Vertex Aerospace LLC awarded $10.18M for aircraft maintenance, a contract with a long duration and full and open competition

Contract Overview

Contract Amount: $10,176,854 ($10.2M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2004-10-29

End Date: 2011-05-05

Contract Duration: 2,379 days

Daily Burn Rate: $4.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MAINT-REP OF AIRCRAFT

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $10.2 million to VERTEX AEROSPACE LLC for work described as: MAINT-REP OF AIRCRAFT Key points: 1. The contract's extended duration suggests a need for sustained support, potentially indicating a stable but long-term requirement. 2. Full and open competition was utilized, which typically fosters competitive pricing and broader market participation. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor and provides budget certainty. 4. The award was made by the Defense Contract Management Agency, indicating a focus on defense-related support services. 5. The North American Industry Classification System (NAICS) code 488190 points to 'Other Support Activities for Air Transportation', a specialized service area. 6. The contract's value, while significant, needs to be benchmarked against similar long-term maintenance agreements for context.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of aircraft maintenance and the specific aircraft types supported. However, the total value over its duration suggests a substantial investment. The firm fixed-price nature provides cost certainty for the government, but the ultimate value for money depends on the contractor's efficiency and the quality of services delivered over the long term. Comparing this to other long-term aircraft maintenance contracts would provide a clearer picture of its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 3 bidders suggests a moderate level of competition for this specific requirement. While more bidders could potentially drive prices lower, three offers generally provide a reasonable basis for price comparison and selection.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages a wider range of companies to bid, potentially leading to more competitive pricing and innovative solutions.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential aircraft maintenance services to ensure operational readiness. The contract supports air transportation activities, crucial for military logistics and operations. The geographic impact is likely concentrated around the operational bases or maintenance facilities where the contractor performs services. The contract supports a workforce skilled in aircraft maintenance and repair, contributing to employment in specialized technical fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to complacency or reduced urgency if not actively managed.
Firm Fixed Price contracts can sometimes lead to contractor attempts to cut corners if quality control is insufficient.
Reliance on a single contractor for extended periods may limit flexibility to adapt to changing technological needs or market conditions.

Positive Signals

Full and open competition suggests a robust process that likely yielded a competitive price.
The firm fixed-price contract structure provides budget certainty for the government.
The extended duration indicates a stable, long-term need that the contractor is positioned to meet.

Sector Analysis

The aerospace and defense industry is characterized by complex, high-value contracts for specialized services. Aircraft maintenance and repair fall under the broader 'Other Support Activities for Air Transportation' sector. This contract represents a significant portion of spending within this niche, requiring specialized technical expertise and adherence to stringent quality and safety standards. Benchmarking against similar long-term maintenance contracts for military aircraft would provide further context on market rates and typical contract values.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities, if any, offered by Vertex Aerospace LLC. Without specific subcontracting plans or goals, it's difficult to assess the direct impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. The firm fixed-price nature of the contract provides a degree of accountability by placing cost risk on the contractor. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and oversight activities are often internal to the agency.

Related Government Programs

Aircraft Maintenance Services
Defense Logistics Support
Aerospace Repair and Overhaul
Military Aviation Support Contracts

Risk Flags

Long contract duration may require proactive management to ensure continued relevance and performance.
Firm Fixed Price contracts necessitate strong quality assurance to prevent degradation of service.
Limited competition (3 bidders) may mean potential for lower prices was not fully realized.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.2 million to VERTEX AEROSPACE LLC. MAINT-REP OF AIRCRAFT

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 $10.2 million.

What is the period of performance?

Start: 2004-10-29. End: 2011-05-05.

What is the historical spending pattern for aircraft maintenance by the Department of Defense, and how does this contract compare?

The Department of Defense (DoD) consistently allocates substantial funds towards aircraft maintenance, repair, and overhaul (MRO) services, recognizing its critical role in maintaining operational readiness. Annual spending on aircraft MRO can range in the tens of billions of dollars across all branches. This specific contract, valued at approximately $10.18 million over its duration, represents a relatively small portion of the DoD's overall aircraft maintenance budget. However, its significance lies in its long-term nature and the specific support it provides. To provide a more precise comparison, one would need to analyze historical spending on similar long-duration, firm-fixed-price contracts for the specific types of aircraft or maintenance services covered by this award. Trends in competition levels and average contract values for similar services over time would also offer valuable context.

What is Vertex Aerospace LLC's track record with government contracts, particularly in aircraft maintenance?

Vertex Aerospace LLC has a history of performing government contracts, primarily within the aerospace and defense sector. Their experience often includes aircraft maintenance, modification, and support services. Analyzing their past performance on similar contracts, including on-time delivery, quality of work, and adherence to budget, is crucial for assessing their reliability. Government contract databases and past performance reviews can provide insights into their success rates and any past issues. For this specific contract, the award itself suggests they met the government's requirements and demonstrated capability. However, a deeper dive into their contract history, including any awards, penalties, or contract terminations, would offer a more comprehensive understanding of their track record.

How does the firm fixed-price contract type impact risk and value for money in this aircraft maintenance agreement?

A Firm Fixed Price (FFP) contract shifts the majority of cost risk from the government to the contractor, Vertex Aerospace LLC. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For the government, this provides significant budget certainty and predictability. The value for money is realized if the contractor can efficiently perform the required maintenance within the fixed price, potentially achieving higher profit margins through effective management. However, if the contractor underestimates costs or encounters unforeseen issues, they bear the loss. Conversely, if the government's requirements change significantly, modifications to the FFP contract can be complex and costly. Effective oversight is still necessary to ensure the quality of work meets standards, as the contractor might be incentivized to reduce costs by cutting corners if not properly monitored.

What are the potential risks associated with a long-duration contract (2379 days) for aircraft maintenance?

Long-duration contracts, such as this 2379-day (approximately 6.5 years) agreement, present several potential risks. Firstly, there's the risk of technological obsolescence; aircraft and maintenance technologies can evolve rapidly, and a long-term contract might not easily accommodate newer, more efficient methods or parts unless specifically structured for it. Secondly, contractor performance can degrade over time due to complacency or changes in their internal operations, requiring robust performance monitoring. Thirdly, market conditions and material costs can fluctuate significantly over such a long period, potentially impacting the contractor's ability to maintain profitability without compromising quality, especially under a fixed-price agreement. Lastly, the government's own needs or strategic priorities might shift, making the contracted services less relevant or requiring costly renegotiations if the contract doesn't allow for flexibility.

How does the competition level (3 bidders) for this contract influence pricing and potential for innovation?

Having three bidders for this contract indicates a moderate level of competition. While more bidders could theoretically drive prices down further and introduce a wider array of innovative approaches, three offers generally provide a reasonable basis for price comparison and selection. It suggests that the market for this specific type of aircraft maintenance is not overly concentrated but also not so broad that it guarantees the lowest possible price. The government can benchmark the awarded price against the other two bids to ensure it is within a competitive range. The level of innovation spurred by three bidders depends on the specific requirements of the solicitation; if the solicitation was highly prescriptive, innovation might be limited. If it allowed for more flexible solutions, the bidders might have presented different approaches, fostering some degree of innovation.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 555 INDUSTRIAL DR S, MADISON, MS, 03

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,176,854

Exercised Options: $10,176,854

Current Obligation: $10,176,854

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001904D0131

IDV Type: IDC

Timeline