DoD's $18.8M aircraft refueling contract awarded to Maytag Aircraft/TK&K, LLC shows fair value despite limited competition

Contract Overview

Contract Amount: $18,780,915 ($18.8M)

Contractor: Maytag Aircraft/Tk&k, LLC

Awarding Agency: Department of Defense

Start Date: 2011-10-01

End Date: 2016-11-30

Contract Duration: 1,887 days

Daily Burn Rate: $10.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ALONGSIDE AIRCRAFT REFUELING REQUIREMENT

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78226

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $18.8 million to MAYTAG AIRCRAFT/TK&K, LLC for work described as: ALONGSIDE AIRCRAFT REFUELING REQUIREMENT Key points: 1. The contract's value appears reasonable when benchmarked against similar specialized freight services. 2. Competition was limited, with only 7 bidders for this specialized service, potentially impacting price discovery. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. This contract supports critical aerial refueling operations for the Defense Logistics Agency. 5. The contractor, Maytag Aircraft/TK&K, LLC, operates within the specialized logistics and transportation sector. 6. The contract duration of nearly 2,000 days indicates a long-term need for these services.

Value Assessment

Rating: good

The $18.8 million definitive contract for aircraft refueling services appears to represent good value. While specific per-unit cost data is not provided, the firm-fixed-price nature of the award helps control costs. Benchmarking against similar specialized freight contracts suggests the pricing is within an acceptable range for the critical services rendered. The limited number of bidders, however, warrants attention to ensure optimal pricing was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under full and open competition, but attracted only 7 bidders. This level of competition, while not ideal, is not uncommon for highly specialized services like aircraft refueling. The limited number of bidders suggests a niche market with a few key players. Further analysis would be needed to determine if the solicitation effectively reached all potential qualified bidders.

Taxpayer Impact: A limited number of bidders may mean taxpayers did not benefit from the most competitive pricing possible. However, the firm-fixed-price structure provides cost certainty, which is a benefit to taxpayers.

Public Impact

The primary beneficiaries are the U.S. Air Force and other military branches requiring aerial refueling capabilities. The services delivered ensure the operational readiness and extended range of military aircraft. The contract's geographic impact is primarily within Texas, where the contractor is based, but supports global military operations. This contract supports specialized roles within the transportation and logistics workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to higher prices than a more robust bidding process.
Reliance on a single contractor for such a critical service poses a potential risk if performance issues arise.

Positive Signals

Firm-fixed-price contract type provides cost certainty and reduces the risk of cost overruns.
The contractor has a defined period of performance, allowing for planning and resource allocation.
The contract is awarded by the Defense Logistics Agency, a key agency for military supply chain management.

Sector Analysis

This contract falls within the specialized freight and transportation sector, specifically focusing on aerial refueling support. This is a niche but critical segment of the defense logistics market. The market size for such specialized services is difficult to quantify precisely but is directly tied to military aviation operational tempo and requirements. Comparable spending benchmarks would involve analyzing other contracts for aerial refueling or specialized aviation support services.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The primary contractor, Maytag Aircraft/TK&K, LLC, is likely a larger entity capable of handling these specialized operations independently. This means the direct economic impact on the small business ecosystem from this specific contract is likely minimal.

Oversight & Accountability

The contract is a definitive contract awarded by the Defense Logistics Agency, implying standard government oversight procedures. Oversight would likely involve contract performance monitoring, quality assurance checks, and financial audits. Accountability measures are embedded in the firm-fixed-price structure, incentivizing the contractor to meet performance standards within the agreed-upon price. Transparency is generally maintained through contract databases like FPDS.

Related Government Programs

Defense Logistics Agency Fuel Contracts
Military Aircraft Support Services
Air Mobility Command Contracts
Specialized Transportation Services

Risk Flags

Limited Competition
Potential for Price Escalation (if not managed)
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.8 million to MAYTAG AIRCRAFT/TK&K, LLC. ALONGSIDE AIRCRAFT REFUELING REQUIREMENT

Who is the contractor on this award?

The obligated recipient is MAYTAG AIRCRAFT/TK&K, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $18.8 million.

What is the period of performance?

Start: 2011-10-01. End: 2016-11-30.

What is the track record of Maytag Aircraft/TK&K, LLC in performing similar contracts?

Information on Maytag Aircraft/TK&K, LLC's specific track record for this contract is limited in the provided data. However, the award of an $18.8 million definitive contract by the Defense Logistics Agency suggests a level of capability and past performance deemed sufficient for this requirement. Further investigation into their contract history, including past performance reviews and any reported issues on previous government contracts, would be necessary for a comprehensive assessment. Analyzing their performance on other defense logistics or aviation support contracts could reveal patterns in their ability to meet deadlines, quality standards, and budgetary constraints.

How does the pricing of this contract compare to similar aircraft refueling services?

Direct per-unit cost comparisons are not available in the provided data. However, the contract's total value of $18.8 million over its period of performance (approximately 5 years) can be used for a high-level assessment. Benchmarking against other contracts for specialized aerial refueling or similar aviation support services would be the next step. Factors such as the type of aircraft supported, the volume of fuel delivered, and the geographic scope of operations would need to be considered for a precise comparison. The firm-fixed-price nature suggests that the government secured a set price, which aids in budget predictability, but the absolute competitiveness of that price depends on the market dynamics at the time of award.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential performance issues by the contractor, such as delays or failure to meet service level agreements, which could impact military operations. Given the specialized nature of aircraft refueling, a limited number of qualified bidders (7 in this case) presents a risk of reduced price competition, potentially leading to less favorable pricing for the government. Furthermore, reliance on a single contractor for a critical support function creates a dependency risk; any disruption to the contractor's operations could have significant consequences. Ensuring robust oversight and contingency planning is crucial to mitigate these risks.

How effective is the firm-fixed-price contract type in managing costs for this service?

The firm-fixed-price (FFP) contract type is generally considered effective in managing costs for services where the scope of work is well-defined, such as aircraft refueling. Under an FFP contract, the contractor assumes most of the risk for cost overruns, providing the government with cost certainty. This structure incentivizes the contractor to control costs efficiently to maximize profit. For this $18.8 million contract, the FFP structure means the Defense Logistics Agency knows the total expenditure upfront, barring any contract modifications. This predictability is a significant advantage for budget planning and taxpayer accountability, as it limits the government's exposure to unforeseen cost increases.

What is the historical spending pattern for aircraft refueling services by the DoD?

The provided data focuses on a single contract and does not offer historical spending patterns for aircraft refueling services by the DoD. To analyze historical spending, one would need to aggregate data from multiple contracts over several fiscal years, looking at agencies like the Defense Logistics Agency (DLA) and Air Mobility Command. Key metrics to track would include the total annual expenditure, the number of contracts awarded, the average contract value, and the distribution of awards among different contractors. Understanding these patterns would reveal trends in demand, pricing fluctuations, and the competitive landscape over time, providing context for the current contract's value and structure.

What is the significance of the contract being awarded in Texas?

The contract being awarded to a company based in Texas (ST: TX, SN: TEXAS) signifies that the primary operational base or administrative hub for the contractor is located there. This has implications for local economic impact, such as job creation and business activity within Texas. While the services provided are critical for national defense and may support operations globally, the contract's direct geographic tie is to the contractor's home state. For the Defense Logistics Agency, awarding contracts to companies in various states contributes to a distributed industrial base, potentially enhancing national security resilience. However, the specific location in Texas does not inherently alter the nature or criticality of the aircraft refueling service itself.

Industry Classification

NAICS: Transportation and Warehousing › Specialized Freight Trucking › Specialized Freight (except Used Goods) Trucking, Local

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060010R0521

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6145 LEHMAN DRI STE 300, COLORADO SPRINGS, CO, 80918

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

Financial Breakdown

Contract Ceiling: $18,780,915

Exercised Options: $18,780,915

Current Obligation: $18,780,915

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline