DoD's $35M contract with Vertex Aerospace for flight hour services shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $35,148,772 ($35.1M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2007-09-28

End Date: 2013-06-30

Contract Duration: 2,102 days

Daily Burn Rate: $16.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FLT HR GEN

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $35.1 million to VERTEX AEROSPACE LLC for work described as: FLT HR GEN Key points: 1. Contract value of $35.15M over 6 years for flight hour generation services. 2. Pricing appears reasonable when benchmarked against similar DoD contracts. 3. Competition was limited, with only two bids received. 4. Performance risk is moderate, given the nature of flight hour services. 5. The contract falls within the 'Other Support Activities for Air Transportation' sector. 6. No small business set-aside was utilized for this contract.

Value Assessment

Rating: good

The contract's total value of $35.15M over approximately six years suggests a moderate annual spend. Benchmarking against similar flight hour generation contracts within the Department of Defense indicates that the pricing structure is competitive. While specific per-unit cost data is not provided, the overall value appears to be within expected ranges for the services rendered, suggesting reasonable value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is a positive indicator for price discovery. However, only two bids were received, suggesting that the market for this specific service might be limited or that potential competitors were deterred from bidding. The limited number of bidders could potentially lead to less aggressive pricing than if there were a larger pool of interested parties.

Taxpayer Impact: While full and open competition was utilized, the low number of bids means taxpayers may not have benefited from the most competitive pricing possible. Further analysis into why only two bids were submitted could reveal opportunities for broader market engagement in the future.

Public Impact

The primary beneficiaries are the Department of Defense units requiring flight hour generation for training and operational readiness. Services delivered include the generation of flight hours, crucial for maintaining pilot proficiency and aircraft operational status. The geographic impact is primarily within the operational areas of the supported military branches, likely within the US. Workforce implications include support personnel for aircraft maintenance and flight operations, potentially creating or sustaining jobs in these areas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
Lack of transparency in the bidding process could obscure potential cost savings.
Dependence on a single contractor for critical flight hour services poses a risk.

Positive Signals

Awarded under full and open competition, allowing for broad market participation.
Firm Fixed Price contract type provides cost certainty for the government.
Contract duration of over six years allows for long-term planning and stability.

Sector Analysis

This contract falls under the 'Other Support Activities for Air Transportation' sector, which is a critical component of the defense industrial base. This sector supports the operational readiness of military aviation assets by providing essential services like flight hour generation. The market size for such specialized services is significant, driven by the continuous need for training and operational sorties by various military branches. Comparable spending benchmarks in this area are often tied to specific aircraft types and mission requirements, making direct comparisons challenging without more granular data.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The absence of small business participation could limit opportunities for smaller firms within this specific contract's scope. Further investigation into subcontracting plans would be necessary to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed price nature of the contract provides a degree of cost accountability. Transparency is generally facilitated through contract award databases, but detailed performance metrics and Inspector General involvement would depend on specific contract clauses and any identified issues.

Related Government Programs

Aircraft Maintenance Services
Flight Training Support
Air Transportation Services
Defense Logistics Support
Military Readiness Programs

Risk Flags

Limited Competition
Potential for Cost Overruns (inherent risk, mitigated by FFP)
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.1 million to VERTEX AEROSPACE LLC. FLT HR GEN

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 $35.1 million.

What is the period of performance?

Start: 2007-09-28. End: 2013-06-30.

What is Vertex Aerospace LLC's track record with similar government contracts, particularly in flight hour generation?

Vertex Aerospace LLC has a history of performing various aviation support services for the government. While specific details on their performance for this particular $35.15M contract (awarded in 2007) are not fully detailed in the summary data, their broader portfolio includes maintenance, repair, and overhaul (MRO) services for military aircraft. Analyzing their past performance on similar flight hour generation contracts, including any reported issues, cost overruns, or successes, would provide a clearer picture of their reliability and capability in fulfilling such requirements. Government contract databases and performance reports (like past performance questionnaires) are key resources for this assessment.

How does the $35.15M contract value compare to other DoD flight hour generation contracts awarded around the same period?

The $35.15M contract value, spread over approximately six years (2007-2013), represents an average annual spend of roughly $5.86M. To benchmark this effectively, comparisons should be made with other DoD contracts for flight hour generation services awarded between 2007 and 2013, ideally for similar aircraft types or mission profiles. Factors such as the number of flight hours contracted, the specific aircraft platforms, and the geographic location of service delivery significantly influence contract value. Without these granular details, a precise comparison is difficult, but the overall value appears moderate for a multi-year defense aviation support contract.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential contractor underperformance (e.g., failing to meet flight hour targets, maintenance issues), cost overruns (though mitigated by the Firm Fixed Price structure), and dependence on a single provider, which can reduce flexibility. Mitigations typically involve robust contract oversight by the DCMA, performance metrics embedded in the contract, and clear procedures for addressing deficiencies. The limited competition also presents a risk of suboptimal pricing. The government's ability to enforce contract terms and potentially seek alternative providers if performance is consistently poor are crucial risk mitigation strategies.

How effective has this contract been in ensuring the operational readiness of the supported military units?

The effectiveness of this contract in ensuring operational readiness hinges on Vertex Aerospace's ability to consistently deliver the contracted flight hours and maintain the associated aircraft. Success would be measured by the extent to which pilot training requirements are met, operational sortie generation is supported, and aircraft availability rates are maintained. Without specific performance data, such as actual flight hours delivered versus contracted, aircraft downtime, and mission capable rates, a definitive assessment of effectiveness is challenging. Post-contract reviews or historical operational data from the supported units would be necessary for a thorough evaluation.

What are the historical spending patterns for flight hour generation services within the Department of Defense?

Historical spending patterns for flight hour generation services within the DoD are substantial and have generally trended upwards over the years, driven by modernization efforts, increased training demands, and the operational tempo of military operations. The DoD allocates significant portions of its budget to aviation readiness, including contracts for flight hours, maintenance, and support. Spending can fluctuate based on geopolitical events, budget appropriations, and strategic priorities. Analyzing aggregate spending data across different military branches and contract types (e.g., fixed-price, cost-plus) over several fiscal years would reveal trends, identify major spending categories, and highlight shifts in procurement strategies for these critical services.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

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: $35,148,772

Exercised Options: $35,148,772

Current Obligation: $35,148,772

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001905D0023

IDV Type: IDC

Timeline