DoD's $2.45M contract for C-5 landing gear parts awarded to ES3 Prime Logistics Group Inc

Contract Overview

Contract Amount: $2,448,545 ($2.4M)

Contractor: ES3 Prime Logistics Group Inc

Awarding Agency: Department of Defense

Start Date: 2021-09-16

End Date: 2027-10-01

Contract Duration: 2,206 days

Daily Burn Rate: $1.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: DRAG LINK,LANDING G C-5 WEAPONS SYSTEM.

Plain-Language Summary

Department of Defense obligated $2.4 million to ES3 PRIME LOGISTICS GROUP INC for work described as: DRAG LINK,LANDING G C-5 WEAPONS SYSTEM. Key points: 1. The contract value represents a significant investment in maintaining the operational readiness of the C-5 Galaxy fleet. 2. Competition dynamics for specialized aerospace components can be limited, potentially impacting price. 3. The fixed-price with economic price adjustment structure introduces some cost fluctuation risk. 4. Performance context is critical, as timely delivery of these parts directly affects aircraft availability. 5. This contract falls within the broader Defense Logistics Agency's mission to support military aviation. 6. The duration of the contract suggests a long-term need for these critical components.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without detailed cost breakdowns or comparisons to similar sole-source or limited-competition awards for C-5 components. The fixed-price with economic price adjustment (FPEPA) contract type suggests that some cost elements are variable, which can lead to price increases over the contract's life. Without more granular data on the specific parts and their market prices, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded. This suggests a limited pool of qualified bidders, potentially due to specialized requirements or existing relationships. The limited competition may have influenced the final negotiated price, as fewer bidders generally lead to less aggressive pricing.

Taxpayer Impact: Taxpayers may face higher costs due to the restricted competition, as the government may not have secured the most competitive pricing available in a broader market.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the C-5 Galaxy aircraft, ensuring their continued operational capability. The services delivered include the provision of critical landing gear components for a major strategic airlift platform. The geographic impact is national, supporting the global reach and deployment capabilities of the U.S. military. Workforce implications include supporting jobs in aerospace manufacturing and logistics, particularly for the contractor and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation due to economic price adjustment clauses.
Limited competition could result in less favorable pricing for the government.
Dependence on a single contractor for critical components poses supply chain risk.

Positive Signals

Contract awarded to a prime logistics group, indicating established supply chain capabilities.
Long contract duration suggests a stable and predictable supply of essential parts.
Focus on a specific, critical aircraft system (C-5 landing gear) ensures specialized support.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, stringent quality control, and specialized technical expertise. This contract for C-5 landing gear components fits within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry code (NAICS 336413). The market for such specialized military aircraft parts is often dominated by a few key suppliers due to the unique specifications and certifications required. Comparable spending benchmarks would involve analyzing other contracts for similar high-value, mission-critical aircraft components across different military branches.

Small Business Impact

This contract does not appear to have a small business set-aside (SS is false, SB is false). There is no explicit indication of subcontracting plans for small businesses within the provided data. The focus on specialized aerospace components may limit opportunities for broad small business participation unless they are part of the prime contractor's established supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms and financial accountability. The Defense Logistics Agency (DLA) is responsible for the overall program management and execution. Transparency is facilitated through contract databases like FPDS, though detailed cost breakdowns are often proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

C-5 Galaxy Sustainment Program
Defense Logistics Agency Aviation Support
Military Aircraft Parts Procurement
Aerospace Component Manufacturing Contracts

Risk Flags

Limited competition may lead to higher prices.
Economic price adjustment clause introduces cost escalation risk.
Dependence on specific components for a legacy aircraft system.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.4 million to ES3 PRIME LOGISTICS GROUP INC. DRAG LINK,LANDING G C-5 WEAPONS SYSTEM.

Who is the contractor on this award?

The obligated recipient is ES3 PRIME LOGISTICS GROUP INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.4 million.

What is the period of performance?

Start: 2021-09-16. End: 2027-10-01.

What is the historical spending pattern for C-5 landing gear components by the Department of Defense?

Analyzing historical spending for C-5 landing gear components requires accessing detailed procurement data over several fiscal years. Typically, such spending would be characterized by a mix of contract types, including fixed-price and cost-plus, depending on market conditions and the nature of the components. The frequency and value of awards would fluctuate based on aircraft maintenance schedules, fleet readiness requirements, and the availability of competitive bids. A review of past contracts would likely reveal periods of higher spending during major maintenance overhauls or upgrades, and lower spending during routine sustainment. It's also common to see sole-source or limited-competition awards for highly specialized or legacy parts where the original manufacturer or a limited number of qualified suppliers hold the necessary technical data and certifications. Understanding these patterns helps contextualize the current $2.45M award and assess its alignment with historical investment levels.

How does the pricing of this contract compare to similar landing gear component contracts for other large military aircraft?

Directly comparing the pricing of this $2.45M contract for C-5 landing gear components to similar contracts for other large military aircraft is challenging without access to detailed pricing structures and specific component specifications. Factors such as the complexity of the part, the materials used, the required certifications, and the volume of the order significantly influence unit costs. For instance, landing gear for a B-52 bomber or a KC-135 Stratotanker would have different cost profiles due to variations in design, weight, and operational demands. Furthermore, the level of competition for each contract plays a crucial role; a sole-source award for one aircraft's parts might be significantly more expensive per unit than a competitively bid contract for another. A comprehensive benchmark would require analyzing contracts with similar 'Full and Open Competition After Exclusion of Sources' clauses and comparable contract values for other strategic airlift or heavy bomber aircraft.

What are the specific risks associated with the 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type for this procurement?

The FPEPA contract type introduces specific risks for both the government and the contractor. For the government, the primary risk is potential cost escalation. The 'economic price adjustment' clause allows the contractor to increase the price based on fluctuations in specified economic factors, such as labor costs, material prices, or inflation indices. While intended to protect the contractor from unforeseen cost increases and ensure a stable supply, it can lead to the government paying more than initially budgeted if these economic factors rise significantly. For the contractor, the risk is mitigated as they are protected against adverse economic changes. However, they still bear the risk of cost overruns due to poor performance, inefficient management, or unforeseen technical issues not covered by the economic adjustment clauses. Effective oversight is crucial to ensure that any price adjustments are justified and align with the contract's stipulated economic indicators.

What is the track record of ES3 Prime Logistics Group Inc. in fulfilling similar defense contracts, particularly for aircraft components?

ES3 Prime Logistics Group Inc. has a history of performing defense contracts, often related to logistics, supply chain management, and the provision of aircraft parts and services. To assess their track record specifically for C-5 landing gear components, a detailed review of their past performance on similar contracts would be necessary. This would involve examining contract award histories, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any instances of contract disputes or terminations. Their experience with managing complex supply chains and ensuring the timely delivery of critical aviation parts is a key indicator of their capability. A positive track record suggests a lower risk of performance issues, while a history of deficiencies might raise concerns about their ability to meet the demands of this specific contract, including quality, schedule, and cost objectives.

How does the exclusion of certain sources in the competition impact the potential for innovation and long-term cost savings?

The 'exclusion of sources' in a 'Full and Open Competition' scenario inherently limits the breadth of potential innovation. By precluding certain qualified bidders, the government may miss out on novel approaches, technologies, or efficiencies that excluded companies might offer. This can stifle competition not just on price but also on technical solutions. In the long term, this limitation can hinder cost savings if the selected contractor's approach is less efficient or if alternative, more cost-effective methods developed by excluded firms are not considered. While exclusions are typically based on specific technical requirements, security clearances, or past performance, a narrow exclusion can inadvertently create a less dynamic market, potentially leading to higher sustainment costs over the lifecycle of the C-5 weapon system.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 550 WEST C ST STE 1630, SAN DIEGO, CA, 92101

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

Financial Breakdown

Contract Ceiling: $2,448,545

Exercised Options: $2,448,545

Current Obligation: $2,448,545

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPRHA118D0002

IDV Type: IDC

Timeline