DoD's $28M rotary wing air support contract awarded to Erickson Helicopters, Inc. for nonscheduled chartered passenger transport

Contract Overview

Contract Amount: $28,090,709 ($28.1M)

Contractor: Erickson Helicopters, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-09-24

End Date: 2014-07-23

Contract Duration: 667 days

Daily Burn Rate: $42.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SOCAFRICA ROTARY WING AIR SUPPORT

Plain-Language Summary

Department of Defense obligated $28.1 million to ERICKSON HELICOPTERS, INC. for work described as: SOCAFRICA ROTARY WING AIR SUPPORT Key points: 1. Contract value of $28.1 million for approximately 22 months of service. 2. Awarded under full and open competition, indicating a competitive bidding process. 3. The contract type is a Firm Fixed Price (FFP), which shifts cost risk to the contractor. 4. The North American Industry Classification System (NAICS) code 481211 points to nonscheduled chartered passenger air transportation. 5. The contract duration of 667 days suggests a medium-term operational requirement. 6. The base award amount is $42.1 million, with potential for higher spending. 7. Erickson Helicopters, Inc. is the sole awardee for this specific contract. 8. The contract was awarded by the Department of the Army, a component of the Department of Defense.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. However, the base award of $42.1 million for approximately two years of rotary wing air support for the Department of Defense suggests a significant investment. Comparing this to similar contracts for aerial support in similar operational environments would be necessary for a more precise value assessment. The firm fixed-price nature of the contract provides cost certainty for the government, but the ultimate value depends on the contractor's efficiency and the actual services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 5 bids indicates a moderate level of competition for this requirement. While not an exceptionally high number of bidders, it suggests that the market for specialized rotary wing air support is not entirely concentrated, and multiple companies were willing and able to compete for the contract.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better service offerings. The existence of multiple bids suggests that the government likely received a range of proposals, allowing for selection of the best value.

Public Impact

Provides essential rotary wing air support for Department of Defense operations, likely in Africa given the 'SOCAFRICA' designation. Facilitates nonscheduled chartered passenger transportation, crucial for troop movement, logistics, and personnel support in potentially remote or austere environments. Supports military readiness and operational effectiveness by ensuring reliable air mobility. The geographic impact is likely concentrated in the Southern Command Africa (SOCAFRICA) area of responsibility. Indirectly supports the aviation industry and skilled personnel employed by Erickson Helicopters, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm fixed-price contract does not adequately account for unforeseen operational challenges in the specified region.
Dependence on a single contractor, Erickson Helicopters, Inc., could pose risks if performance issues arise or if the contractor faces financial instability.
The 'nonscheduled' nature of the transport might imply less predictable demand, potentially leading to underutilization or urgent, higher-cost flights.
Limited transparency into the specific operational requirements and performance metrics makes it difficult to fully assess value for money.
The designation 'SOCAFRICA' suggests operations in a potentially high-risk environment, which could impact operational costs and safety.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
Firm Fixed Price contract structure shifts cost risk to the contractor, providing budget certainty for the government.
The contract specifies nonscheduled chartered passenger air transportation, indicating a focus on flexible and responsive logistical support.
The duration of the contract (667 days) allows for sustained operational support and potential for economies of scale.
Erickson Helicopters, Inc. is a known entity in the helicopter services market, implying a level of established capability.

Sector Analysis

The aviation services sector, particularly charter and nonscheduled air transport, is a critical component of logistics and support for various industries, including defense. The market for specialized rotary wing support in challenging operational environments is often characterized by a limited number of highly capable providers. This contract fits within the broader defense logistics and transportation services market, which sees significant government spending. Comparable spending benchmarks would typically involve analyzing other contracts for similar air support services, factoring in aircraft type, duration, and operational theater.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses within the provided data. The award to Erickson Helicopters, Inc., a company likely of substantial size given the contract value, suggests that the primary focus was on securing specialized capabilities rather than promoting small business participation. Further investigation into subcontracting plans would be needed to determine any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army contracting and program management offices. Accountability measures would be defined by the contract's terms and conditions, including performance standards and reporting requirements. Transparency is often limited for defense contracts involving operational support in sensitive regions, but contract award data is generally publicly available through systems like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Aviation Support Contracts
Nonscheduled Chartered Air Transportation Services
Rotary Wing Aircraft Operations
Logistics and Transportation Services
Africa Command (AFRICOM) Support Contracts

Risk Flags

Potential operational risks in the SOCAFRICA region.
Dependence on a single contractor for critical support.
Limited transparency into specific performance metrics.
Firm Fixed Price contract may not cover all unforeseen operational costs.
Contract duration and scope require careful management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.1 million to ERICKSON HELICOPTERS, INC.. SOCAFRICA ROTARY WING AIR SUPPORT

Who is the contractor on this award?

The obligated recipient is ERICKSON HELICOPTERS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $28.1 million.

What is the period of performance?

Start: 2012-09-24. End: 2014-07-23.

What is the track record of Erickson Helicopters, Inc. in fulfilling similar government contracts, particularly in the SOCAFRICA region?

Erickson Helicopters, Inc. has a history of providing aviation services, including heavy-lift helicopter operations. Their experience often involves supporting government and commercial clients in challenging environments. Specific details regarding their performance on past SOCAFRICA contracts, including on-time delivery, safety records, and adherence to budget, would require a deeper dive into contract performance databases and agency reports. A review of past performance evaluations and any contract disputes or awards would provide a clearer picture of their reliability and capability in fulfilling requirements similar to this one. Their specialization in heavy-lift and specialized aerial services suggests a capacity for complex missions, but past performance is the best indicator of future success.

How does the pricing structure of this contract compare to industry benchmarks for similar rotary wing air support services?

The provided data indicates a Firm Fixed Price (FFP) contract, which aims to establish a set price for the services. To benchmark the pricing, one would need to compare the per-hour or per-flight costs against market rates for comparable helicopter types (e.g., heavy-lift, medium-lift) operating in similar geographic regions and under similar operational constraints (e.g., nonscheduled, passenger transport). Factors such as crew costs, maintenance, fuel, insurance, and profit margins all contribute to the overall price. Without access to the specific rates negotiated within this FFP contract and detailed market data, a precise comparison is difficult. However, the base award of $42.1 million over approximately two years suggests a substantial operational cost, which would need to be evaluated against the capabilities and availability of alternative providers.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Key risks include operational challenges in the SOCAFRICA region (e.g., security, weather, infrastructure), potential for cost escalation if the FFP contract did not fully anticipate all contingencies, and contractor performance issues. Mitigation strategies likely involve robust contract oversight by the Department of the Army, clear performance metrics and reporting requirements, and contingency planning for operational disruptions. The FFP structure itself mitigates cost overrun risk for the government, placing that burden on the contractor. Additionally, the government may have options for contract termination for default if performance is unsatisfactory. Pre-qualification of the contractor and thorough risk assessments during the bidding process are also crucial mitigation steps.

What is the expected effectiveness of this contract in supporting DoD's mission in Africa?

The effectiveness hinges on the reliability and capability of Erickson Helicopters, Inc. to provide the specified nonscheduled chartered passenger air transportation. If the contractor consistently meets performance requirements, this contract will be highly effective in enabling troop movement, logistical support, and personnel transport, which are critical for DoD operations in Africa. The ability to provide flexible, on-demand air support is vital in dynamic operational environments where fixed-wing infrastructure may be limited. Success will be measured by the contractor's ability to maintain aircraft serviceability, adhere to flight schedules, ensure safety, and operate within the designated area of responsibility, thereby contributing directly to mission accomplishment.

How does historical spending on similar rotary wing air support contracts by the DoD compare to this award?

Historical spending on similar contracts can vary significantly based on the specific mission, duration, aircraft type, and geographic location. The Department of Defense frequently procures aviation support services, including rotary wing transport, for various operational theaters. To assess this contract's spending in context, one would need to analyze trends in spending for nonscheduled chartered passenger air transportation and rotary wing support contracts awarded over the past several years, particularly those related to operations in Africa or similar complex environments. Factors such as inflation, changes in operational tempo, and technological advancements also influence spending patterns. A comparative analysis would reveal if this $28.1 million award falls within the typical range or represents a significant deviation.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Passenger Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Erickson Incorporated (UEI: 076414135)

Address: 3800 SE THREE MILE LN, MCMINNVILLE, OR, 97128

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

Financial Breakdown

Contract Ceiling: $28,090,709

Exercised Options: $28,090,709

Current Obligation: $28,090,709

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline