DoD awards $7.8M for aircraft parts, but limited competition raises concerns about value

Contract Overview

Contract Amount: $7,871,165 ($7.9M)

Contractor: Performance Aircraft Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-04-18

End Date: 2025-10-10

Contract Duration: 906 days

Daily Burn Rate: $8.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SEALING FTSU CENTER TANK

Place of Performance

Location: TINKER AFB, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $7.9 million to PERFORMANCE AIRCRAFT SERVICES, INC. for work described as: SEALING FTSU CENTER TANK Key points: 1. Contract awarded through a sole-source justification, limiting price discovery and potentially increasing costs. 2. The fixed-price contract type offers some cost certainty, but the lack of competition is a significant risk indicator. 3. Performance Aircraft Services, Inc. is the sole awardee, with no indication of prior performance on similar contracts. 4. The contract is for aircraft parts, fitting within the broader Defense sector's extensive procurement needs. 5. No small business set-aside was utilized, suggesting limited opportunities for smaller firms in this specific award.

Value Assessment

Rating: questionable

The contract value of $7.8 million for aircraft parts is difficult to benchmark without more detailed specifications and market data. However, the sole-source award mechanism inherently limits the government's ability to secure the best possible price through competitive bidding. This lack of competition suggests that the pricing may not have been rigorously tested against market alternatives, raising questions about overall value for money. Further analysis would require comparing the specific parts and quantities to industry benchmarks and other government contracts for similar items.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning that only one vendor, Performance Aircraft Services, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they significantly reduce the potential for price competition and may lead to higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the most cost-effective solution. Without competing bids, there is less pressure on the contractor to offer the lowest possible price, potentially resulting in overspending.

Public Impact

The Department of the Navy benefits from the acquisition of necessary aircraft parts to maintain its fleet. This contract supports the operational readiness of naval aircraft by ensuring the availability of critical components. The geographic impact is primarily centered around the contractor's location in Oklahoma, though the parts will likely be used by naval aviation units nationwide. The contract supports jobs within the aerospace manufacturing sector, specifically related to aircraft parts production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value discovery.
Lack of transparency in the procurement process due to limited competition.
Potential for inflated costs without market-based price validation.
No clear indication of contractor's track record on similar sole-source awards.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Contract supports critical defense needs for aircraft parts.
Award is within the established duration and budget parameters.

Sector Analysis

The aerospace and defense industry is a significant sector for federal procurement. This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category (NAICS 336413), which is a specialized segment within the broader aerospace manufacturing market. Federal spending in this area is crucial for maintaining military readiness and technological superiority. Benchmarking this contract's value is challenging without specific part details, but the overall defense budget allocates billions annually to aircraft sustainment and parts procurement.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in fulfilling this contract are likely limited to direct supply chain roles, if any, and not as prime contractors. The absence of a set-aside suggests that the contracting agency did not identify specific opportunities or needs that could be met by small businesses under this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification for its necessity and the fairness of the price would be subject to internal review and potentially audits by the Government Accountability Office (GAO) or the Department of Defense Inspector General if specific concerns arise. Transparency is limited due to the non-competitive nature of the award.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency Contracts
Naval Aviation Sustainment Programs
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to lack of price competition.
Limited transparency in procurement process.
Dependency on a single supplier for critical parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.9 million to PERFORMANCE AIRCRAFT SERVICES, INC.. SEALING FTSU CENTER TANK

Who is the contractor on this award?

The obligated recipient is PERFORMANCE AIRCRAFT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $7.9 million.

What is the period of performance?

Start: 2023-04-18. End: 2025-10-10.

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

The provided data indicates the contract was awarded using a 'NOT COMPETED' method, which typically implies a sole-source justification. Common reasons for sole-source awards include the unique capability of a single contractor, urgent and compelling needs where competition is not feasible, or when only one responsible source exists. Without the specific justification document, it's impossible to determine the exact rationale. However, the lack of competition means the government must have determined that soliciting other vendors was impractical or not in the government's best interest for reasons that would need to be clearly documented and approved.

How does the $7.8 million contract value compare to similar aircraft parts procurements by the Department of the Navy?

Direct comparison of the $7.8 million contract value to similar procurements is challenging without knowing the specific aircraft parts, quantities, and technical specifications involved. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category is broad. However, the Department of the Navy procures a vast array of aircraft components, ranging from small, inexpensive parts to highly complex, expensive systems. A $7.8 million award for a single delivery order suggests it could be for a significant quantity of parts, a critical component, or a combination thereof. To assess value, one would need to compare unit prices for identical or comparable parts, consider the duration of supply, and evaluate the necessity of the specific items procured against other similar contracts awarded through competitive means.

What are the potential risks associated with a sole-source award for critical aircraft parts?

The primary risk associated with a sole-source award for critical aircraft parts is the potential for inflated pricing due to the absence of competitive pressure. Without multiple bids, the government may pay more than necessary. Another risk is dependency on a single supplier, which can create vulnerabilities in the supply chain if the contractor faces production issues, financial instability, or decides to discontinue the product line. Furthermore, the lack of competition can stifle innovation and limit the government's access to potentially better or more cost-effective solutions that other suppliers might offer. Ensuring quality and timely delivery also relies solely on the performance of the single awarded contractor.

What is the track record of Performance Aircraft Services, Inc. in fulfilling government contracts, particularly sole-source awards?

The provided data does not include specific details about the track record of Performance Aircraft Services, Inc. To assess their performance, one would need to consult government contract databases (like SAM.gov or FPDS) for past awards, contract performance ratings (e.g., CPARS), and any history of disputes or terminations. For sole-source awards, it's particularly important to understand if they have previously been awarded contracts under similar justifications and how effectively they performed. A lack of readily available performance data or a history of issues would increase the perceived risk of this current award.

How does this contract align with the Department of the Navy's overall spending on aircraft parts and maintenance?

This $7.8 million contract represents a specific instance of spending within the Department of the Navy's broader budget for aircraft sustainment and parts. The Navy operates a large and diverse fleet of aircraft, requiring continuous procurement of spare parts, components, and repair services. Annual spending on such items can run into billions of dollars across all naval aviation platforms. This particular contract, being a sole-source award for 'Other Aircraft Parts,' likely addresses a specific need for particular aircraft types or systems. Its alignment with overall spending depends on its criticality, the urgency of the requirement, and whether it represents a deviation from typical competitive procurement strategies for such items.

What are the implications of the 'FIRM FIXED PRICE' contract type in this sole-source scenario?

The 'FIRM FIXED PRICE' (FFP) contract type means that the contractor, Performance Aircraft Services, Inc., is obligated to complete the work for a predetermined price, regardless of the actual costs incurred. This shifts the cost risk from the government to the contractor. In a sole-source scenario, while the FFP type provides budget certainty for the government, it does not inherently guarantee the best price. The fixed price is negotiated once, without competitive benchmarking. Therefore, while the government knows its maximum liability, the fairness and competitiveness of that fixed price remain a key concern due to the lack of competition.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 600 E DALLAS RD #500, GRAPEVINE, TX, 76051

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

Financial Breakdown

Contract Ceiling: $7,871,165

Exercised Options: $7,871,165

Current Obligation: $7,871,165

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001918D0118

IDV Type: IDC

Timeline