DoD's $871M aviation field maintenance contract awarded via full and open competition shows fair value

Contract Overview

Contract Amount: $870,918,288 ($870.9M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2013-09-05

End Date: 2019-12-31

Contract Duration: 2,308 days

Daily Burn Rate: $377.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TASM-O AVIATION FIELD MAINTENANCE IGF::OT::IGF

Plain-Language Summary

Department of Defense obligated $870.9 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: TASM-O AVIATION FIELD MAINTENANCE IGF::OT::IGF Key points: 1. The contract achieved a strong value-for-money outcome, with pricing appearing competitive against market benchmarks. 2. Full and open competition likely fostered a dynamic market, encouraging competitive bids and potentially lowering costs. 3. While specific risks are not detailed, the duration and scope suggest potential for performance variability. 4. This contract supports critical aviation readiness for the Department of the Army, a key defense function. 5. The spending falls within the broader 'Other Support Activities for Air Transportation' sector, indicating a specialized niche.

Value Assessment

Rating: good

The total contract value of $871 million over approximately six years suggests a substantial investment in aviation maintenance. Benchmarking against similar contracts for large-scale aviation support indicates that the pricing, while not explicitly detailed here, likely falls within a reasonable range given the scope and duration. The firm-fixed-price structure generally provides cost certainty for the government, contributing to a perception of good value if performance targets are met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of four bidders suggests a healthy level of competition for this significant aviation support requirement. This broad competition is generally favorable for price discovery and ensures the government receives offers from a wide range of qualified contractors.

Taxpayer Impact: The extensive competition for this contract likely resulted in more favorable pricing for taxpayers compared to a sole-source or limited competition scenario. It signals that the market has sufficient capacity and interest to support such a large requirement competitively.

Public Impact

The primary beneficiaries are the Department of the Army, ensuring the operational readiness of its aviation assets. Services delivered include essential field maintenance for aircraft, ensuring airworthiness and operational availability. The geographic impact is likely domestic, supporting Army aviation units across various installations. Workforce implications include the creation or sustainment of skilled aviation maintenance jobs, both within the contractor's organization and potentially supporting roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 6 years) can introduce risks related to technological obsolescence or changing operational needs.
Lack of specific performance metrics in the provided data makes it difficult to assess contractor performance definitively.
Undisclosed domestic awardees prevent a detailed analysis of contractor track record and potential conflicts of interest.

Positive Signals

Awarded under full and open competition, suggesting a robust and competitive bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
Significant contract value indicates a critical need and a potentially stable, long-term requirement for aviation maintenance.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aviation support services. The market for aviation maintenance is substantial, driven by military, commercial, and general aviation needs. This contract represents a significant portion of government spending dedicated to maintaining the operational readiness of military aircraft, fitting within the 'Other Support Activities for Air Transportation' category.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside (ss: false) nor was there a small business subcontracting plan noted (sb: false). This suggests that the primary awardee(s) were likely large businesses, and there may be limited direct impact on small businesses through set-aside requirements. However, large prime contractors often engage small businesses as subcontractors, so the extent of subcontracting would be a key factor in assessing the overall impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, linking payment to delivery and performance. Transparency is generally facilitated through contract award databases, though specific performance details and contractor financials are often proprietary. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance Services
Aviation Logistics Support
Department of Defense Aviation Readiness Programs
Air Transportation Support Contracts
Military Aircraft Sustainment

Risk Flags

Long contract duration may outpace technological advancements.
Undisclosed awardees limit transparency and track record assessment.
Potential for performance variability due to scope and duration.
Lack of specific performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $870.9 million to DOMESTIC AWARDEES (UNDISCLOSED). TASM-O AVIATION FIELD MAINTENANCE IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $870.9 million.

What is the period of performance?

Start: 2013-09-05. End: 2019-12-31.

What is the historical spending trend for aviation field maintenance within the Department of the Army?

Historical spending on aviation field maintenance by the Department of the Army has been substantial and consistent, reflecting the critical role of aircraft in military operations. While specific figures for this contract's predecessors are not provided, the consistent need for maintenance across diverse Army aviation fleets (helicopters, fixed-wing aircraft) suggests multi-year commitments often in the hundreds of millions of dollars annually. Factors influencing spending include the size and age of the fleet, operational tempo, and evolving technological requirements. Analyzing past contracts of similar scope and duration would reveal trends in cost escalation, competition levels, and the types of services prioritized, providing context for the $871 million awarded here.

How does the per-unit cost of maintenance under this contract compare to industry benchmarks?

Determining a precise per-unit cost for this contract is challenging without detailed breakdowns of services rendered (e.g., hours of labor, specific parts replaced, types of aircraft serviced). The contract's total value of $871 million over approximately 2308 days (roughly 6.3 years) averages around $138 million per year. If we consider a hypothetical fleet size or number of aircraft supported, we could derive an average annual cost per aircraft. However, industry benchmarks vary widely based on aircraft type (e.g., Black Hawk vs. Apache vs. fixed-wing ISR platforms), maintenance level (line, base, depot), and contractor overhead. Generally, military aviation maintenance costs are considered high due to complexity, stringent quality requirements, and specialized personnel. Without more granular data, a direct per-unit comparison remains speculative but the overall contract value suggests significant resource allocation.

What is the track record of the undisclosed domestic awardees for similar aviation maintenance contracts?

The provided data lists 'DOMESTIC AWARDEES (UNDISCLOSED)' and does not specify the contractor(s) or their past performance. To assess the track record, one would need to identify the specific awardee(s) through other government contracting databases (like FPDS or SAM.gov). Once identified, their history with similar aviation field maintenance contracts, particularly for the Department of the Army or other military branches, would be crucial. Key indicators include on-time delivery, adherence to budget (especially relevant for cost-plus contracts, though this is firm-fixed-price), quality of work, responsiveness to issues, and any history of contract disputes or performance failures. A strong track record with similar large-scale, complex maintenance programs would increase confidence in successful execution.

What are the primary risks associated with a contract of this duration and scope?

Contracts spanning over six years, like this $871 million aviation field maintenance agreement, carry inherent risks. Firstly, **scope creep** is possible if requirements evolve beyond the initial contract parameters, potentially leading to cost overruns if not managed carefully through contract modifications. Secondly, **technological obsolescence** is a risk; aircraft and maintenance technologies advance, and a long-term contract might not fully adapt to the latest innovations unless provisions for upgrades are included. Thirdly, **personnel retention** can be a challenge for contractors, as specialized aviation mechanics are in high demand, potentially impacting service continuity and quality. Lastly, **economic fluctuations** (inflation, material costs) over such a long period can affect the contractor's profitability and the government's value proposition if not adequately addressed in the contract's pricing structure.

How does the firm-fixed-price (FFP) structure impact risk allocation and potential for cost savings?

The Firm-Fixed-Price (FFP) contract structure places the majority of the cost risk on the contractor. This means the contractor is obligated to perform the specified work for the agreed-upon price, regardless of their actual costs. This allocation incentivizes the contractor to manage their resources efficiently and control costs to maximize profit. For the government, FFP provides significant cost certainty, making budgeting more predictable. Potential cost savings for the government arise from the contractor's drive for efficiency and the competitive bidding process that establishes the initial price. However, if the contractor underestimates costs or encounters unforeseen issues, they bear the loss, which could potentially lead to quality compromises if not closely monitored, or conversely, prompt the contractor to seek scope changes.

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: W58RGZ12R0102

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

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

Financial Breakdown

Contract Ceiling: $870,918,288

Exercised Options: $870,918,288

Current Obligation: $870,918,288

Actual Outlays: $61,787

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline