Army Aviation Field Maintenance Contract Exceeds $269 Million, Awarded to Army Sustainment LLC

Contract Overview

Contract Amount: $269,698,131 ($269.7M)

Contractor: Army Sustainment LLC

Awarding Agency: Department of Defense

Start Date: 2013-05-28

End Date: 2020-11-28

Contract Duration: 2,741 days

Daily Burn Rate: $98.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: RASM EAST AVIATION FIELD MAINTENANCE

Place of Performance

Location: FORT HOOD, CORYELL County, TEXAS, 76544

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $269.7 million to ARMY SUSTAINMENT LLC for work described as: RASM EAST AVIATION FIELD MAINTENANCE Key points: 1. Contract value of over $269 million indicates significant investment in aviation field maintenance. 2. Award to Army Sustainment LLC suggests a focus on established providers for critical support services. 3. The contract duration of approximately 7.5 years points to long-term operational needs. 4. Cost Plus Incentive Fee pricing structure aims to balance contractor performance with cost control. 5. Full and open competition was utilized, potentially leading to competitive pricing. 6. The contract is categorized under 'Other Support Activities for Air Transportation', highlighting specialized services. 7. Geographic focus on Texas (TX) suggests a concentration of Army aviation assets in the region.

Value Assessment

Rating: good

The contract's total value of $269.7 million over its 7.5-year term represents a substantial investment. While specific performance metrics and cost breakdowns are not provided, the Cost Plus Incentive Fee (CPIF) structure suggests an attempt to incentivize efficiency. Benchmarking against similar long-term aviation maintenance contracts would be necessary for a definitive value assessment, but the scale implies a significant operational requirement. The absence of detailed cost data makes a precise value-for-money judgment challenging without further analysis.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. With 8 bids received, the competition level appears robust, which typically fosters better price discovery and potentially more favorable terms for the government. This approach suggests the Army sought the best value proposition from a range of qualified contractors.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it increases the likelihood of securing services at competitive prices and encourages a wider pool of contractors to participate, potentially driving down costs through market forces.

Public Impact

Provides essential field maintenance for Army aviation assets, ensuring operational readiness. Supports the U.S. Army's aviation fleet, critical for national defense operations. Primarily impacts operations and personnel within Texas, where the contract is managed. Likely sustains a workforce of skilled aviation mechanics and support staff. Contributes to the overall logistical and maintenance infrastructure of the Army.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess contractor efficiency and effectiveness.
CPIF contract type can lead to cost overruns if not carefully managed and monitored.
Long-term nature of the contract may reduce flexibility to adapt to changing technological needs or market conditions.
Concentration of services in Texas could limit broader geographic reach for maintenance support if not supplemented.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
The contract's significant value indicates a critical and sustained need for these services.
Cost Plus Incentive Fee structure provides a framework for rewarding contractor performance.
Long contract duration suggests a stable and reliable support system for Army aviation.

Sector Analysis

This contract falls within the broader aerospace and defense services sector, specifically focusing on aviation maintenance. The market for military aviation maintenance is substantial, driven by the extensive fleets operated by various branches of the U.S. military. Companies like Army Sustainment LLC operate in a niche that requires specialized technical expertise and adherence to stringent military standards. Comparable spending benchmarks would involve analyzing other large-scale, long-term maintenance contracts for military aircraft across different service branches.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While the prime contractor is Army Sustainment LLC, the extent of small business subcontracting is not detailed. This contract's size and nature may lend themselves to larger, specialized subcontractors. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The Cost Plus Incentive Fee structure necessitates close monitoring of costs and performance to ensure value for money. Transparency is generally maintained through contract reporting mechanisms, though specific details on oversight activities and Inspector General involvement would require deeper inquiry into Army procurement policies.

Related Government Programs

Army Aviation Maintenance Programs
Department of Defense Aviation Support Contracts
Airframe and Engine Maintenance Services
Logistics and Sustainment Services for Military Assets

Risk Flags

Potential for cost overruns due to CPIF structure
Need for robust oversight to ensure performance and cost control
Limited visibility into specific performance metrics and value-for-money assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $269.7 million to ARMY SUSTAINMENT LLC. RASM EAST AVIATION FIELD MAINTENANCE

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 $269.7 million.

What is the period of performance?

Start: 2013-05-28. End: 2020-11-28.

What is the historical spending pattern for Army aviation field maintenance in Texas?

Analyzing historical spending patterns for Army aviation field maintenance in Texas requires access to detailed procurement data beyond this single contract. This contract, spanning from May 2013 to November 2020 with a value of $269.7 million, represents a significant portion of spending within that period. However, to understand the broader trend, one would need to examine previous contracts for similar services in the region, identify any recurring contractors, and assess fluctuations in contract values over time. Factors such as changes in Army aviation fleet size, operational tempo, and technological upgrades would influence these patterns. Without a comprehensive dataset of prior contracts, it's difficult to establish a definitive historical spending trajectory specifically for this service in Texas.

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

Determining a precise per-unit cost for maintenance under this contract is challenging without specific data on the types and quantities of maintenance performed (e.g., hours of labor, number of component repairs, types of aircraft serviced). The contract is a Cost Plus Incentive Fee (CPIF) type, which means costs are reimbursed, plus a fee that is adjusted based on performance against targets. To benchmark, one would need to identify specific maintenance tasks performed, their associated costs (labor, parts), and compare these to established industry rates for similar civilian or military aviation maintenance. Given the specialized nature of military aviation and the potential for unique requirements, direct comparisons can be complex. A thorough analysis would involve breaking down the total contract value by service type and comparing those sub-costs to market rates.

What is Army Sustainment LLC's track record with similar large-scale government contracts?

Army Sustainment LLC's track record with large-scale government contracts, particularly in aviation maintenance, is a key indicator of their capability and reliability. Information from contract databases and government performance reports (like Contractor Performance Assessment Reporting System - CPARS) would reveal their history. This includes examining past awards, contract values, performance ratings, and any instances of disputes or contract terminations. A positive history with similar contracts suggests a lower risk profile for the government. Conversely, a history of performance issues or cost overruns on comparable contracts would raise concerns about their ability to manage this $269.7 million agreement effectively.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this magnitude?

The primary risks associated with a CPIF contract of this magnitude include potential cost overruns if the incentive targets are not well-defined or achievable, leading to increased government expenditure. There's also a risk that the contractor might focus on maximizing the incentive fee rather than overall cost efficiency if the fee structure is not carefully balanced. Effective oversight is crucial to ensure the contractor is performing efficiently and that costs are reasonable. Another risk is the complexity of managing the incentive structure, requiring skilled government personnel to monitor performance metrics and calculate fee adjustments accurately. Without robust oversight, the government may not achieve the intended cost savings or performance improvements.

How does the competition level (8 bids) impact the government's ability to secure favorable pricing?

A competition level of 8 bids for this contract is generally considered robust and positively impacts the government's ability to secure favorable pricing. A larger number of bidders typically increases the likelihood that the government will receive competitive offers, driving down prices as contractors vie for the award. This level of competition suggests that the market has sufficient capacity and interest to meet the government's needs. It also provides the government with a broader range of options to evaluate based on technical merit, past performance, and price, allowing for a more informed selection process and potentially better overall value.

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: 8

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, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $269,698,131

Exercised Options: $269,698,131

Current Obligation: $269,698,131

Actual Outlays: $298,784

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $1,887,872

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline