Vertex Aerospace LLC contract for air transportation support valued at over $84.7 million awarded by the Department of Defense

Contract Overview

Contract Amount: $84,705,276 ($84.7M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2009-10-08

End Date: 2013-09-30

Contract Duration: 1,453 days

Daily Burn Rate: $58.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST NO FEE

Sector: Defense

Official Description: FH NASK

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110, UNITED STATES OF AMERICA

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $84.7 million to VERTEX AEROSPACE LLC for work described as: FH NASK Key points: 1. Contract value represents significant investment in aviation support services. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. Contract duration of over 1400 days indicates a long-term need for these services. 4. The 'Other Support Activities for Air Transportation' NAICS code points to specialized aviation services. 5. Contract type 'COST NO FEE' implies the government bears the cost of performance, with the contractor receiving a fixed fee. 6. The contractor, Vertex Aerospace LLC, has been awarded a substantial contract, indicating a level of trust and capability.

Value Assessment

Rating: good

The contract value of $84.7 million over approximately four years for air transportation support appears reasonable given the scope. Benchmarking against similar large-scale aviation support contracts would provide further context. The 'COST NO FEE' contract type means the government covers direct costs, with the contractor's profit derived from a negotiated fee, which can sometimes lead to less incentive for cost control compared to fixed-price contracts. However, the presence of competition suggests pricing was vetted.

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 competitive environment, though a higher number of bidders would typically lead to more aggressive pricing and better value for the government. The competition level here is adequate but could potentially be improved.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are likely military aviation units requiring specialized support services. Services delivered include essential support activities for air transportation, ensuring operational readiness. The contract's geographic impact is centered in Mississippi, where the contractor is located. Workforce implications include job creation and maintenance within the aerospace and aviation support sector in Mississippi.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus contracts can sometimes lead to cost overruns if not managed tightly.
The limited number of bidders (2) might indicate potential barriers to entry or a niche market.
Reliance on a single contractor for a significant duration could pose risks if performance issues arise.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent process.
The substantial contract value indicates a recognized need and a capable provider.
The long contract duration suggests stability and a consistent service delivery model.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government spending. Contracts for air transportation support are crucial for maintaining military readiness and operational capabilities. This $84.7 million contract fits within the broader landscape of defense procurement, where specialized support services are often outsourced to private companies like Vertex Aerospace LLC. Comparable spending benchmarks in this sub-sector would typically involve multi-million dollar contracts for maintenance, logistics, and operational support.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature and value of the contract, it is unlikely that small businesses would be the primary awardees, though they may participate as subcontractors. Further analysis would be needed to determine subcontracting opportunities for small businesses within the Vertex Aerospace LLC supply chain.

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. Accountability measures are embedded within the contract's performance requirements and payment terms. Transparency is facilitated through contract databases, though detailed performance metrics are often not publicly disclosed.

Related Government Programs

Department of Defense Aviation Support Contracts
Aerospace Maintenance and Repair Services
Air Transportation Logistics
Defense Contractor Services

Risk Flags

Cost-plus contract type may reduce contractor incentive for cost control.
Limited number of bidders could indicate potential market concentration or barriers to entry.
Long-term contract duration increases dependency on contractor performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $84.7 million to VERTEX AEROSPACE LLC. FH NASK

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 $84.7 million.

What is the period of performance?

Start: 2009-10-08. End: 2013-09-30.

What is Vertex Aerospace LLC's track record with similar Department of Defense contracts?

Vertex Aerospace LLC has a history of performing contracts for the Department of Defense, often in areas related to aircraft maintenance, modification, and support services. While specific details on past performance for contracts of this exact nature and value may require deeper database dives, their presence as an awardee suggests a demonstrated capability. Analyzing past performance reviews, any contract disputes, or awards for similar services would provide a more comprehensive picture of their reliability and expertise in fulfilling complex aviation support requirements for the military.

How does the value of this contract compare to similar air transportation support contracts awarded by the DoD?

The $84.7 million value for this contract, spanning over 1400 days, places it as a significant award within the realm of specialized air transportation support. To benchmark effectively, one would compare it against other contracts for similar services (e.g., aircraft maintenance, logistics, operational support) awarded by the DoD or other branches of the military over comparable timeframes. Contracts of this magnitude are not uncommon in the defense sector, but the specific nature of 'Other Support Activities for Air Transportation' might narrow the comparison pool. A detailed analysis would involve identifying contracts with similar NAICS codes and service descriptions to assess if the pricing structure and overall value are competitive within the market.

What are the primary risks associated with a 'COST NO FEE' contract of this magnitude?

The primary risk with a 'COST NO FEE' contract is that the government bears the direct costs of performance, and the contractor's profit is limited to a pre-negotiated fee. This structure can potentially reduce the contractor's incentive for aggressive cost control, as they are reimbursed for actual expenses. If not managed diligently through robust oversight and clear performance metrics, there's a risk of cost overruns. The government must ensure that the fee structure adequately incentivizes efficiency and that all costs submitted for reimbursement are reasonable, allocable, and allowable according to federal acquisition regulations.

How effective is 'full and open competition' in ensuring value for money in specialized defense contracting?

Full and open competition is generally considered the most effective method for ensuring value for money in defense contracting. It maximizes the pool of potential bidders, fostering a competitive environment that drives down prices and encourages innovation. However, the effectiveness is contingent on the number and capability of the bidders. In highly specialized fields like air transportation support, the number of qualified bidders might be limited, potentially reducing the competitive pressure. Therefore, while full and open competition provides the framework for value, the actual realization of that value depends on market dynamics and the government's ability to solicit and evaluate proposals effectively.

What is the historical spending trend for 'Other Support Activities for Air Transportation' by the Department of Defense?

Analyzing historical spending trends for the 'Other Support Activities for Air Transportation' (NAICS 488190) by the Department of Defense would reveal the government's consistent or fluctuating investment in this service category. This data can indicate whether this contract represents a typical level of expenditure or a significant increase/decrease. Understanding these trends helps in assessing the long-term strategic importance the DoD places on such support services and provides context for the current contract's value relative to past investments. A consistent upward trend might suggest growing reliance on outsourced support, while a downward trend could indicate shifts in military strategy or in-sourcing efforts.

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: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

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

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

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $84,705,276

Exercised Options: $84,705,276

Current Obligation: $84,705,276

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001908D0014

IDV Type: IDC

Timeline