DoD awards $48.6M for Turbine Generator Set Units to AAR Supply Chain, Inc

Contract Overview

Contract Amount: $48,613,215 ($48.6M)

Contractor: AAR Supply Chain, Inc

Awarding Agency: Department of Defense

Start Date: 2022-09-29

End Date: 2026-08-01

Contract Duration: 1,402 days

Daily Burn Rate: $34.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DO

Place of Performance

Location: WOOD DALE, DUPAGE County, ILLINOIS, 60191

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $48.6 million to AAR SUPPLY CHAIN, INC for work described as: DO Key points: 1. Significant award value of $48.6 million. 2. Sole-source award indicates limited competition. 3. Long contract duration of 1402 days. 4. Focus on turbine generator set units manufacturing.

Value Assessment

Rating: questionable

The contract is a sole-source award, making a direct pricing comparison difficult. Without competitive bids, it's hard to ascertain if the $48.6 million price represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition may result in higher costs for the Department of Defense, impacting taxpayer funds.

Public Impact

Ensures critical turbine generator set units are available for defense operations. Supports a specific manufacturer, potentially impacting market dynamics. Long-term commitment may affect future procurement strategies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing

Positive Signals

Ensures supply of critical equipment

Sector Analysis

The award falls under the Turbine and Turbine Generator Set Units Manufacturing sector. Spending in this sector is crucial for maintaining operational readiness of military equipment, but competitive sourcing is key to cost efficiency.

Small Business Impact

The data indicates that small businesses were not directly involved in this specific contract award. Further analysis would be needed to determine if AAR Supply Chain, Inc. utilizes small business subcontractors.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the pricing is justified and that the government is receiving fair value for taxpayer dollars.

Related Government Programs

Turbine and Turbine Generator Set Units Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award limits competition and price discovery.
Long contract duration may not reflect current market conditions.
Lack of transparency on pricing justification.
Potential for cost overruns due to lack of competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.6 million to AAR SUPPLY CHAIN, INC. DO

Who is the contractor on this award?

The obligated recipient is AAR SUPPLY CHAIN, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $48.6 million.

What is the period of performance?

Start: 2022-09-29. End: 2026-08-01.

What justification was provided for the sole-source award, and how was the price determined to be fair and reasonable?

The justification for a sole-source award typically involves demonstrating that only one responsible source can provide the required supplies or services. The price is usually determined fair and reasonable through methods like historical pricing, comparison to commercial items, or cost analysis. Without the specific justification document, it's impossible to confirm the details.

What is the potential risk of relying on a single supplier for such critical components over a four-year period?

Relying on a single supplier for critical components over an extended period carries risks such as potential supply chain disruptions, lack of innovation, and reduced leverage in price negotiations. If the sole source faces production issues or goes out of business, it could severely impact the DoD's operational capabilities.

How does this contract contribute to the overall readiness and effectiveness of the Department of Defense's turbine-powered assets?

This contract directly contributes to readiness by ensuring the availability of essential turbine generator set units. These units are likely critical for powering various defense platforms, from aircraft to ground support equipment. Consistent supply maintains operational capability and reduces downtime.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Turbine and Turbine Generator Set Units Manufacturing

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AAR Government Services Inc.

Address: 1100 N WOOD DALE RD, WOOD DALE, IL, 60191

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

Financial Breakdown

Contract Ceiling: $48,613,215

Exercised Options: $48,613,215

Current Obligation: $48,613,215

Actual Outlays: $1,944,529

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPRRA122D0036

IDV Type: IDC

Timeline