies likely involve stringent performance monitoring by USTRANSCOM, clear service level agreements, and contingency planning by the contractor. The firm-fixed-price nature inherently transfers some cost risk to the contractor. The long duration also presents a risk of changing operational needs, which might be addressed through contract modification clauses or future re-competition. The low bid count also presents a risk of over-reliance on a single provider.

What is the overall effectiveness of this contract in meeting the DoD's airlift needs?

Based on the available data, the contract appears effective in securing dedicated airlift services for the DoD, specifically supporting operations potentially linked to Point Mugu. The five-year duration suggests a stable, ongoing requirement. Effectiveness is primarily measured by the reliability and availability of the chartered flights as per the contract terms. Without specific performance metrics or user feedback, a definitive assessment of 'effectiveness' is limited. However, the renewal or continuation of such contracts often implies satisfactory performance in meeting the agency's logistical and personnel movement requirements.

How has historical spending on similar airlift services by the DoD trended over the past five years?

Analyzing historical spending trends for similar airlift services requires access to comprehensive federal procurement databases. Generally, spending on transportation and logistics, including air charter services, can fluctuate based on geopolitical events, operational tempo, and budget allocations. The DoD consistently allocates significant funds to airlift capabilities, both through organic fleets and contracted services. Factors like increased deployments or specific mission requirements can drive up spending in this category. Without specific data points for 'chartered passenger airlift' over the past five years, it's difficult to provide a precise trend, but overall defense logistics spending remains a substantial and often growing budget item.

What are the implications of receiving only one bid for a full and open competition contract?

Receiving only one bid in a full and open competition suggests potential issues with market engagement or contractor interest. It could mean the solicitation requirements were too restrictive, the anticipated profit margin was insufficient for multiple bidders, or the market for such specialized services is limited. For taxpayers, this lack of competition can lead to suboptimal pricing, as the government loses the benefit of competitive pressure driving down costs. It also concentrates risk on the single awarded contractor and may indicate a need for the agency to reassess its procurement strategy for future solicitations to encourage broader participation.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 PHOENIX AIR DR SW, CARTERSVILLE, GA, 30120

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

Financial Breakdown

Contract Ceiling: $30,002,300

Exercised Options: $30,002,300

Current Obligation: $30,002,300

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71119DCC56

IDV Type: IDC

Timeline