DoD awards $2.46M for P-8A aircraft depot maintenance, highlighting specialized defense contracting needs

Contract Overview

Contract Amount: $2,455,380 ($2.5M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-02-29

End Date: 2024-08-23

Contract Duration: 176 days

Daily Burn Rate: $14.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: P-8A AIRFRAME DEPOT MAINTENANCE AND REPAIR ORDER FOR P-8A AIRCRAFT BUNO 169337

Place of Performance

Location: WOOD DALE, DUPAGE County, ILLINOIS, 60191

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $2.5 million to AAR GOVERNMENT SERVICES, INC. for work described as: P-8A AIRFRAME DEPOT MAINTENANCE AND REPAIR ORDER FOR P-8A AIRCRAFT BUNO 169337 Key points: 1. Contract focuses on specialized depot maintenance for a critical P-8A aircraft, indicating a need for unique technical expertise. 2. The award was made under full and open competition, suggesting a competitive market for these specialized services. 3. A single delivery order was issued, implying this is part of a larger, potentially indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The firm-fixed-price structure aims to control costs for the government, shifting some financial risk to the contractor. 5. The short duration of the order (176 days) suggests a focus on immediate or scheduled maintenance rather than long-term fleet support. 6. The contractor, AAR Government Services, Inc., has experience in aviation maintenance, aligning with the contract's requirements.

Value Assessment

Rating: good

The contract value of $2.46 million for depot maintenance on a single P-8A aircraft appears reasonable given the specialized nature of military aircraft repair. Benchmarking against similar depot maintenance contracts for advanced aircraft is challenging due to proprietary data and unique configurations. However, the firm-fixed-price structure provides cost certainty for this specific order. The value reflects the complexity and specialized labor required for such maintenance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors were solicited and allowed to bid. The presence of a single delivery order suggests that this award is likely part of a broader contract vehicle. The level of competition for this specific order is not detailed, but the initial award mechanism implies a competitive environment for securing these specialized maintenance services.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and service quality for specialized defense needs.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who operate and rely on the P-8A Poseidon aircraft for maritime patrol and reconnaissance. This contract ensures the continued operational readiness and safety of a specific P-8A aircraft (BUNO 169337). The services delivered are critical depot-level maintenance and repair, addressing complex technical issues beyond routine servicing. The geographic impact is localized to the maintenance facility where the work is performed, likely within the United States. Workforce implications include the employment of skilled technicians and mechanics specializing in advanced aerospace systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen complex issues arise beyond the scope of the firm-fixed-price order.
Dependence on a single contractor for specialized maintenance could create future sole-source risks if competition diminishes.
The short duration might indicate a reactive maintenance approach rather than proactive, long-term fleet sustainment planning.

Positive Signals

Awarded under full and open competition, suggesting a healthy market for these services.
Firm-fixed-price contract type provides cost certainty for this specific maintenance task.
Contractor (AAR Government Services) has established experience in aviation maintenance and support.
Focus on a critical asset (P-8A) ensures readiness for vital national security missions.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technological requirements, and significant government investment. Depot maintenance for advanced platforms like the P-8A represents a niche but critical segment. Spending in this area is driven by the need to maintain the operational readiness of aging and sophisticated military fleets. Comparable spending benchmarks are difficult to ascertain publicly due to the proprietary nature of maintenance procedures and pricing for specific aircraft models.

Small Business Impact

This contract was not specifically set aside for small businesses, and the prime contractor, AAR Government Services, Inc., is a large business. There is no explicit mention of subcontracting requirements for small businesses within this specific delivery order. The impact on the small business ecosystem is therefore indirect, relying on the prime contractor's potential to engage small businesses as subcontractors if needed for specialized support.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm-fixed-price nature of the contract provides a degree of accountability by capping the government's financial liability. Transparency is facilitated through contract award databases, although detailed performance metrics are typically not publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

P-8A Poseidon Aircraft Sustainment
Naval Aviation Maintenance Programs
Defense Depot Maintenance Contracts
Aircraft Component Repair Services
Aerospace Manufacturing and Repair

Risk Flags

Specialized Maintenance Requirement
Potential for Unforeseen Technical Issues
Firm-Fixed-Price Budget Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.5 million to AAR GOVERNMENT SERVICES, INC.. P-8A AIRFRAME DEPOT MAINTENANCE AND REPAIR ORDER FOR P-8A AIRCRAFT BUNO 169337

Who is the contractor on this award?

The obligated recipient is AAR GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $2.5 million.

What is the period of performance?

Start: 2024-02-29. End: 2024-08-23.

What is AAR Government Services, Inc.'s track record with similar P-8A maintenance contracts or other large military aircraft depot maintenance?

AAR Government Services, Inc. has a significant history in aviation support and maintenance, including work on various military aircraft platforms. While specific details on prior P-8A depot maintenance contracts awarded to AAR are not readily available in the public domain for this exact scope, the company's broader experience in aircraft maintenance, repair, and overhaul (MRO) for government and commercial clients suggests a relevant capability. Their portfolio often includes complex structural repairs, component overhauls, and modifications for diverse aircraft types. Assessing their specific track record for the P-8A would require deeper analysis of past performance evaluations and contract histories, which are often sensitive or not publicly disseminated in detail. However, their position as a recipient of this contract indicates they met the government's criteria for technical expertise and capacity.

How does the $2.46 million cost for this single P-8A maintenance order compare to historical spending on similar depot-level maintenance for this aircraft type?

Direct comparison of this $2.46 million delivery order for P-8A depot maintenance against historical spending is challenging due to several factors. Firstly, depot maintenance tasks can vary significantly in scope and complexity; one aircraft's needs might be far greater than another's. Secondly, contract vehicles like IDIQs often have varying task orders with different pricing structures and durations. Publicly available data typically aggregates spending over longer periods or by broader categories, making it difficult to isolate the cost for a single aircraft's comprehensive depot maintenance. However, considering the advanced avionics, specialized sensors, and complex systems of the P-8A, a multi-million dollar cost for depot-level work, including extensive inspections, component replacements, and structural repairs, is generally within the expected range for such high-value military assets. The firm-fixed-price nature of this order suggests a defined scope was agreed upon to manage costs.

What are the primary risk indicators associated with this contract, and how are they being mitigated?

Key risk indicators for this contract include the potential for unforeseen technical complexities arising during maintenance, which could strain the firm-fixed-price budget. Another risk is the reliance on a specific contractor for specialized skills, potentially leading to future dependency if competition is limited. Schedule delays are also a risk, given the critical operational role of the P-8A. Mitigation strategies are embedded in the contract structure: the firm-fixed-price shifts financial risk to the contractor, incentivizing efficient completion. The initial award under full and open competition suggests a competitive market, reducing long-term dependency risks. Oversight by the DCMA is crucial for monitoring progress and addressing issues proactively. The short duration of the order may also indicate a focus on specific, manageable tasks, reducing the likelihood of extensive, unforeseen problems.

How effective is the firm-fixed-price contract type in ensuring value for money for this specialized aircraft maintenance?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money for well-defined services like this P-8A depot maintenance order. It establishes a ceiling price, obligating the contractor to absorb costs exceeding that amount, thereby incentivizing them to manage resources efficiently and control expenses. This structure provides significant cost certainty for the government. For specialized maintenance, where the scope of work can be clearly delineated through detailed specifications and inspections, FFP is advantageous. It minimizes the risk of cost growth due to contractor inefficiencies. However, if unforeseen, complex issues arise that were not reasonably foreseeable during the bidding process, the FFP structure could potentially lead to disputes or require contract modifications, impacting the initially perceived value. The effectiveness hinges on the accuracy of the initial scope definition and the contractor's ability to execute within the agreed price.

What does the 'full and open competition' designation imply about the availability of qualified contractors for P-8A depot maintenance?

The 'full and open competition' designation for this P-8A depot maintenance contract implies that the government actively solicited bids from all responsible sources capable of meeting the requirements. This suggests that there is a sufficient number of qualified contractors in the market possessing the specialized technical expertise, facilities, and certifications necessary to perform depot-level maintenance on advanced military aircraft like the P-8A. It indicates that the market is not overly concentrated or restricted, allowing for a competitive bidding process. This approach is intended to foster price discovery, encourage innovation, and ultimately secure the best possible value for the government and taxpayers by leveraging the capabilities of multiple industry players rather than relying on a limited pool.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0001915R2004

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AAR Government Services Inc.

Address: 1100 N WOOD DALE RD, WOOD DALE, IL, 60191

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

Financial Breakdown

Contract Ceiling: $2,455,380

Exercised Options: $2,455,380

Current Obligation: $2,455,380

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001918D0111

IDV Type: IDC

Timeline