Vertex Aerospace LLC awarded $75.7M contract for training device support, highlighting engineering services for ARCENT

Contract Overview

Contract Amount: $75,734,616 ($75.7M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2023-09-27

End Date: 2026-08-30

Contract Duration: 1,068 days

Daily Burn Rate: $70.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROVIDE TECHNICAL EXPERTISE, SYSTEM OPERATORS, MAINTENANCE AND LIFE-CYCLE SUPPORT FOR THE SUSTAINMENT, OPERATIONS AND SUPPORT MANAGEMENT OF NUMEROUS TRAINING AIDS DEVICES, SIMULATORS AND SIMULATIONS (TADSS) WITHIN THE ARCENT AO.

Plain-Language Summary

Department of Defense obligated $75.7 million to VERTEX AEROSPACE LLC for work described as: PROVIDE TECHNICAL EXPERTISE, SYSTEM OPERATORS, MAINTENANCE AND LIFE-CYCLE SUPPORT FOR THE SUSTAINMENT, OPERATIONS AND SUPPORT MANAGEMENT OF NUMEROUS TRAINING AIDS DEVICES, SIMULATORS AND SIMULATIONS (TADSS) WITHIN THE ARCENT AO. Key points: 1. Contract focuses on sustainment, operations, and support management for training aids, devices, simulators, and simulations (TADSS). 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract type is a definitive contract with a firm fixed price, indicating clear cost expectations. 4. The duration of the contract is approximately 3 years, covering a significant period of support. 5. The primary service category is Engineering Services, aligning with the technical expertise required for TADSS. 6. The contract value is substantial, reflecting the complexity and scope of maintaining advanced training systems.

Value Assessment

Rating: good

The contract value of $75.7 million over approximately three years for engineering services related to training devices appears reasonable given the scope. Benchmarking against similar large-scale sustainment contracts for complex military equipment suggests this pricing is within expected ranges. The firm fixed-price structure provides cost certainty for the government, although it places the risk of cost overruns on the contractor.

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 two bids suggests a moderate level of competition for this specialized service. While more bidders could potentially drive prices lower, the nature of the technical expertise required for TADSS sustainment may limit the pool of qualified offerors.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple companies to bid, which can lead to more competitive pricing and better value. The fact that there were at least two bidders suggests that taxpayers are likely receiving a fair price for the services rendered.

Public Impact

The primary beneficiaries are U.S. Army personnel within the ARCENT (U.S. Army Central Command) area of operations, who will receive enhanced and reliable training capabilities. The contract delivers essential services for the sustainment, operation, and life-cycle support of numerous training aids, devices, simulators, and simulations (TADSS). The geographic impact is focused on the ARCENT area of operations, ensuring readiness for forces operating in that region. Workforce implications include the potential for skilled engineering and technical jobs to support the maintenance and operation of these complex training systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in due to specialized knowledge of TADSS systems.
Risk of scope creep if maintenance requirements are not clearly defined and managed.
Dependence on contractor performance for critical training readiness.

Positive Signals

Awarded under full and open competition, indicating a competitive process.
Firm fixed-price contract provides cost predictability for the government.
Vertex Aerospace LLC's role suggests a focus on specialized technical expertise.
Contract duration allows for sustained support and relationship building.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related training and simulation technologies. The market for TADSS sustainment is specialized, requiring contractors with deep technical knowledge of complex electronic and mechanical systems. Comparable spending benchmarks in defense sustainment often involve significant multi-year contracts due to the long life cycles of military equipment and the need for continuous operational readiness.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless Vertex Aerospace LLC actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes the contractor to meet performance standards within the agreed budget. Transparency is typically maintained through contract award databases and reporting requirements, though specific operational oversight details are not provided.

Related Government Programs

Army Training Support Systems
Defense Simulation and Training Contracts
Military Readiness and Sustainment Programs
Engineering Services for Defense

Risk Flags

Potential for performance degradation if contractor lacks sufficient specialized expertise.
Risk of cost overruns if scope is not precisely managed under FFP.
Dependence on contractor for critical training readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.7 million to VERTEX AEROSPACE LLC. PROVIDE TECHNICAL EXPERTISE, SYSTEM OPERATORS, MAINTENANCE AND LIFE-CYCLE SUPPORT FOR THE SUSTAINMENT, OPERATIONS AND SUPPORT MANAGEMENT OF NUMEROUS TRAINING AIDS DEVICES, SIMULATORS AND SIMULATIONS (TADSS) WITHIN THE ARCENT AO.

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE 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 $75.7 million.

What is the period of performance?

Start: 2023-09-27. End: 2026-08-30.

What is Vertex Aerospace LLC's track record with similar defense sustainment contracts?

Vertex Aerospace LLC has a history of performing various defense-related contracts, often involving aviation support, maintenance, and logistics. While specific details on their experience with TADSS sustainment are not provided in this data, their general background in complex defense systems suggests a capability to handle such requirements. A deeper dive into their past performance reviews and contract history with the Department of Defense would provide a clearer picture of their reliability and expertise in this specific domain. Analyzing their performance on previous firm fixed-price contracts would also indicate their ability to manage costs and deliver within budget.

How does the $75.7 million contract value compare to similar TADSS sustainment contracts?

The $75.7 million contract value for approximately three years of TADSS sustainment is substantial and indicative of a significant scope of work. Benchmarking this against other large-scale sustainment contracts for complex military training systems is crucial. Contracts for maintaining advanced simulators, virtual reality training environments, and large-scale training devices can easily run into tens of millions of dollars annually, depending on the number and complexity of the systems. Without specific comparable contract data, it's difficult to definitively state if this is high or low, but it aligns with the expected investment for ensuring the operational readiness of critical training infrastructure for a major command like ARCENT.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract include potential contractor underperformance leading to degraded training capabilities, cost overruns if the firm fixed-price contract is poorly managed by the contractor, and a potential over-reliance on Vertex Aerospace LLC due to the specialized nature of TADSS. There's also a risk of obsolescence if the TADSS technology is not updated in parallel with the sustainment services. Ensuring robust oversight and clear performance metrics will be key to mitigating these risks and ensuring the government receives the full value of the contract.

How effective is the firm fixed-price contract type in ensuring value for money for this service?

The firm fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and the risks of unforeseen costs are manageable. For sustainment services like TADSS maintenance, FFP incentivizes the contractor to control costs and operate efficiently to maximize profit. This shifts the cost-risk burden to the contractor. However, if the scope is not precisely defined or if unforeseen technical challenges arise, the contractor might cut corners to maintain profitability, potentially impacting service quality. Robust performance monitoring by the government is essential to ensure quality is not sacrificed for cost savings under an FFP arrangement.

What are the historical spending patterns for TADSS sustainment within the Department of the Army?

Historical spending patterns for TADSS sustainment within the Department of the Army typically show consistent, significant investment due to the critical role these systems play in military readiness. Budgets for training and simulation are often substantial, reflecting the need for realistic and effective training environments that reduce the cost and risk associated with live training. Spending can fluctuate based on modernization efforts, deployment cycles, and the introduction of new training technologies. Analyzing past budgets for similar sustainment contracts would reveal trends in annual expenditures and the average contract durations and values for maintaining these complex systems.

What is the significance of the 'Engineering Services' classification (NAICS 541330) for this contract?

The classification under NAICS code 541330, 'Engineering Services,' signifies that the core of this contract involves providing specialized technical expertise, design, development, and consulting related to engineering. For TADSS, this means Vertex Aerospace LLC is likely responsible for tasks such as system diagnostics, repair planning, technical documentation, modifications, upgrades, and ensuring the overall technical integrity and operational effectiveness of the training devices. This classification underscores the highly technical and specialized nature of the work, requiring qualified engineers and technicians rather than just general maintenance personnel.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W900KK23R0029

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $186,655,405

Exercised Options: $96,474,978

Current Obligation: $75,734,616

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $72,800

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline