DoD's $989K contract for aircraft parts awarded to Transaero, Inc. with questionable value and limited competition

Contract Overview

Contract Amount: $9,896,054 ($9.9M)

Contractor: Transaero, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-08-29

End Date: 2010-07-26

Contract Duration: 1,792 days

Daily Burn Rate: $5.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200511!005513!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0345 !A!N! !N! ! !20050829!20080831!012895066!012895066!012895066!N!TRANSAERO INC !80 CROSSWAYS PARK DR !WOODBURY !NY!11797!82744!059!36!WOODBURY !NASSAU !NEW YORK !+000003327318!N!N!000000000000!1650!ACFT HYDRAULIC, VACUUM & DE-ICING SYS COMP !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336413!E! !3! ! ! ! ! !20200930!B! ! !A! !D!U!J!2!001!N!1G!A!N!Z! ! !N!B!N!N! ! !A! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MELVILLE, SUFFOLK County, NEW YORK, 11747

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $9.9 million to TRANSAERO, INC. for work described as: 200511!005513!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0345 !A!N! !N! ! !20050829!20080831!012895066!012895066!012895066!N!TRANSAERO INC !80 CROSSWAYS PARK DR !WOODBURY !NY!11797!82744!059!36!WOODBURY !NASS… Key points: 1. The contract's value proposition is unclear due to a lack of competitive bidding and limited performance data. 2. Competition was significantly restricted, raising concerns about potential overpricing and suboptimal value for taxpayer funds. 3. The contractor, Transaero, Inc., has a track record that warrants further scrutiny in the context of this award. 4. Performance context is minimal, making it difficult to assess the effectiveness and efficiency of the delivered goods. 5. This contract falls within the broader Defense Logistics Agency's procurement activities for aircraft components. 6. The fixed-price contract type offers some cost certainty but does not mitigate risks associated with limited competition.

Value Assessment

Rating: questionable

The contract's value is difficult to assess due to its non-competitive nature and the absence of detailed performance metrics. Without comparable bids or market benchmarks, it's challenging to determine if the $989,605 awarded represents a fair price for the aircraft hydraulic, vacuum, and de-icing systems components. The fixed-price nature provides some cost control, but the lack of competition limits the government's ability to secure the best possible pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This significantly limits the opportunity for price discovery and potentially leads to higher costs for the government. The absence of a competitive process means that the government did not benefit from the innovation or cost efficiencies that multiple bidders might have offered.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium for goods and services, as the government lacks the leverage that competition provides to negotiate lower prices.

Public Impact

The primary beneficiaries are likely military aviation units requiring specific aircraft system components. The contract delivers essential parts for aircraft hydraulic, vacuum, and de-icing systems. Geographic impact is primarily within the operational reach of the Defense Logistics Agency and its supported military branches. Workforce implications are minimal, as this contract is for the supply of parts rather than services requiring significant labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about fair pricing and potential for inflated costs.
Limited performance data makes it difficult to assess the quality and timeliness of delivered components.
Sole-source award suggests potential reliance on a single supplier, which can create future supply chain risks.
The contract duration of nearly five years (from award to final delivery) could lead to obsolescence issues for components.

Positive Signals

The contract is for essential aircraft components, ensuring operational readiness.
A firm fixed-price contract provides cost certainty for the awarded amount.
The Defense Logistics Agency is responsible for procuring these parts, indicating a structured procurement process.

Sector Analysis

This contract falls under the broader aerospace and defense sector, specifically focusing on aircraft parts and components. The market for such specialized parts can be niche, with a limited number of manufacturers or distributors capable of meeting stringent military specifications. Comparable spending benchmarks are difficult to establish without more detailed information on the specific components and their market value, especially given the sole-source nature of this award.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award for specific aircraft components, it is likely that the contractor, Transaero, Inc., is a specialized entity, and the procurement process did not prioritize small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and financial accountability. Transparency is limited due to the sole-source nature and lack of publicly available performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency Contracts
Sole-Source Aviation Contracts
Military Aircraft Systems Maintenance

Risk Flags

Sole-source award
Lack of competition
Limited performance data
Potential for inflated pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.9 million to TRANSAERO, INC.. 200511!005513!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0345 !A!N! !N! ! !20050829!20080831!012895066!012895066!012895066!N!TRANSAERO INC !80 CROSSWAYS PARK DR !WOODBURY !NY!11797!82744!059!36!WOODBURY !NASSAU !NEW YORK !+000003327318!N!N!000000000000!1650!ACFT HYDRAULIC, VACUUM & DE-ICING SYS COMP !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336413!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is TRANSAERO, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $9.9 million.

What is the period of performance?

Start: 2005-08-29. End: 2010-07-26.

What is Transaero, Inc.'s track record with government contracts, particularly within the Department of Defense?

Transaero, Inc. has a history of receiving government contracts, primarily within the Department of Defense. While specific details on past performance quality and adherence to timelines are not readily available for this analysis, the award of this contract suggests they were deemed capable of supplying the required aircraft components. Further investigation into their contract history, including any past performance reviews, disputes, or awards, would be necessary for a comprehensive assessment of their reliability and value proposition to the government.

How does the awarded price of $989,605 compare to market rates for similar aircraft hydraulic, vacuum, and de-icing system components?

Directly comparing the awarded price to market rates is challenging due to the sole-source nature of this contract and the lack of specific component details. Typically, competitive bidding allows for price discovery and benchmarking against multiple offers. Without this competitive process, it is difficult to ascertain if $989,605 represents a fair market price or if it is inflated. Analysis would require identifying the exact part numbers and seeking quotes from other potential suppliers, which was not done in this instance.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risks associated with this sole-source award include potential overpayment due to lack of competition, limited incentive for the contractor to innovate or offer cost savings, and a potential lack of supply chain resilience if Transaero, Inc. faces operational issues. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, the government may be locked into a single supplier, limiting future flexibility and potentially hindering access to better technologies or pricing from alternative sources.

What was the justification for awarding this contract as sole-source instead of through full and open competition?

The provided data does not include the specific justification for awarding this contract as sole-source. Common reasons for sole-source awards include unique capabilities of a single contractor, urgent and compelling needs where competition is not feasible, or when only one source is capable of meeting the requirement. Without the official justification document, it is impossible to definitively state why full and open competition was bypassed for this procurement of aircraft components.

What is the expected performance period and delivery timeline for the components under this contract?

The contract was awarded on August 29, 2005, with an initial estimated delivery completion date of August 31, 2008, and a final delivery completion date of July 26, 2010. This indicates an initial performance and delivery period of approximately three years, with a potential extension or finalization up to nearly five years from the award date. The duration suggests a need for components that may have longer lead times or are part of a phased delivery schedule.

How does this contract fit into the broader spending patterns for aircraft parts within the Department of Defense?

This contract, valued at $989,605, represents a relatively small portion of the Department of Defense's overall annual spending on aircraft parts, which can amount to billions of dollars. However, its significance lies in its sole-source nature and the specific components procured. It highlights a specific instance where competitive processes may have been deemed unsuitable or impractical by the procuring agency, the Defense Logistics Agency, for fulfilling a particular requirement for aircraft system components.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 35 MELVILLE PARK ROAD, SUITE 100, MELVILLE, NY, 01

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline