DoD awards $2.27M for P-8A aircraft depot maintenance, highlighting specialized defense manufacturing needs

Contract Overview

Contract Amount: $2,270,830 ($2.3M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-18

End Date: 2025-03-10

Contract Duration: 173 days

Daily Burn Rate: $13.1K/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 AIRCRAFT 169550

Place of Performance

Location: WOOD DALE, DUPAGE County, ILLINOIS, 60191

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $2.3 million to AAR GOVERNMENT SERVICES, INC. for work described as: P-8A AIRFRAME DEPOT MAINTENANCE AND REPAIR ORDER FOR AIRCRAFT 169550 Key points: 1. Contract addresses critical sustainment for P-8A Poseidon aircraft, vital for maritime patrol and reconnaissance. 2. AAR Government Services, Inc. secured the award, indicating a competitive landscape for specialized aviation MRO. 3. The firm-fixed-price structure aims to control costs and provide predictable expenses for the Department of Defense. 4. This award falls within the broader context of sustained investment in advanced military aviation capabilities. 5. The contract duration of 173 days suggests a focused scope of work for depot-level maintenance. 6. Geographic concentration in Illinois for this specific maintenance task.

Value Assessment

Rating: good

The contract value of approximately $2.27 million for depot maintenance on a P-8A airframe appears reasonable given the specialized nature of military aircraft repair. Benchmarking against similar depot maintenance contracts for advanced platforms like the P-8A is challenging due to limited public data on specific repair costs. However, the firm-fixed-price contract type suggests a degree of cost certainty for the government, assuming the scope of work is well-defined. The award to AAR Government Services, Inc. indicates a competitive process that likely yielded a fair market price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the 'full and open' designation implies a robust competitive environment. This approach is generally favored as it allows the government to solicit offers from the widest possible range of sources, potentially leading to better pricing and innovative solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down prices and encourages efficiency among contractors, ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the U.S. Navy and its P-8A Poseidon fleet, ensuring operational readiness for critical missions. Services delivered include depot maintenance and repair for the P-8A airframe, crucial for extending aircraft lifespan and performance. The geographic impact is concentrated in Illinois, where the contractor is located, potentially supporting local jobs in the aerospace maintenance sector. Workforce implications include skilled technicians and engineers specializing in complex military aircraft maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen repair issues arise beyond the initial scope.
Dependence on a single contractor for a critical maintenance task could pose supply chain risks if not managed proactively.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Awarded through full and open competition, suggesting competitive pricing.
Addresses a critical need for P-8A aircraft sustainment, ensuring operational capability.

Sector Analysis

The defense aviation maintenance, repair, and overhaul (MRO) sector is highly specialized, requiring significant technical expertise, certifications, and infrastructure. The P-8A Poseidon is a sophisticated maritime patrol aircraft, and its depot-level maintenance demands adherence to stringent military specifications. Spending in this sector is driven by the need to maintain the operational readiness of aging and advanced military fleets. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of each aircraft platform and the specific maintenance requirements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, AAR Government Services, Inc., is a large business. While there is no direct set-aside, the contract may still offer subcontracting opportunities for small businesses within the aerospace MRO supply chain, depending on the prime contractor's subcontracting plan and the specific needs of the repair work.

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 with contract terms. The firm-fixed-price nature of the award provides a degree of accountability by fixing the cost for a defined scope of work. Transparency is facilitated through contract award databases, though detailed performance metrics are typically not publicly disclosed.

Related Government Programs

P-8A Poseidon Aircraft Sustainment
Defense Aviation Maintenance and Repair
Military Aircraft Depot Services
Aerospace Manufacturing and Repair

Risk Flags

Potential for scope creep if unforeseen maintenance issues arise.
Dependence on specialized parts and skilled labor for complex aircraft.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.3 million to AAR GOVERNMENT SERVICES, INC.. P-8A AIRFRAME DEPOT MAINTENANCE AND REPAIR ORDER FOR AIRCRAFT 169550

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 $2.3 million.

What is the period of performance?

Start: 2024-09-18. End: 2025-03-10.

What is the historical spending trend for P-8A airframe depot maintenance?

Historical spending data specifically for P-8A airframe depot maintenance is not readily available in the public domain. However, the U.S. Navy's overall budget for aircraft sustainment and readiness for its P-8A fleet is substantial, reflecting the aircraft's critical role. The P-8A is a relatively modern platform, so depot-level maintenance is likely focused on scheduled heavy checks, component overhauls, and addressing wear and tear from operational deployments. As the fleet ages, the demand for and cost of depot maintenance are expected to increase, necessitating consistent and adequate funding. Analyzing broader trends in military aircraft MRO spending can provide context, but specific P-8A depot maintenance costs are often embedded within larger program budgets or contract vehicles.

How does the awarded price compare to industry benchmarks for similar aircraft maintenance?

Directly comparing the $2.27 million award for P-8A airframe depot maintenance to industry benchmarks is challenging due to the proprietary nature of specific repair costs and the unique complexities of military aircraft. The P-8A is a specialized platform derived from a commercial airframe (Boeing 737) but heavily modified for military operations, requiring unique parts, processes, and certifications. General benchmarks for commercial aircraft heavy maintenance can provide a very rough comparison, but military depot maintenance typically involves more extensive inspections, structural repairs, avionics integration, and adherence to stringent military specifications, often leading to higher costs. The firm-fixed-price contract suggests that AAR Government Services, Inc. has assessed these costs and bid competitively, implying the price is considered fair within the context of the government's requirements and the competitive bidding process.

What are the key performance indicators (KPIs) for this contract, and how is performance monitored?

While specific Key Performance Indicators (KPIs) for this particular contract are not publicly detailed, typical KPIs for aircraft depot maintenance contracts include on-time delivery, adherence to quality standards (e.g., zero major defects upon redelivery), completion of all specified maintenance tasks, and cost control within the firm-fixed-price. Performance monitoring is primarily the responsibility of the Defense Contract Management Agency (DCMA). DCMA representatives would likely oversee the contractor's progress, review maintenance records, conduct inspections, and ensure compliance with technical directives and contractual requirements throughout the performance period. The contractor is expected to provide regular progress reports to the government.

What is the track record of AAR Government Services, Inc. in performing similar defense maintenance contracts?

AAR Government Services, Inc. has a significant track record in providing aviation support services, including maintenance, repair, and overhaul (MRO), to government and defense clients. They are a well-established entity within the aerospace and defense industry, frequently awarded contracts for aircraft sustainment, component repair, and logistics support. Their experience often spans various military aircraft platforms. While specific details on their performance for P-8A depot maintenance prior to this award would require deeper investigation into past contract awards and performance reviews, their consistent presence in the government contracting space suggests a capability to meet the demanding requirements of defense aviation maintenance.

What are the potential risks associated with this contract, and what mitigation strategies are in place?

Potential risks include unforeseen technical issues discovered during maintenance that could exceed the fixed price scope, leading to change orders or delays. There's also a risk related to the availability of specialized parts or skilled labor. Mitigation strategies often involve robust initial technical assessments, clear contract language defining the scope of work and exclusions, and contingency planning by the contractor. The firm-fixed-price structure itself acts as a risk mitigation tool for the government by capping costs. The DCMA's oversight also plays a crucial role in identifying and addressing risks proactively throughout the contract performance period.

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: $2,270,830

Exercised Options: $2,270,830

Current Obligation: $2,270,830

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