Vertex Aerospace LLC awarded $473.8M for NTWL aircraft maintenance, a significant investment in naval aviation support

Contract Overview

Contract Amount: $473,798,642 ($473.8M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2022-05-02

End Date: 2026-09-02

Contract Duration: 1,584 days

Daily Burn Rate: $299.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF:OT:IGF NAVAL TEST WING ATLANTIC (NTWL) AIRCRAFT MAINTENANCE

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $473.8 million to VERTEX AEROSPACE LLC for work described as: IGF:OT:IGF NAVAL TEST WING ATLANTIC (NTWL) AIRCRAFT MAINTENANCE Key points: 1. The contract value represents a substantial commitment to maintaining naval aviation readiness. 2. Competition dynamics for this large-scale support contract are crucial for ensuring optimal pricing. 3. Performance risk is moderate, given the complexity of aircraft maintenance and the contractor's experience. 4. This contract supports a critical function within the Department of the Navy's aviation enterprise. 5. The duration of the contract suggests a long-term need for these specialized maintenance services. 6. The cost-plus-fixed-fee structure requires careful oversight to manage expenditures effectively.

Value Assessment

Rating: good

Benchmarking this contract's value against similar large-scale aircraft maintenance agreements is essential. While the total award is significant, the per-unit cost for specific maintenance tasks or the overall cost relative to the fleet size would provide a clearer picture of value. The fixed fee component offers some cost predictability, but the cost-plus nature necessitates diligent monitoring of direct costs to ensure efficiency and prevent overruns. Comparisons with historical spending on similar services by the Navy or other branches could reveal trends in pricing and contractor performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to drive down prices and encourage innovation. The presence of four bidders (no) suggests a reasonably competitive market for these services, though the specific number of proposals received and their technical/cost evaluations would provide a more nuanced understanding of the competition's intensity.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a more efficient marketplace, leading to better pricing and service quality. It ensures that the government explores a wide range of options, maximizing the potential for cost savings and superior performance.

Public Impact

Naval aircrews and operational units benefit from reliable and well-maintained aircraft. The contract ensures the continued operational readiness of naval aviation assets. Services are likely concentrated around naval air stations where the NTWL operates. This contract supports a specialized workforce of aircraft mechanics and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in a cost-plus-fixed-fee contract if not rigorously managed.
Ensuring consistent quality across all maintenance tasks over the contract's multi-year duration.
Dependency on a single contractor for critical aircraft maintenance functions.
Managing scope creep and ensuring adherence to the defined delivery orders.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Contractor has experience in aerospace services, potentially mitigating performance risks.
Long contract duration allows for stable planning and resource allocation.
Clear definition of services through delivery orders provides structured execution.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft maintenance and support services. The market for such services is characterized by high technical barriers to entry, stringent regulatory requirements, and significant demand from government entities. The total value of this contract is substantial, reflecting the complexity and scale of maintaining naval aircraft fleets. Comparable spending benchmarks would involve analyzing other large-scale maintenance contracts awarded by the Department of Defense to various aerospace service providers.

Small Business Impact

The data indicates that small business participation (sb: false) was not a primary set-aside criterion for this contract. While the prime contractor, Vertex Aerospace LLC, may be a large business, there is an opportunity and expectation for subcontracting to small businesses. The extent to which small businesses are involved in the supply chain for this contract will impact the small business ecosystem within the aerospace maintenance sector.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures will be embedded within the delivery order system and performance metrics outlined in the contract. Transparency is facilitated through contract award databases, but detailed operational oversight and Inspector General jurisdiction would focus on ensuring compliance with terms, preventing fraud, and verifying the efficient use of funds.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Aircraft Depot Maintenance Programs
Fleet Readiness Centers (FRCs)
Defense Contract Management Agency (DCMA) Oversight

Risk Flags

Cost Overrun Risk
Performance Degradation Over Time
Technological Obsolescence
Budgetary Uncertainty
Dependency on Single Contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $473.8 million to VERTEX AEROSPACE LLC. IGF:OT:IGF NAVAL TEST WING ATLANTIC (NTWL) AIRCRAFT MAINTENANCE

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $473.8 million.

What is the period of performance?

Start: 2022-05-02. End: 2026-09-02.

What is Vertex Aerospace LLC's track record with similar large-scale aircraft maintenance contracts for the Department of Defense?

Vertex Aerospace LLC has a history of performing aircraft maintenance and support services for the Department of Defense. Analyzing their past performance on contracts of similar size and scope, particularly those involving naval aviation, is crucial. This includes reviewing past performance evaluations, any contract disputes or terminations, and their ability to meet delivery schedules and quality standards. Their experience with specific aircraft types supported by the Naval Test Wing Atlantic would be a key indicator of their suitability and capability for this contract. A review of their financial stability and operational capacity would also be pertinent to assess their ability to handle a contract of this magnitude over its multi-year duration.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for aircraft maintenance, and what are the implications for value?

The Cost-Plus-Fixed-Fee (CPFF) contract type is common for complex services where the scope of work can be difficult to define precisely upfront, such as aircraft maintenance. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure provides flexibility for evolving maintenance needs but carries a risk of cost overruns if costs are not tightly controlled. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less price certainty for the government but can be more adaptable. Compared to Cost-Plus-Incentive-Fee (CPIF) contracts, the profit is fixed, reducing the incentive for the contractor to aggressively control costs beyond what is necessary to meet performance standards. For taxpayers, the value hinges on robust government oversight to ensure costs are reasonable and the fixed fee remains appropriate for the services rendered.

What are the primary risks associated with the long duration (1584 days) of this aircraft maintenance contract?

The long duration of this contract presents several risks. Firstly, there's the risk of technological obsolescence; aircraft and maintenance techniques can evolve rapidly, potentially making the contracted services less relevant or efficient over time. Secondly, economic volatility could impact the cost of labor, parts, and materials, potentially leading to cost increases that are passed on to the government, especially within the cost-reimbursable portion of the CPFF structure. Thirdly, contractor performance degradation over time is a possibility; initial high performance might wane without continuous oversight and performance management. Lastly, changes in defense priorities or budget constraints could lead to contract modifications, scope reductions, or even early termination, creating uncertainty for both the contractor and the government's long-term planning.

How does the Naval Test Wing Atlantic's (NTWL) mission influence the specific requirements and criticality of this aircraft maintenance contract?

The Naval Test Wing Atlantic (NTWL) is responsible for testing and evaluating new and modified naval aircraft systems and components. This mission demands exceptionally high standards of aircraft readiness, reliability, and safety, as failures during testing can be costly and compromise developmental timelines. Consequently, the aircraft maintenance contract supporting NTWL must ensure meticulous attention to detail, adherence to stringent quality control, and rapid response to emergent maintenance needs. The criticality of the NTWL's mission means that any lapse in maintenance could directly impact the pace of naval aviation innovation and the successful fielding of advanced capabilities, making this contract vital for national defense readiness.

What is the historical spending trend for aircraft maintenance services within the Department of the Navy, and how does this contract fit?

Historical spending on aircraft maintenance within the Department of the Navy has consistently represented a significant portion of its overall budget, reflecting the high operational tempo and the capital-intensive nature of naval aviation. Spending trends are influenced by fleet size, aircraft modernization programs, and the mix of organic (in-house) versus contracted maintenance. This $473.8 million contract for NTWL aircraft maintenance fits within this pattern as a substantial, long-term commitment to outsourced support for a specialized operational unit. It suggests a strategic decision to leverage external expertise for specific maintenance functions, potentially to enhance readiness, manage costs, or access specialized skills not readily available internally. Analyzing past spending on similar contracts would reveal if this award represents an increase, decrease, or stable level of investment in contracted maintenance.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110

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

Financial Breakdown

Contract Ceiling: $940,924,111

Exercised Options: $560,516,899

Current Obligation: $473,798,642

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $6,686,940

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: N6134019D1010

IDV Type: IDC

Timeline