DoD awards $24.7M aviation maintenance contract to Vertex Aerospace LLC, a sole-source definitive contract

Contract Overview

Contract Amount: $24,772,358 ($24.8M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2013-02-14

End Date: 2013-07-28

Contract Duration: 164 days

Daily Burn Rate: $151.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: AWARD OF AVIATION MAINTENANCE SERVICES TO INCLUDE RESET, MWOS, AND UNIT SUPPORT FOR THE RASM-EAST.

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to VERTEX AEROSPACE LLC for work described as: AWARD OF AVIATION MAINTENANCE SERVICES TO INCLUDE RESET, MWOS, AND UNIT SUPPORT FOR THE RASM-EAST. Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The contract's duration of 164 days suggests a short-term need, but the value indicates significant service requirements. 3. Vertex Aerospace LLC is the sole contractor, highlighting a lack of competition and potential for reduced innovation. 4. The 'Other Support Activities for Air Transportation' NAICS code suggests a broad scope of services, requiring careful performance monitoring. 5. Awarded by the Defense Contract Management Agency, indicating a focus on defense-related aviation support. 6. The contract type is Time and Materials, which can lead to cost uncertainty if not managed diligently.

Value Assessment

Rating: questionable

Benchmarking the value of this $24.7 million contract is challenging due to its sole-source nature and limited public data on comparable aviation maintenance services for RASM-EAST. The Time and Materials pricing structure introduces inherent risk for cost control, as the final price is not fixed upfront. Without competitive bids, it's difficult to ascertain if Vertex Aerospace LLC's pricing reflects fair market value or if taxpayers are potentially overpaying for the services rendered. Further analysis would require access to detailed cost breakdowns and historical pricing for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically justified when only one vendor can provide the required services, often due to proprietary technology, unique capabilities, or urgent needs. The absence of multiple bidders means that price discovery through competitive bidding was bypassed, potentially leading to higher costs for the government. The rationale for this sole-source award needs to be thoroughly documented and justified to ensure it was appropriate.

Taxpayer Impact: Taxpayers may face higher costs due to the lack of competitive pressure to drive down prices. The government's ability to negotiate favorable terms is also diminished in a sole-source scenario.

Public Impact

The primary beneficiaries are the U.S. Department of Defense, specifically units requiring aviation maintenance support for RASM-EAST. Services include reset, maintenance, and unit support for aviation assets, ensuring operational readiness. The geographic impact is likely concentrated around the RASM-EAST operational area, though specific locations are not detailed. Workforce implications may include direct employment by Vertex Aerospace LLC for skilled aviation technicians and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Time and Materials contract type carries inherent cost escalation risks.
Lack of detailed performance metrics in the provided data makes assessing efficiency difficult.
The short duration (164 days) might indicate a stop-gap measure, raising questions about long-term strategic planning.
Limited public information on Vertex Aerospace LLC's specific experience with RASM-EAST reset and MWOS.

Positive Signals

Award to a single, potentially specialized, provider can ensure focused expertise for critical aviation maintenance.
The contract addresses essential operational needs for aviation readiness.
The Defense Contract Management Agency's involvement suggests oversight of defense-specific requirements.
Vertex Aerospace LLC's status as a contractor indicates established capabilities in the aerospace sector.

Sector Analysis

The aviation maintenance sector is a critical component of the aerospace and defense industry, characterized by high technical expertise and stringent regulatory requirements. This contract falls under 'Other Support Activities for Air Transportation,' a broad category that encompasses specialized services essential for maintaining aircraft operational readiness. The market includes a mix of large aerospace corporations and specialized maintenance, repair, and overhaul (MRO) providers. Spending in this area is often driven by defense needs, fleet modernization programs, and operational tempo. Comparable spending benchmarks would typically involve analyzing other MRO contracts for similar aircraft types and service scopes within the Department of Defense.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Vertex Aerospace LLC is the prime contractor. There is no information available regarding subcontracting plans or the extent to which small businesses might be involved in the supply chain for this contract. Without specific set-aside goals or subcontracting requirements, the direct impact on the small business ecosystem for this particular award is unclear, though it represents a significant portion of the prime contract value potentially being captured by a larger entity.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet their contractual obligations. Accountability measures would be tied to the performance standards outlined in the definitive contract, including delivery schedules, quality of work, and adherence to technical specifications. Transparency is limited due to the sole-source nature and the proprietary aspects of defense contracting. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aviation Maintenance Services
Defense Logistics Agency Contracts
Aircraft Reset Programs
Military Aviation Support
Air Transportation Services Contracts

Risk Flags

Sole-source award
Time and Materials contract type
Lack of competition
Limited public performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to VERTEX AEROSPACE LLC. AWARD OF AVIATION MAINTENANCE SERVICES TO INCLUDE RESET, MWOS, AND UNIT SUPPORT FOR THE RASM-EAST.

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $24.8 million.

What is the period of performance?

Start: 2013-02-14. End: 2013-07-28.

What is the specific justification for awarding this aviation maintenance contract on a sole-source basis to Vertex Aerospace LLC?

The provided data indicates the contract was awarded as 'NOT COMPETED,' signifying a sole-source procurement. The specific justification for this sole-source award is not detailed in the summary data. Typically, sole-source contracts are justified under circumstances such as the availability of only one responsible source, urgent and compelling needs where delays associated with competitive bidding would be detrimental, or when the services require unique capabilities or proprietary technology possessed by a single contractor. For this specific contract, the Department of Defense would have had to document and approve the rationale for bypassing the standard competitive bidding process, likely citing reasons related to the specialized nature of RASM-EAST aviation maintenance, reset, and unit support, or potentially urgent operational requirements.

How does the Time and Materials (T&M) contract type impact cost control and potential value for money compared to fixed-price contracts?

The Time and Materials (T&M) contract type, used here, obligates the government to pay the contractor for direct labor hours at specified hourly rates, plus the actual cost of materials. This contrasts with fixed-price contracts, where the price is set upfront, regardless of the contractor's actual costs. T&M contracts offer flexibility and are often used when the scope of work is not clearly defined or is expected to change. However, they shift much of the cost risk to the government. Without robust oversight, detailed tracking of labor hours, and strict material cost controls, T&M contracts can lead to cost overruns and reduced value for money, as the contractor is incentivized to bill more hours or use more expensive materials. Effective management and negotiation of labor rates are crucial for ensuring fair pricing under T&M agreements.

What are the potential risks associated with a sole-source award for critical aviation maintenance services?

Sole-source awards for critical aviation maintenance services present several risks. Firstly, the absence of competition can lead to higher prices than might be achieved through a competitive bidding process, as the contractor faces less pressure to offer the most cost-effective solution. Secondly, it can limit innovation, as there is no incentive for the contractor to develop more efficient or advanced maintenance techniques if they are the only provider. Thirdly, it creates a dependency on a single supplier, which can be problematic if the contractor experiences performance issues, financial instability, or decides to exit the market. Finally, it raises concerns about the government's ability to negotiate favorable terms and conditions, as the contractor holds a stronger bargaining position.

Can the value of this $24.7 million contract be benchmarked against similar aviation maintenance contracts?

Benchmarking the value of this $24.7 million contract is difficult with the limited data provided. Key factors for comparison would include the specific type of aircraft being serviced, the scope of 'reset, MWOS, and unit support,' the geographic location, and the duration of the contract. Since this was a sole-source award to Vertex Aerospace LLC for RASM-EAST aviation maintenance, finding directly comparable public contracts can be challenging. A thorough benchmark would require access to detailed service descriptions, historical pricing data for similar services from multiple providers, and an understanding of the market rates for specialized aviation MRO services within the Department of Defense. Without these details, assessing whether $24.7 million represents a fair price is speculative.

What is the historical spending pattern for aviation maintenance services by the Department of Defense in this category?

Historical spending patterns for aviation maintenance services by the Department of Defense in the 'Other Support Activities for Air Transportation' category (NAICS 488190) are substantial and fluctuate based on operational tempo, fleet modernization, and budget allocations. The DoD consistently invests billions annually in maintaining its vast fleet of aircraft, encompassing everything from routine servicing to major overhauls and component repairs. Contracts can range from short-term, specialized support like this one, to long-term, comprehensive fleet support agreements. Analyzing historical spending would involve examining trends in contract awards, average contract values, and the distribution of spending between competitive and sole-source procurements within this sector over several fiscal years to identify patterns and potential areas for cost savings or efficiency improvements.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vertex Aerospace Services Corp. (UEI: 081292432)

Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110

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

Financial Breakdown

Contract Ceiling: $24,772,358

Exercised Options: $24,772,358

Current Obligation: $24,772,358

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline