Navy's $278M contract for air transportation support awarded to Kay and Associates, Inc. with questionable value

Contract Overview

Contract Amount: $277,974,078 ($278.0M)

Contractor: KAY and Associates, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-12-20

End Date: 2022-01-31

Contract Duration: 1,868 days

Daily Burn Rate: $148.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF

Plain-Language Summary

Department of Defense obligated $278.0 million to KAY AND ASSOCIATES, INC. for work described as: IGF::OT::IGF Key points: 1. The contract's value proposition is unclear due to a lack of detailed performance metrics and benchmarking. 2. Competition was limited, raising concerns about potential overpricing and reduced innovation. 3. The long duration and cost-plus structure introduce significant cost overrun risks. 4. Performance context is sparse, making it difficult to assess the effectiveness of services rendered. 5. This contract falls within the broader Defense sector, specifically supporting air transportation logistics.

Value Assessment

Rating: questionable

The total award amount of $277,974,077.96 for 'Other Support Activities for Air Transportation' over approximately six years presents a high expenditure. Without specific performance metrics or comparable contract data, it is difficult to benchmark the value for money. The cost-plus fixed fee (CPFF) contract type, while allowing for flexibility, often leads to higher costs than fixed-price contracts if not managed rigorously. The lack of detailed justification for the pricing structure makes a definitive value assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition scenario. The justification for this approach is not provided in the available data. Sole-source awards can limit price discovery and potentially lead to higher costs for the government compared to fully competed contracts. The absence of multiple bidders means the government did not benefit from competitive pressures to drive down prices or improve service offerings.

Taxpayer Impact: The lack of competition means taxpayers may have paid a premium for these services, as there was no market pressure to ensure the most cost-effective solution was selected.

Public Impact

The primary beneficiaries are likely the Department of the Navy and its air operations, receiving support services. Services delivered include 'Other Support Activities for Air Transportation,' which could encompass a range of logistical, maintenance, or operational support. The geographic impact is likely concentrated around Navy air facilities where these support activities are crucial. Workforce implications could include the direct employment of personnel by Kay and Associates, Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed fee contract type can incentivize contractor to increase costs.
Sole-source award limits price discovery and competitive pressure.
Long contract duration increases exposure to cost escalation and performance drift.
Lack of detailed performance metrics hinders objective assessment of value.
Absence of competition justification raises concerns about procurement process integrity.

Positive Signals

Contract awarded to an established entity, potentially indicating prior experience and capability.
The contract addresses a specific need within air transportation support for the Navy.
Definitive contract award provides a clear framework for the engagement.

Sector Analysis

The defense logistics and support services sector is critical for maintaining operational readiness. Contracts like this, supporting air transportation, are essential for the efficient functioning of military aviation. The market for such services is often characterized by specialized providers capable of meeting stringent government requirements. Benchmarking against similar support contracts within the Department of Defense would be necessary for a comprehensive value assessment, but such data is not readily available.

Small Business Impact

The data indicates that small business participation (ss and sb fields) was not a stated requirement or focus for this contract. There is no indication of small business set-asides or subcontracting plans. This suggests that the primary contractor, Kay and Associates, Inc., likely handled the majority of the work, with limited direct benefit or opportunity for the small business ecosystem in this specific award.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) and potentially the Department of the Navy's Inspector General. Accountability measures would be tied to the contract's performance clauses and reporting requirements. Transparency is limited by the sole-source nature of the award and the lack of publicly available detailed performance data. The Inspector General's office may conduct audits or investigations if specific concerns arise regarding waste, fraud, or abuse.

Related Government Programs

Department of Defense Logistics Support Services
Naval Air Operations Support
Air Transportation Services Contracts
Cost-Plus Fixed Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award without clear justification.
Cost-plus contract type with potential for cost overruns.
Lack of publicly available performance metrics.
Limited transparency regarding pricing structure.
Long contract duration increases risk exposure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $278.0 million to KAY AND ASSOCIATES, INC.. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is KAY AND ASSOCIATES, 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 $278.0 million.

What is the period of performance?

Start: 2016-12-20. End: 2022-01-31.

What specific services does 'Other Support Activities for Air Transportation' encompass under this contract?

The provided data classifies the contract under NAICS code 488190, 'Other Support Activities for Air Transportation.' This broad category typically includes services such as airport operations, air traffic control support, aircraft maintenance and repair services (excluding manufacturing), flight support services, and other related activities necessary for the functioning of air transportation. For this specific contract with Kay and Associates, Inc., the exact scope would be detailed in the contract's Statement of Work (SOW). Without access to the SOW, it's presumed to cover a range of operational and logistical support critical to the Navy's air assets, potentially including ground handling, refueling coordination, aircrew support, and facility maintenance at air installations.

How does the performance of Kay and Associates, Inc. on this contract compare to industry benchmarks or previous contracts?

The available data does not include specific performance metrics or historical performance records for Kay and Associates, Inc. on this particular contract. Therefore, a direct comparison to industry benchmarks or previous contracts is not possible. To assess performance, one would need access to contractor performance assessment reporting (CPARs), quality assurance reviews, and potentially data on key performance indicators (KPIs) outlined in the contract's Statement of Work. The absence of this information makes it difficult to determine if the contractor is meeting expectations, exceeding them, or falling short, and how their performance aligns with industry standards for similar support activities.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The data explicitly states the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which signifies a sole-source or limited competition procurement. The specific justification for this determination is not provided in the abbreviated data. Typically, sole-source awards require a formal justification and approval (J&A) process, citing reasons such as the existence of only one responsible source, urgent and compelling needs, or specific national security requirements that preclude competition. Without the J&A document, it is impossible to ascertain the government's rationale for foregoing a competitive process, which raises concerns about potential missed opportunities for better pricing and innovation.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this service?

The Cost Plus Fixed Fee (CPFF) contract type presents several risks. While it allows for flexibility in scope and provides the contractor with a guaranteed profit margin (the fixed fee), it shifts much of the financial risk to the government. The contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can incentivize the contractor to incur higher costs, as their fee remains constant regardless of the total cost. Effective oversight and robust cost accounting controls by the government are crucial to mitigate the risk of cost overruns and ensure that costs are reasonable and allocable to the contract. For a contract of this magnitude and duration, the potential for cost escalation is significant.

How does the total spending on 'Other Support Activities for Air Transportation' by the Department of the Navy compare to other branches or agencies?

The provided data focuses solely on this specific contract awarded by the Department of the Navy. It does not offer a comparative analysis of spending across different branches of the military (e.g., Air Force, Army) or other federal agencies for similar 'Other Support Activities for Air Transportation' services. To conduct such a comparison, one would need access to broader federal procurement databases (like USASpending.gov) and perform detailed analysis filtering by agency, service category (NAICS codes), and fiscal year. Without this broader dataset, it's impossible to contextualize the Navy's spending in this category relative to the entire government.

What is the historical spending trend for this specific contract or similar services provided by Kay and Associates, Inc. to the government?

The provided data pertains to a single definitive contract awarded to Kay and Associates, Inc. with a start date of December 20, 2016, and an end date of January 31, 2022, totaling approximately $278 million. This data point does not reveal historical spending trends for this specific contract (e.g., annual spending, modifications) or for Kay and Associates, Inc. providing similar services to the government over time. To understand historical spending, one would need to query federal procurement databases for all contracts awarded to this vendor under relevant NAICS codes or service descriptions across all agencies and fiscal years.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0042115R0058

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 165 N ARLINGTON HEIGHTS RD STE 150, BUFFALO GROVE, IL, 60089

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $320,369,603

Exercised Options: $320,369,603

Current Obligation: $277,974,078

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline