DoD's $224M aircraft maintenance contract with DynCorp International shows fair value despite limited competition

Contract Overview

Contract Amount: $22,420,448 ($22.4M)

Contractor: Dyncorp International LLC

Awarding Agency: Department of Defense

Start Date: 2015-10-01

End Date: 2022-09-09

Contract Duration: 2,535 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST NO FEE

Sector: Defense

Official Description: IGF::CT::IGF - T34/T44/T6 AIRCRAFT MAINTENANCE AND CONTRACTOR LOGISITCS SUPPORT (CLS)

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76177

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $22.4 million to DYNCORP INTERNATIONAL LLC for work described as: IGF::CT::IGF - T34/T44/T6 AIRCRAFT MAINTENANCE AND CONTRACTOR LOGISITCS SUPPORT (CLS) Key points: 1. Contract value of $224M over 7 years suggests a significant but potentially manageable annual spend. 2. The contract was awarded via full and open competition, indicating an effort to maximize bidder participation. 3. Performance risk appears moderate, given the nature of aircraft maintenance and logistics support. 4. Sector positioning within Defense Contract Management Agency (DCMA) suggests a focus on specialized aviation services. 5. The contract's duration of 2535 days (approx. 7 years) allows for long-term planning and potential efficiency gains. 6. The 'Cost No Fee' contract type shifts cost risk to the government, requiring robust oversight.

Value Assessment

Rating: fair

The total contract value of $224M over approximately seven years averages to about $32M annually. Benchmarking this against similar large-scale aircraft maintenance and logistics support contracts is challenging without more specific service details. However, the 'Cost No Fee' (CNF) contract type, while common for certain types of support, places the financial risk on the government, necessitating stringent cost controls and oversight to ensure value for money. Without detailed breakdowns of labor hours, parts, and overhead, a precise value-for-money assessment is difficult, but the sustained award over several years suggests a perceived level of acceptable performance and pricing by the agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' which theoretically allows any responsible source to submit an offer. This approach is generally favored for maximizing competition and achieving competitive pricing. However, the number of actual bidders is not specified, which is crucial for understanding the true level of competition. If only a few highly specialized companies could bid, the 'full and open' nature might not translate into robust price discovery.

Taxpayer Impact: A full and open competition is generally beneficial for taxpayers as it aims to solicit the best possible pricing through a wide range of potential offers, potentially driving down costs compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the Department of Defense units relying on the T34/T44/T6 aircraft for their operations. Services delivered include essential maintenance and contractor logistics support, ensuring aircraft readiness and operational capability. The contract's geographic impact is likely concentrated where these aircraft are stationed or operated, primarily within the United States. Workforce implications include the employment of skilled aviation mechanics, technicians, and logistics personnel by DynCorp International.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' (CNF) contract type places significant cost risk on the government, requiring diligent oversight to prevent cost overruns.
Lack of specific performance metrics or award fee structure in the provided data makes it difficult to assess performance incentives.
The long duration of the contract could lead to complacency or reduced competitive pressure if not actively managed.
Limited detail on the specific scope of 'logistics support' could mask potential areas of inefficiency or unmanaged costs.

Positive Signals

Awarded through 'full and open competition,' suggesting an effort to achieve competitive pricing and access a broad base of qualified contractors.
The sustained award to a single contractor over several years may indicate consistent performance and a strong working relationship, leading to operational stability.
The contract supports critical aviation assets for the Department of Defense, contributing directly to national security readiness.
The contractor, DynCorp International, has a significant history in providing aviation support services, suggesting established expertise.

Sector Analysis

This contract falls within the broader aerospace and defense services sector, specifically focusing on aircraft maintenance and logistics. The market for these services is substantial, driven by the ongoing need for military readiness and operational efficiency. Comparable spending benchmarks would typically involve analyzing other large-scale sustainment contracts for military aircraft fleets. The size of this contract ($224M) positions it as a significant award within its niche, reflecting the complexity and scale of supporting multiple aircraft types.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Consequently, the primary impact on the small business ecosystem would be indirect, potentially through subcontracting opportunities if DynCorp International chooses to engage small businesses for specific components or services. However, without explicit subcontracting plans or goals, the direct benefit to small businesses appears limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The 'Cost No Fee' structure necessitates rigorous financial oversight to monitor expenditures and prevent cost overruns. Transparency is facilitated through contract reporting mechanisms, though the level of public detail may vary. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD Aircraft Maintenance Contracts
Contractor Logistics Support (CLS)
Defense Aviation Services
T-34/T-44/T-6 Aircraft Sustainment
Logistics and Maintenance Services

Risk Flags

Cost Control Risk (CNF Contract)
Performance Monitoring Complexity
Potential for Contractor Complacency (Long Duration)
Market Concentration in Specialized Aviation Services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.4 million to DYNCORP INTERNATIONAL LLC. IGF::CT::IGF - T34/T44/T6 AIRCRAFT MAINTENANCE AND CONTRACTOR LOGISITCS SUPPORT (CLS)

Who is the contractor on this award?

The obligated recipient is DYNCORP INTERNATIONAL 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 $22.4 million.

What is the period of performance?

Start: 2015-10-01. End: 2022-09-09.

What is DynCorp International's track record with similar DoD aviation support contracts?

DynCorp International has a long and extensive history of providing aviation support services to the Department of Defense and other government agencies. They have managed numerous large-scale contracts involving aircraft maintenance, modification, logistics, and training for various military platforms, including fixed-wing and rotary-wing aircraft. Their experience spans decades and includes operations in complex environments worldwide. This extensive background suggests a deep understanding of military aviation requirements, regulatory compliance, and operational challenges. However, like many large defense contractors, they have also faced scrutiny and performance reviews on specific contracts, highlighting the importance of ongoing oversight regardless of contractor experience.

How does the $224M contract value compare to industry benchmarks for similar services?

Directly comparing the $224M total contract value to industry benchmarks is challenging without granular data on the specific services rendered, labor rates, parts costs, and overhead structures. However, as an average annual spend of approximately $32M over seven years, it falls within the range of significant sustainment contracts for military aircraft fleets. Larger, more complex platforms or those requiring extensive depot-level maintenance could command higher annual values. Conversely, contracts for simpler aircraft or limited support functions would be lower. The 'Cost No Fee' (CNF) nature also influences the perceived value, as the government bears the direct cost risk, making oversight critical for ensuring cost-effectiveness rather than just competitive pricing.

What are the primary risks associated with a 'Cost No Fee' (CNF) contract for aircraft maintenance?

The primary risk of a 'Cost No Fee' (CNF) contract is that the government assumes all cost risk. This means the contractor is reimbursed for all allowable costs incurred, regardless of whether they exceed initial estimates, and receives no additional fee or profit. While this can incentivize contractors to control costs to avoid exceeding budgets (as they don't profit from overruns), it places a heavy burden on the government's oversight capabilities. Risks include potential for inflated costs, inefficient resource allocation, and a lack of strong contractor incentive to innovate for cost savings beyond basic contract requirements. Robust government auditing and monitoring are essential to mitigate these risks and ensure the government is not overpaying for services.

How effective is 'full and open competition' in ensuring competitive pricing for specialized defense services like aircraft maintenance?

Full and open competition is designed to maximize the number of potential bidders, thereby fostering a competitive environment that theoretically leads to better pricing and value for the government. For specialized defense services like aircraft maintenance, its effectiveness depends heavily on the actual number of capable and qualified companies that can realistically bid. If the market is concentrated with only a few providers possessing the necessary certifications, infrastructure, and experience, the 'full and open' nature might not yield as many competitive offers as intended. In such cases, while the process is procedurally correct, the market dynamics might limit the price discovery. The DoD often uses techniques like pre-qualification or source selection criteria to ensure that while the competition is open, the bidders are genuinely capable.

What are the implications of the contract's duration (approx. 7 years) on performance and cost?

A contract duration of approximately seven years (2535 days) offers several implications. Positively, it provides stability and predictability for both the government and the contractor, allowing for long-term planning, workforce retention, and potential economies of scale in operations. This continuity can lead to improved efficiency and reduced turnover. However, a long duration also carries risks. It can potentially reduce the urgency for cost-saving innovations if the contractor becomes complacent. Furthermore, if the initial pricing or scope was not perfectly aligned with future needs, the government might be locked into suboptimal terms for an extended period. Effective contract management, including regular performance reviews and potential for contract modifications, is crucial to mitigate these risks over such a long term.

What is the significance of the NAICS code 488190 (Other Support Activities for Air Transportation)?

The North American Industry Classification System (NAICS) code 488190 signifies 'Other Support Activities for Air Transportation.' This classification indicates that the contract's scope extends beyond basic aircraft repair to encompass a broader range of services essential for air transportation operations. This could include services like aircraft cleaning, de-icing, ground support, air traffic control support, cargo handling, and potentially specialized maintenance or logistical planning that doesn't fit into more specific categories like engine repair or avionics maintenance. For this specific contract with DynCorp International, it suggests a comprehensive support package for the T34/T44/T6 aircraft, ensuring their operational readiness and logistical chain management.

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

Solicitation ID: N0001914R0018

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Amentum Government Services Holdings LLC (UEI: 117548597)

Address: 13500 HERITAGE PKWY, FORT WORTH, TX, 76177

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,420,448

Exercised Options: $22,420,448

Current Obligation: $22,420,448

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001915D0003

IDV Type: IDC

Timeline