DoD Awards $1.47B Aircraft Maintenance Contract to Vertex Aerospace, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $1,467,426,321 ($1.5B)
Contractor: Vertex Aerospace LLC
Awarding Agency: Department of Defense
Start Date: 2021-10-15
End Date: 2026-12-31
Contract Duration: 1,903 days
Daily Burn Rate: $771.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: LABOR HOURS
Sector: Defense
Official Description: T45 CLS CMMARS TASK ORDER, MATERIALS - AIRCRAFT MAINTENANCE
Place of Performance
Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $1.47 billion to VERTEX AEROSPACE LLC for work described as: T45 CLS CMMARS TASK ORDER, MATERIALS - AIRCRAFT MAINTENANCE Key points: 1. Significant contract value of $1.47 billion for aircraft maintenance services. 2. Vertex Aerospace LLC, a key player in aerospace support, is the sole awardee. 3. Potential for cost overruns exists given the contract's duration and labor hour pricing. 4. The contract falls under the Defense sector, specifically supporting air transportation.
Value Assessment
Rating: questionable
The contract's pricing is based on labor hours, which can lead to variability and potential overruns. The awarded amount of $1.47 billion over its period of performance requires careful monitoring to ensure it remains competitive with market rates for similar maintenance services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the use of labor hours as the pricing mechanism may limit price discovery and could lead to higher costs if not managed effectively.
Taxpayer Impact: Taxpayer funds are utilized for aircraft maintenance, with the potential for increased costs due to labor hour pricing and contract duration.
Public Impact
Ensures continued operational readiness for critical aircraft assets within the Department of Defense. Supports Vertex Aerospace's role in the defense industrial base, potentially impacting jobs and supply chains. The long duration of the contract (over 5 years) means sustained taxpayer investment in aircraft upkeep.
Waste & Efficiency Indicators
Waste Risk Score: 70 / 10
Warning Flags
- Labor hour pricing can lead to cost uncertainty.
- Long contract duration increases risk of cost escalation.
- Lack of specific performance metrics in provided data.
Positive Signals
- Awarded under full and open competition.
- Supports critical defense aviation infrastructure.
- Established contractor with relevant experience.
Sector Analysis
This contract falls within the aerospace and defense sector, which is characterized by long-term, high-value agreements. Spending benchmarks for aircraft maintenance can vary widely based on aircraft type, age, and required services, making direct comparisons challenging without more specific data.
Small Business Impact
The data indicates that this contract was not awarded to small businesses, as Vertex Aerospace LLC is a large corporation. There is no indication of subcontracting opportunities for small businesses within the provided details.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Robust oversight will be crucial to manage costs, ensure performance, and hold the contractor accountable for delivering required maintenance services.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to labor hour pricing.
- Long contract duration (over 5 years) increases risk.
- Lack of detailed performance metrics in the provided data.
- Sole awardee may limit future competitive pressure.
- Dependence on a single contractor for critical maintenance.
Tags
other-support-activities-for-air-transpo, department-of-defense, md, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.47 billion to VERTEX AEROSPACE LLC. T45 CLS CMMARS TASK ORDER, MATERIALS - 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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $1.47 billion.
What is the period of performance?
Start: 2021-10-15. End: 2026-12-31.
What specific aircraft platforms and maintenance tasks are covered under this contract, and how do these align with DoD's operational needs?
The contract, T45 CLS CMMARS TASK ORDER, focuses on aircraft maintenance materials and services. While specific platforms are not detailed, the 'CLS' likely refers to Contractor Logistics Support, implying comprehensive maintenance. This aligns with the DoD's need for sustained operational readiness of its aviation assets, ensuring aircraft are maintained to required standards for mission effectiveness.
What mechanisms are in place to control costs and ensure value for money, given the labor hour pricing and long duration?
Mechanisms to control costs likely include CLIN-level ceilings, negotiated labor rates, and performance metrics tied to delivery schedules. The agency's oversight team will monitor expenditures and contractor performance, potentially exercising options for contract modifications or re-competition if costs escalate beyond acceptable thresholds or performance falters.
How will the effectiveness of Vertex Aerospace's maintenance services be measured and ensured throughout the contract's lifecycle?
Effectiveness will be measured through key performance indicators (KPIs) such as on-time delivery of parts and services, aircraft availability rates, and quality of maintenance performed. The Defense Contract Management Agency will likely conduct regular performance reviews and audits to ensure Vertex Aerospace meets or exceeds contractual requirements and maintains the operational readiness of the supported aircraft.
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: 2
Pricing Type: LABOR HOURS (Z)
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: $3,407,589,207
Exercised Options: $2,618,934,161
Current Obligation: $1,467,426,321
Actual Outlays: $360,480,695
Subaward Activity
Number of Subawards: 1419
Total Subaward Amount: $298,159,307
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
Start Date: 2021-10-15
Current End Date: 2026-12-31
Potential End Date: 2028-12-31 00:00:00
Last Modified: 2026-01-08
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