Vertex Aerospace LLC awarded $26.4M contract for air transportation support, highlighting strong competition

Contract Overview

Contract Amount: $26,418,565 ($26.4M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2010-09-27

End Date: 2011-09-30

Contract Duration: 368 days

Daily Burn Rate: $71.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ENG/TECH

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to VERTEX AEROSPACE LLC for work described as: ENG/TECH Key points: 1. Contract value of $26.4M for air transportation support indicates significant investment in aviation logistics. 2. The contract was awarded under full and open competition, suggesting a robust marketplace for these services. 3. A fixed-price contract type generally transfers risk to the contractor, potentially stabilizing costs. 4. The duration of 368 days provides a clear timeframe for service delivery and performance evaluation. 5. Awarded by the Defense Contract Management Agency, this contract likely supports critical military aviation operations. 6. The contractor, Vertex Aerospace LLC, is positioned to deliver specialized support activities.

Value Assessment

Rating: good

The contract value of $26.4 million for air transportation support appears reasonable given the scope of services typically required by defense agencies. Benchmarking against similar contracts for aviation logistics and maintenance support would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor bears the primary financial risk, which can be advantageous for the government if costs are managed effectively. However, without specific performance metrics or detailed service breakdowns, a definitive assessment of cost efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified vendors were invited to bid. The presence of 3 bidders suggests a healthy level of competition for this type of service. This competitive environment is generally expected to drive more favorable pricing and service offerings for the government, as contractors vie for the award. The agency's decision to pursue full and open competition implies confidence in the availability of multiple capable sources in the market.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and higher quality services due to contractor rivalry. This process ensures that government funds are utilized efficiently by selecting the best value offer.

Public Impact

The primary beneficiaries are likely military personnel and operations that rely on efficient air transportation and logistical support. Services delivered include 'Other Support Activities for Air Transportation,' which could encompass maintenance, ground handling, or specialized logistical planning. The contract's geographic impact is centered in Mississippi, where the award was made, potentially supporting regional economic activity and employment. Workforce implications may include job creation or utilization of skilled aviation technicians and support staff within Vertex Aerospace LLC and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise in air transportation support.
Dependence on a single contractor for critical aviation logistics could pose a risk if performance falters.
Ensuring consistent quality and adherence to stringent aviation safety standards requires diligent oversight.

Positive Signals

Awarded under full and open competition, indicating a competitive marketplace and potentially better value.
Firm fixed-price contract type shifts cost risk to the contractor.
The contract duration allows for sustained support and performance evaluation.

Sector Analysis

The 'Other Support Activities for Air Transportation' sector is a critical component of the broader aerospace and defense industry. This contract falls within the services segment, focusing on operational support rather than manufacturing. The market for such services is often characterized by specialized expertise and stringent regulatory requirements, particularly when serving government clients. Comparable spending benchmarks in this sector are highly dependent on the specific nature of the support provided, but contracts of this magnitude suggest significant operational requirements.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. The award to Vertex Aerospace LLC, a company of unspecified size in this context, suggests it may be a larger entity or that small business participation was not a primary set-aside criterion. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this contract.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to meet cost and performance targets. Transparency is facilitated through contract award databases, though detailed performance reports are typically internal. The DCMA's role includes monitoring progress, quality, and delivery, providing a key layer of government oversight.

Related Government Programs

Air Mobility Command Contracts
Aviation Maintenance Support Services
Defense Logistics Agency Contracts
Aircraft Component Support
Base Operations Support Contracts

Risk Flags

Potential performance issues due to complexity of air transportation support.
Risk of cost overruns if scope changes or unforeseen issues arise.
Dependence on contractor's financial stability and operational capacity.
Ensuring compliance with stringent aviation safety and regulatory standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to VERTEX AEROSPACE LLC. ENG/TECH

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 $26.4 million.

What is the period of performance?

Start: 2010-09-27. End: 2011-09-30.

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

Vertex Aerospace LLC has a history of performing various support services for the Department of Defense. While specific details on past performance for 'Other Support Activities for Air Transportation' are not provided in this data snippet, their involvement suggests experience in defense logistics and aviation support. A deeper dive into their contract history, including past performance reviews and any reported issues on previous awards, would be necessary for a comprehensive assessment. Analyzing their success rate on similar firm fixed-price contracts would also provide insight into their reliability and cost management capabilities.

How does the $26.4 million value compare to industry benchmarks for similar air transportation support services?

Benchmarking the $26.4 million contract value requires a detailed understanding of the specific services rendered under 'Other Support Activities for Air Transportation.' If the contract includes comprehensive maintenance, repair, overhaul (MRO), or complex logistical planning for a significant fleet, the value could be considered standard or even competitive. However, if the services are more limited in scope, such as ground support or basic transit coordination, the value might be on the higher end. Industry benchmarks are often proprietary or require access to specialized databases that track service costs based on fleet size, aircraft type, and service level agreements.

What are the primary risks associated with this firm fixed-price contract for air transportation support?

The primary risks for the government in a firm fixed-price contract for air transportation support revolve around potential contractor underperformance or unforeseen cost escalations that are not adequately captured in the fixed price. While the contractor assumes most financial risk, if Vertex Aerospace LLC faces unexpected operational challenges, supply chain disruptions, or labor shortages, they might struggle to deliver services as contracted, potentially impacting mission readiness. There's also a risk that the contractor may cut corners on quality to maintain profitability, necessitating robust government oversight to ensure standards are met. The government's risk is mitigated by clear contract terms and performance metrics.

What is the expected program effectiveness and impact on military readiness?

The effectiveness of this contract is directly tied to Vertex Aerospace LLC's ability to provide reliable and timely 'Other Support Activities for Air Transportation.' Successful execution should enhance military readiness by ensuring aircraft are operational, logistical chains are unbroken, and support functions are efficiently managed. The impact on readiness is likely positive if the services provided are critical to aircraft availability and operational tempo. Conversely, any deficiencies in service delivery could negatively impact mission accomplishment and response times. The DCMA's oversight is crucial for ensuring the program meets its intended effectiveness goals.

How has federal spending in 'Other Support Activities for Air Transportation' evolved over the past five years?

Federal spending in 'Other Support Activities for Air Transportation' has generally seen fluctuations driven by defense budget allocations, operational tempo, and modernization efforts. While specific year-over-year data for this precise category isn't provided, broader trends in defense logistics and aviation support indicate sustained investment. Periods of increased global engagement or strategic shifts often lead to higher spending in this area. Conversely, budget austerity measures or a focus on different defense priorities might result in reduced outlays. Analyzing historical spending patterns for the Department of Defense and related agencies would reveal trends in demand for these critical support services.

What is the significance of the contract being awarded by the Defense Contract Management Agency (DCMA)?

The award being managed by the Defense Contract Management Agency (DCMA) signifies that this contract is subject to rigorous oversight and quality assurance processes specific to defense acquisitions. DCMA's role is to ensure that defense contractors meet contractual requirements, deliver quality products and services, and adhere to schedules and budgets. Their involvement suggests that the services provided are critical to defense operations and require specialized monitoring. This agency's expertise in contract administration provides an added layer of assurance for the government and taxpayers regarding the effective use of funds and the successful execution of the contract.

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, 39110

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $26,418,565

Exercised Options: $26,418,565

Current Obligation: $26,418,565

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001904D0131

IDV Type: IDC

Timeline