DoD's $36.6M rotary wing support contract awarded to Erickson Helicopters, Inc. for Guam operations

Contract Overview

Contract Amount: $36,607,670 ($36.6M)

Contractor: Erickson Helicopters, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-09-01

End Date: 2021-11-30

Contract Duration: 1,916 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF, VERTICAL REPLENISHMENT AND ROTARY WING SUPPORT

Place of Performance

Location: HAGATNA, GUAM County, GUAM, 96910

Plain-Language Summary

Department of Defense obligated $36.6 million to ERICKSON HELICOPTERS, INC. for work described as: IGF::OT::IGF, VERTICAL REPLENISHMENT AND ROTARY WING SUPPORT Key points: 1. Contract value represents a significant investment in aerial logistics for the Pacific region. 2. Full and open competition suggests a potentially competitive bidding process. 3. The contract duration of over 1900 days indicates a long-term need for these services. 4. Fixed-price contract type may offer cost certainty but could limit flexibility. 5. The specific nature of 'vertical replenishment' points to critical supply chain support. 6. Geographic focus on Guam highlights strategic importance in the Indo-Pacific.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services provided and the operational tempo. However, the duration and scope suggest a substantial requirement. The firm fixed-price structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the price was set competitively. Further analysis would require comparing the per-flight hour costs or equivalent metrics against industry standards for similar rotary-wing support in comparable geographic regions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With four bidders participating, the level of competition appears moderate. This suggests that while multiple companies vied for the contract, the market may not be saturated with providers for this specialized service. The presence of multiple bidders generally supports price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. The moderate number of bidders suggests a reasonable balance between competition and the availability of qualified contractors.

Public Impact

The Department of the Navy benefits from sustained aerial logistics capabilities in Guam. Services include vital vertical replenishment, ensuring operational readiness. The geographic impact is concentrated in Guam, supporting U.S. military presence in the Indo-Pacific. The contract supports specialized aviation jobs within the contractor's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep if contract scope expands beyond initial fixed-price parameters.
Dependence on a single contractor for critical logistical support in a remote location.
Risk of service disruption if the contractor faces operational or financial challenges.

Positive Signals

Award to a single, established provider suggests reliability and experience.
Firm fixed-price contract provides budget predictability.
Long-term contract duration allows for stable planning and resource allocation.

Sector Analysis

This contract falls within the Air Transportation and Logistics sector, specifically focusing on specialized rotary-wing aircraft operations for military support. The market for such services is often niche, requiring specific certifications, aircraft, and operational expertise, particularly in remote or strategic locations like Guam. Spending in this area is driven by defense readiness requirements and the need for flexible, on-demand aerial support for resupply and personnel movement.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit information on subcontracting plans. Given the specialized nature of rotary-wing support and the prime contractor's likely size, the direct impact on small businesses may be limited unless Erickson Helicopters, Inc. actively engages them for subcontracting opportunities. Further investigation into subcontracting goals would be necessary to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The firm fixed-price nature of the award provides a degree of accountability by placing cost risk on the contractor. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not always be publicly accessible. The Inspector General's office for the Department of Defense would have jurisdiction over investigations into fraud, waste, or abuse related to this contract.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Pacific Air Mobility Command
Defense Logistics Agency (DLA) Aviation Support
Rotary Wing Aircraft Maintenance Services
Air Charter Services

Risk Flags

Long-term contract duration may increase risk of scope creep or changing requirements.
Geographic isolation of Guam could present logistical challenges for maintenance and support.
Dependence on specialized aircraft could lead to vulnerabilities if fleet availability is impacted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.6 million to ERICKSON HELICOPTERS, INC.. IGF::OT::IGF, VERTICAL REPLENISHMENT AND ROTARY WING SUPPORT

Who is the contractor on this award?

The obligated recipient is ERICKSON HELICOPTERS, 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 $36.6 million.

What is the period of performance?

Start: 2016-09-01. End: 2021-11-30.

What is the historical spending trend for vertical replenishment and rotary wing support in the Pacific theater by the Department of Defense?

Analyzing historical spending trends for vertical replenishment and rotary wing support in the Pacific theater by the Department of Defense requires access to detailed historical contract data. Generally, spending in this region has been increasing due to strategic shifts and heightened geopolitical activity. Contracts for such services are often long-term and substantial, reflecting the vast distances and logistical challenges. Factors influencing spending include the number of active military installations, the operational tempo, and the specific types of aircraft and support required. Without specific aggregated data for this category and region, it's difficult to provide precise figures, but the trend indicates sustained or growing investment to maintain operational readiness and power projection capabilities in the Indo-Pacific.

How does the per-hour cost of Erickson Helicopters, Inc.'s service compare to industry benchmarks for similar rotary-wing support in comparable geographic regions?

Determining the precise per-hour cost for Erickson Helicopters, Inc. under this contract requires detailed service level agreements and operational data not publicly available. However, the total contract value of approximately $36.6 million over roughly 1916 days (approximately 5.25 years) suggests an average annual value of around $6.97 million. If we assume a significant portion of this is for flight hours, the per-hour rate would depend heavily on the number of hours flown annually and the specific aircraft utilized. Rotary-wing support in remote or strategic locations like Guam often commands a premium due to logistical complexities, specialized maintenance, and potentially higher insurance costs. Industry benchmarks for similar heavy-lift helicopter operations can range widely, from several thousand dollars per hour for basic charter to upwards of $10,000-$20,000+ per hour for specialized military support, including crew, maintenance, and operational overhead. A definitive comparison would necessitate knowing the exact aircraft type, utilization rate, and included services.

What specific types of rotary-wing aircraft are being utilized under this contract, and what is their operational capability?

The contract specifies 'rotary wing support' and 'vertical replenishment,' but the exact types of aircraft are not detailed in the provided data. Erickson Helicopters, Inc. is known for operating heavy-lift helicopters such as the Erickson S-64 Air Crane. These aircraft are highly capable, often used for heavy lifting, firefighting, and specialized logistics. For vertical replenishment, they could be employed to transfer cargo, equipment, or personnel between ships, shore facilities, or remote operational sites. The operational capability would include significant payload capacity, range, and the ability to operate in challenging environmental conditions typical of maritime and island environments. The specific model and configuration would dictate precise performance metrics like lift capacity, speed, and endurance.

What are the key performance indicators (KPIs) used to measure the success and effectiveness of this contract?

Key Performance Indicators (KPIs) for a contract like this typically focus on operational availability, mission completion rates, safety, and cost control. For vertical replenishment and rotary-wing support, specific KPIs might include: Aircraft Availability Rate (percentage of time aircraft are ready for mission), On-Time Mission Performance (percentage of missions completed within scheduled windows), Cargo/Personnel Delivery Accuracy (ensuring correct items are delivered to the right locations), Mission Success Rate (percentage of tasked missions successfully accomplished), Safety Incident Rate (tracking accidents, near misses, and safety violations), and Adherence to Budget (managing operational costs within the contract's financial framework). These KPIs help the Department of the Navy assess the contractor's performance and ensure the critical logistical needs are being met effectively and efficiently.

What is the track record of Erickson Helicopters, Inc. in fulfilling similar large-scale government contracts, particularly in the Indo-Pacific region?

Erickson Helicopters, Inc. has a notable track record with government contracts, including significant work for the U.S. military and other federal agencies. They are recognized for their specialized heavy-lift rotary-wing capabilities, often undertaking complex missions in challenging environments. Their experience includes providing aerial firefighting support (e.g., with their Sky Crane helicopters), heavy lift operations, and logistical support. While specific details on their performance in the Indo-Pacific for this exact type of contract require deeper research into past awards and performance reviews, the company's longevity and continued engagement in government contracting suggest a generally positive history. However, as with any large contractor, past performance reviews and any documented issues or disputes would be crucial for a comprehensive assessment.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Freight Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6238715R8008

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Erickson Incorporated (UEI: 076414135)

Address: 5550 SW MACADAM AVE STE 200, PORTLAND, OR, 97239

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

Financial Breakdown

Contract Ceiling: $49,416,466

Exercised Options: $36,607,670

Current Obligation: $36,607,670

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline