Army awards $2.26B for aircraft maintenance at Fort Rucker, with 5 bids received

Contract Overview

Contract Amount: $2,257,290,759 ($2.3B)

Contractor: Army Sustainment LLC

Awarding Agency: Department of Defense

Start Date: 2012-07-24

End Date: 2021-09-30

Contract Duration: 3,355 days

Daily Burn Rate: $672.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: AIRCRAFT MAINTENANCE SERVICES FOR FT RUCKER, AL IGF::OT::IGF

Place of Performance

Location: FORT RUCKER, DALE County, ALABAMA, 36362

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $2.26 billion to ARMY SUSTAINMENT LLC for work described as: AIRCRAFT MAINTENANCE SERVICES FOR FT RUCKER, AL IGF::OT::IGF Key points: 1. The contract's value represents a significant investment in aviation readiness and support. 2. Competition dynamics suggest a potentially robust market for these specialized services. 3. The duration of the contract indicates a long-term need for sustained aviation support. 4. Performance context is crucial given the critical nature of aircraft maintenance for military operations. 5. This contract falls within the broader defense sector's extensive spending on aviation logistics.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and detailed cost breakdowns. The total award amount of $2.26 billion over approximately nine years suggests a substantial, ongoing requirement. Comparing it to similar large-scale aviation maintenance contracts across the DoD would provide better context for value for money. The cost-plus incentive fee structure implies that cost savings and performance targets can influence the final price, but the baseline value needs further scrutiny against industry standards and historical data for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with five bids received. This level of competition is generally positive, indicating that multiple capable vendors were interested and able to bid. The presence of five bidders suggests a healthy market for aircraft maintenance services and likely contributed to price discovery. However, the specific details of the bidding process and the nature of the proposals would be needed to fully assess the effectiveness of the competition in driving down costs.

Taxpayer Impact: Full and open competition with multiple bidders typically benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better service quality.

Public Impact

The primary beneficiaries are the U.S. Army Aviation Center of Excellence at Fort Rucker, ensuring operational readiness of aircraft. Services delivered include comprehensive maintenance, repair, and overhaul for a variety of Army aircraft. The geographic impact is concentrated at Fort Rucker, Alabama, supporting a major training and operational hub. Workforce implications include direct and indirect employment opportunities for skilled aviation technicians and support staff in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of over nine years may present risks related to technological obsolescence or changing operational requirements.
Cost-plus incentive fee contracts can sometimes lead to cost overruns if not managed tightly, despite incentive structures.
Dependence on a single contractor for such critical services at a major installation warrants careful performance monitoring.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Multiple bidders (five) indicate a healthy market and potential for good value.
The contract's length suggests a stable, long-term requirement, allowing for specialized workforce development.

Sector Analysis

This contract operates within the Defense Logistics and Support Services sector, a critical component of the broader aerospace and defense industry. The market for military aircraft maintenance is substantial, driven by the extensive global operations and training requirements of armed forces. Spending benchmarks for similar large-scale aviation maintenance contracts often run into billions of dollars over multi-year periods, reflecting the complexity and cost of maintaining advanced aircraft fleets. This contract fits within the DoD's strategic focus on ensuring aviation readiness and operational capability.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the awardee is a large entity and the contract was not specifically set aside for small businesses. There is no explicit mention of subcontracting plans for small businesses. This suggests that the primary competition was likely among larger defense contractors capable of handling the scale and complexity of the requirement. The impact on the small business ecosystem would depend on whether the prime contractor engages small businesses for specialized support services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. Accountability measures are embedded within the Cost Plus Incentive Fee (CPIF) structure, which incentivizes the contractor to meet cost and performance targets. Transparency is generally maintained through contract award databases and reporting requirements, though detailed operational performance data may be restricted. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance Services
Aviation Support Contracts
Department of Defense Logistics
Army Aviation Readiness Programs
Base Operations Support Contracts

Risk Flags

Long contract duration may lead to risks associated with technological changes or evolving military needs.
Cost-plus contracts require diligent oversight to manage potential cost escalations.
Dependence on a single provider for critical maintenance at a major installation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.26 billion to ARMY SUSTAINMENT LLC. AIRCRAFT MAINTENANCE SERVICES FOR FT RUCKER, AL IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is ARMY SUSTAINMENT LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.26 billion.

What is the period of performance?

Start: 2012-07-24. End: 2021-09-30.

What is the historical spending trend for aircraft maintenance services at Fort Rucker?

Analyzing historical spending requires accessing prior contract awards for similar services at Fort Rucker. Without specific prior contract data, it's difficult to establish a precise trend. However, the significant value of this current $2.26 billion contract, awarded in 2012 and ending in 2021, suggests a consistent and substantial requirement for aircraft maintenance at the installation over an extended period. The duration and value indicate that this has been a critical and ongoing expenditure for the Army, likely reflecting sustained training tempo and operational needs. Future analysis could involve comparing this contract's value to previous maintenance contracts to identify any escalation or changes in scope.

How does the per-unit cost of maintenance compare to industry benchmarks for similar aircraft types?

Determining the per-unit cost of maintenance requires detailed breakdowns of the services provided and the specific aircraft types covered under the contract, which are not fully detailed in the provided data. The contract type, Cost Plus Incentive Fee (CPIF), means the final cost is influenced by performance and cost targets, making direct per-unit comparisons complex without access to the contractor's cost accounting and the government's evaluation metrics. To benchmark effectively, one would need to identify the specific fleet composition at Fort Rucker (e.g., UH-60 Black Hawks, CH-47 Chinooks, AH-64 Apaches) and compare the contract's implied hourly rates or maintenance task costs against publicly available data for civilian MRO (Maintenance, Repair, and Overhaul) providers or other military contracts for similar platforms. Such a comparison is often difficult due to proprietary data and differing service scopes.

What are the key performance indicators (KPIs) used to evaluate contractor performance under this contract?

Key Performance Indicators (KPIs) for aircraft maintenance contracts typically focus on mission capability rates, aircraft availability, turnaround times for repairs, quality of workmanship, and adherence to safety standards. For a Cost Plus Incentive Fee (CPIF) contract like this one, specific KPIs are contractually defined and linked to incentive fees, rewarding the contractor for exceeding targets and potentially penalizing for falling short. Examples could include maintaining a certain percentage of aircraft ready for training missions, completing scheduled maintenance within a specified timeframe, and achieving a low rate of repeat defects. The effectiveness of these KPIs in ensuring value for money depends on their clarity, measurability, and alignment with the Army's operational requirements at Fort Rucker.

What is the track record of Army Sustainment LLC in performing similar large-scale aviation maintenance contracts?

Assessing the track record of Army Sustainment LLC requires a review of their past performance on contracts of similar size, scope, and complexity, particularly within the Department of Defense. Information on their specific performance history, including any past issues with cost overruns, schedule delays, or quality deficiencies, would be crucial. Government contract databases and past performance reviews (often available through sources like the Federal Procurement Data System - Next Generation or agency-specific performance management systems) would provide insights. A positive track record would indicate reliability and capability, while a history of performance issues might raise concerns about future execution and value for money.

How does the competition level (5 bidders) impact the overall value and risk for taxpayers?

A competition level involving five bidders is generally considered healthy and suggests that the market has multiple capable providers for these specialized aircraft maintenance services. This level of competition typically enhances price discovery, potentially leading to more competitive bids and better value for taxpayers compared to sole-source or limited-competition scenarios. It also reduces the risk of vendor lock-in and increases the likelihood of receiving high-quality services. However, the ultimate value and risk mitigation depend on the specifics of the bids received, the evaluation criteria used, and the government's negotiation strategy. A robust competition provides a stronger foundation for achieving cost efficiencies and ensuring mission success.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W58RGZ11R0139

Offers Received: 5

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 1117 DILLY BRANCH RD, FORT RUCKER, AL, 36362

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

Financial Breakdown

Contract Ceiling: $2,257,290,759

Exercised Options: $2,257,290,759

Current Obligation: $2,257,290,759

Actual Outlays: $-312,498

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline