DoD's $250M contract for aircraft equipment maintenance and repair awarded to CAE USA INC

Contract Overview

Contract Amount: $250,264,666 ($250.3M)

Contractor: CAE USA Inc.

Awarding Agency: Department of Defense

Start Date: 2011-10-01

End Date: 2014-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $228.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200507!000074!5700!FA8223!OO-ALC/PKT/YWK !F3365701D2077 !A!N! !Y!QP01 !B2 !20050405!20110930!130788826!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!2200 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!04000!439!48!ARLINGTON !TARRANT !TEXAS !+000000011739!N!N!000000000000!J069!MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !611519!E! !5!B!S!B! ! !20200930!B! ! !A! !A!U!J!2!005!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y! ! !0001! !

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $250.3 million to CAE USA INC. for work described as: 200507!000074!5700!FA8223!OO-ALC/PKT/YWK !F3365701D2077 !A!N! !Y!QP01 !B2 !20050405!20110930!130788826!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!2200 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!04000!439!48!ARLINGTON !TARR… Key points: 1. Contract value of $250M over 3 years suggests significant investment in aircraft readiness. 2. Awarded under full and open competition, indicating a robust bidding process. 3. The contract's duration of 3 years allows for sustained support and potential for performance optimization. 4. Focus on maintenance and repair of training aids and devices highlights critical support functions for military operations. 5. The North American Industry Classification System (NAICS) code 336413 points to a specialized segment of the aerospace manufacturing industry. 6. The contract's fixed-price nature shifts performance risk to the contractor, potentially stabilizing costs for the government.

Value Assessment

Rating: good

The contract value of $250M over three years averages approximately $83.3M annually. Benchmarking this against similar contracts for aircraft equipment maintenance and repair is challenging without more specific data on the exact nature of the training aids and devices. However, the award to a single entity suggests a potentially competitive bidding process that resulted in a price deemed acceptable by the Department of Defense. The firm fixed-price structure implies that the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders were likely invited to submit proposals. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and allows the government to select the best value offer. The open competition is a positive indicator for achieving a fair market price.

Taxpayer Impact: Taxpayers benefit from the competitive process, which is designed to drive down costs and ensure the government receives optimal value for its investment in critical aircraft support services.

Public Impact

The primary beneficiaries are the U.S. Air Force units relying on the specified aircraft training aids and devices for operational readiness. Services delivered include the maintenance and repair of complex training equipment, ensuring its functionality and reliability. The geographic impact is likely concentrated around Air Force bases where these training aids are utilized, with potential for broader national security implications. Workforce implications include employment opportunities for skilled technicians and engineers at CAE USA INC. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of maintenance is underestimated by the contractor.
Risk of performance degradation if the contractor's technical expertise wanes over the contract period.
Dependence on a single contractor for critical training aid maintenance could create vulnerabilities.
Ensuring consistent quality across all maintenance and repair activities will be crucial.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract structure shifts cost risk to the contractor.
Long-term contract duration allows for specialized knowledge development and sustained support.
Contractor's focus on maintenance and repair indicates a commitment to operational readiness.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the maintenance and repair of specialized equipment. The market for aircraft maintenance, repair, and overhaul (MRO) is substantial, driven by the continuous need to keep complex military and civilian aircraft operational. This contract represents a significant portion of spending within the niche of training aids and devices, highlighting the importance of specialized support services in maintaining military readiness.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. Given the large contract value and specialized nature of aircraft equipment maintenance, it is likely that CAE USA INC. may engage small businesses as subcontractors for specific components or services. However, without explicit subcontracting plans, the direct impact on the small business ecosystem remains uncertain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and performance standards. Accountability measures are embedded within the firm fixed-price structure, incentivizing the contractor to meet performance requirements efficiently. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly available.

Related Government Programs

Aircraft Maintenance and Repair Services
Defense Training and Simulation Equipment
Aerospace Manufacturing Support
Military Readiness Programs
Government Fixed-Price Contracts

Risk Flags

Contract Duration
Contract Value
Contract Type
Competition Level
Contractor Performance History (requires further investigation)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $250.3 million to CAE USA INC.. 200507!000074!5700!FA8223!OO-ALC/PKT/YWK !F3365701D2077 !A!N! !Y!QP01 !B2 !20050405!20110930!130788826!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!2200 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!04000!439!48!ARLINGTON !TARRANT !TEXAS !+000000011739!N!N!000000000000!J069!MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !611519!E! !5!B!S!B! ! !202

Who is the contractor on this award?

The obligated recipient is CAE USA INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $250.3 million.

What is the period of performance?

Start: 2011-10-01. End: 2014-09-30.

What is the historical spending pattern for similar aircraft training aid maintenance contracts by the Department of Defense?

Analyzing historical spending for similar contracts requires access to detailed procurement data beyond this single award. However, general trends in defense spending indicate a consistent allocation towards readiness and sustainment, which includes maintenance of training equipment. Fluctuations in spending can be influenced by geopolitical events, modernization programs, and budget appropriations. Without specific historical data points for this particular category of training aids, it's difficult to establish a precise pattern. However, the $250M award suggests a significant, multi-year commitment that aligns with the ongoing need for effective military training.

How does the awarded price compare to industry benchmarks for similar maintenance and repair services?

Directly comparing the awarded price of $250M to industry benchmarks for 'maintenance and repair of training aids and devices' is challenging due to the specificity of the equipment and the limited public data on comparable contracts. The firm fixed-price nature of the contract suggests that CAE USA INC. has assessed the risks and costs associated with the scope of work and submitted a bid accordingly. The fact that it was awarded under full and open competition implies that the government perceived the price as competitive and offering good value relative to other proposals received. Further analysis would require detailed cost breakdowns and comparisons with other government or commercial contracts for highly specialized training systems.

What are the key performance indicators (KPIs) used to evaluate CAE USA INC.'s performance under this contract?

While specific KPIs are not detailed in the provided data, typical performance indicators for maintenance and repair contracts in the defense sector often include metrics such as on-time delivery of services, equipment uptime/availability, defect rates, response times to service requests, and adherence to technical specifications. The firm fixed-price structure incentivizes the contractor to meet these KPIs efficiently to maximize profitability. The Defense Contract Management Agency (DCMA) would likely monitor these metrics to ensure the government receives the expected level of service and readiness for the training equipment.

What is CAE USA INC.'s track record with similar government contracts, particularly in aircraft equipment maintenance?

CAE USA INC. has a significant track record in providing simulation and training solutions for defense and civil aviation. Their expertise often extends to the maintenance and support of these complex systems. While this specific contract focuses on 'maintenance & repair of equipment/training aids & devices,' it aligns with CAE's broader capabilities in supporting sophisticated aerospace technology. A thorough assessment would involve reviewing their past performance ratings on similar contracts, any past performance issues or awards, and their overall experience in delivering sustainment services for military training platforms.

What is the potential impact of this contract on the overall readiness of the U.S. Air Force's training capabilities?

This $250M contract plays a crucial role in ensuring the operational readiness of the U.S. Air Force's training capabilities. By securing dedicated maintenance and repair services for training aids and devices, the Air Force can minimize downtime and ensure that its personnel have access to reliable and functional equipment. Effective training is paramount for maintaining a skilled and prepared military force. Therefore, the successful execution of this contract directly contributes to the Air Force's ability to conduct realistic training scenarios, ultimately enhancing combat readiness and mission effectiveness.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 2116 ARLINGTON DOWNS ROAD, ARLINGTON, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $250,429,310

Exercised Options: $250,429,310

Current Obligation: $250,264,666

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F3365701D2077

IDV Type: IDC

Timeline