Vertex Aerospace LLC awarded $500M+ contract for air transportation support, with 3 bidders

Contract Overview

Contract Amount: $500,218,119 ($500.2M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2021-03-03

End Date: 2026-05-31

Contract Duration: 1,915 days

Daily Burn Rate: $261.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PMT N61340-18-RFPREQ-PMA-273-0293

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $500.2 million to VERTEX AEROSPACE LLC for work described as: PMT N61340-18-RFPREQ-PMA-273-0293 Key points: 1. Contract value exceeds $500 million over its period of performance. 2. Competition was robust with three bidders vying for the award. 3. The contract type is Firm Fixed Price, indicating defined costs. 4. Performance is concentrated in Mississippi. 5. The contract duration spans over 1900 days. 6. This award falls under 'Other Support Activities for Air Transportation'.

Value Assessment

Rating: good

The contract's total value of over $500 million is substantial. Benchmarking against similar 'Other Support Activities for Air Transportation' contracts is challenging without more specific service details. However, the firm fixed-price structure suggests that the government has negotiated a defined cost for the services, which can be advantageous for budget predictability. The presence of multiple bidders also suggests a competitive pricing environment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Three bidders participated in this competition, suggesting a healthy level of interest and a reasonable degree of competition for this requirement. The competitive process likely contributed to price discovery and potentially secured a more favorable price for the government.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it fosters a competitive environment, driving down costs and ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiaries are likely military aviation units requiring support services. Services delivered include essential support activities for air transportation operations. The geographic impact is concentrated in Mississippi, where the contractor is located. Workforce implications may include job creation and sustainment within the aerospace sector in Mississippi.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs despite fixed-price contract.
Dependence on a single contractor for critical air transportation support.
Geographic concentration of services could pose logistical risks if disruptions occur in Mississippi.

Positive Signals

Firm Fixed Price contract structure provides cost certainty.
Awarded through full and open competition, indicating market validation.
Contractor has a significant presence and likely established infrastructure in Mississippi.

Sector Analysis

The aerospace and defense industry is a significant sector for federal spending. This contract for air transportation support activities fits within the broader defense logistics and maintenance sub-sector. Comparable spending benchmarks would depend on the specific nature of the support, but contracts in this range are common for major defense support services. The market for such services is often characterized by a mix of large prime contractors and specialized subcontractors.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting requirements. This suggests that the primary award went to a large business. The absence of set-aside provisions means that opportunities for small businesses would likely be through subcontracting, if mandated or pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures are inherent in the firm fixed-price contract type, which penalizes cost overruns for the contractor. Transparency is generally provided through contract award databases, though specific performance metrics and detailed oversight reports may not always be publicly accessible.

Related Government Programs

Aircraft Maintenance Services
Logistics Support Services
Defense Aviation Support
Air Mobility Command Contracts
Aerospace Support Contracts

Risk Flags

Potential for cost overruns if contractor underestimates long-term costs.
Risk of performance degradation if unforeseen operational challenges arise.
Geographic concentration of services may increase vulnerability to local disruptions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $500.2 million to VERTEX AEROSPACE LLC. PMT N61340-18-RFPREQ-PMA-273-0293

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $500.2 million.

What is the period of performance?

Start: 2021-03-03. End: 2026-05-31.

What is the historical spending pattern for 'Other Support Activities for Air Transportation' by the Department of Defense?

Analyzing historical spending for 'Other Support Activities for Air Transportation' by the Department of Defense requires access to comprehensive federal procurement data. Generally, this category encompasses a wide range of services essential for maintaining and operating air transport fleets, including maintenance, repair, overhaul, logistics, and ground support. Spending in this area can fluctuate based on operational tempo, fleet modernization programs, and geopolitical factors. Contracts can range from small, specialized service agreements to large, multi-year support programs similar to the one awarded to Vertex Aerospace. Trends often show increased spending during periods of heightened military activity or when new aircraft platforms are introduced, requiring extensive support infrastructure. Conversely, spending might decrease during periods of budget austerity or fleet consolidation. Benchmarking this specific $500M+ award against historical averages would require a detailed analysis of contract vehicles and service scopes within this NAICS code over several fiscal years.

How does the number of bidders (3) compare to typical competition levels for similar large defense contracts?

A competition level of three bidders for a contract valued at over $500 million is generally considered moderate to good for large defense contracts. While more bidders can sometimes indicate greater competition and potentially better pricing, three bidders suggest that the requirement was sufficiently defined and accessible to multiple capable firms. In highly specialized or technologically advanced sectors, fewer bidders might be expected. Conversely, in more commoditized areas, a higher number of bidders might be the norm. For a contract of this magnitude and type ('Other Support Activities for Air Transportation'), three bidders indicate that the market has viable players, and the government likely received competitive proposals. It's not an exceptionally high number, but it avoids the concerns associated with sole-source or very limited competition scenarios.

What are the potential risks associated with a Firm Fixed Price (FFP) contract of this size and duration?

While Firm Fixed Price (FFP) contracts are designed to provide cost certainty, large and long-duration FFP contracts carry specific risks. For the government, the primary risk is that the contractor may not be able to deliver the required services at the agreed-upon price due to unforeseen circumstances, leading to potential quality compromises or contractor default. Conversely, if the contractor significantly underestimates costs or risks, they might seek to recoup losses through change orders or by reducing service quality. For the contractor, the risk lies in accurately estimating all costs over the contract's extended period (1915 days). Inflation, material cost fluctuations, labor availability, and unforeseen technical challenges can erode profit margins. Effective contract management, clear performance standards, and robust communication channels are crucial to mitigate these risks and ensure successful performance.

What is Vertex Aerospace LLC's track record with similar government contracts?

Assessing Vertex Aerospace LLC's track record requires a deep dive into federal procurement databases like FPDS or SAM.gov. Based on the provided data, Vertex Aerospace LLC is the awardee of this significant contract. To evaluate their track record, one would look for past performance information on contracts of similar size, scope, and complexity, particularly within the defense and aviation support sectors. Key indicators include on-time delivery, adherence to budget (especially in FFP contracts), quality of services rendered, and any history of contract disputes, terminations, or performance issues. Positive indicators would include successful completion of multiple large-scale support contracts, positive past performance reviews, and a history of innovation or efficiency. Conversely, a history of performance problems or contract disputes would raise concerns.

How does the contract's performance location in Mississippi impact potential risks or benefits?

The concentration of this contract's performance in Mississippi has several implications. On the benefit side, it can foster local economic development, create jobs, and support the regional aerospace ecosystem. It also allows for potentially streamlined logistics and oversight if the contracting agency has a significant presence in the area. However, it also introduces risks. Geographic concentration means that disruptions such as natural disasters (hurricanes are common in Mississippi), labor strikes, or local economic downturns could significantly impact contract performance. Dependence on a single geographic location for critical support services can create vulnerabilities. The government may mitigate these risks through contingency planning, ensuring robust infrastructure at the performance site, and potentially requiring the contractor to have business continuity plans in place.

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

Solicitation ID: N6134018R1199

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

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: $852,972,373

Exercised Options: $649,431,955

Current Obligation: $500,218,119

Actual Outlays: $182,799,727

Subaward Activity

Number of Subawards: 404

Total Subaward Amount: $46,556,514

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