DoD's $110.8M contract for aircraft technical services awarded to PAE Aviation and Technical Services LLC

Contract Overview

Contract Amount: $110,817,277 ($110.8M)

Contractor: PAE Aviation and Technical Services LLC

Awarding Agency: Department of Defense

Start Date: 2008-12-01

End Date: 2011-06-30

Contract Duration: 941 days

Daily Burn Rate: $117.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: TIME AND MATERIAL LABOR TO REPAIR, OVERHAUL, RESET, RECAPITALIZE, FABRICATE, MANUFACTURE, REMANUFACTURE, INTEGRATE, ENGINEER, AND PROVIDE LOGISTICS SUPPORT AT TOBYHANNA ARMY DEPOT.

Place of Performance

Location: TOBYHANNA, MONROE County, PENNSYLVANIA, 18466

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $110.8 million to PAE AVIATION AND TECHNICAL SERVICES LLC for work described as: TIME AND MATERIAL LABOR TO REPAIR, OVERHAUL, RESET, RECAPITALIZE, FABRICATE, MANUFACTURE, REMANUFACTURE, INTEGRATE, ENGINEER, AND PROVIDE LOGISTICS SUPPORT AT TOBYHANNA ARMY DEPOT. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Time and Materials, which can pose cost control challenges if not managed closely. 3. Performance period of 941 days indicates a significant duration for the services provided. 4. The contract was awarded as a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. The North American Industry Classification System (NAICS) code 336411 points to aircraft manufacturing, a specialized sector. 6. The contract was awarded to PAE Aviation and Technical Services LLC, a known entity in the aerospace and defense sector.

Value Assessment

Rating: fair

The contract's value of $110.8 million over approximately 2.5 years suggests a substantial investment in aircraft technical services. Without specific benchmarks for similar services at Tobyhanna Army Depot or comparable facilities, a precise value-for-money assessment is difficult. However, the Time and Materials (T&M) pricing structure inherently carries a higher risk of cost overruns compared to fixed-price contracts if not meticulously monitored. The contract's duration and scope imply a need for specialized expertise, which can justify higher costs, but transparency in labor rates and material markups would be crucial for confirming fair pricing.

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 7 bidders suggests a reasonably competitive environment for these specialized aircraft technical services. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. The specific details of the bidding process, such as the evaluation criteria and the number of proposals received, would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition, with multiple bidders, generally benefits taxpayers by driving down prices through market forces and encouraging efficiency among contractors vying for the award.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches of the Department of Defense requiring aircraft maintenance and technical support. Services delivered include repair, overhaul, reset, recapitalization, fabrication, manufacturing, remanufacturing, integration, engineering, and logistics support for aircraft. The geographic impact is centered around Tobyhanna Army Depot in Pennsylvania, a key logistics and maintenance hub. Workforce implications include the potential employment of skilled technicians, engineers, and support staff by the contractor, PAE Aviation and Technical Services LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not closely managed and monitored.
Lack of specific performance metrics or outcome-based measures in the provided data makes it difficult to assess the efficiency and effectiveness of the services.
The broad scope of services (repair, overhaul, manufacturing, engineering) could lead to complexities in oversight and quality control.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
The contractor, PAE Aviation and Technical Services LLC, is likely experienced in providing aviation and technical support services.
The contract supports critical military aviation readiness and sustainment operations.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and support services. The market for aircraft maintenance, repair, and overhaul (MRO) is substantial, driven by the operational needs of military branches and commercial aviation. Spending in this area is often characterized by long-term sustainment contracts, specialized technical requirements, and a mix of government-owned facilities and contractor support. Comparable spending benchmarks would typically involve analyzing other large MRO contracts awarded by the DoD or other defense agencies for similar aircraft types or service scopes.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a prime contractor, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans or goals detailed in the award, the direct impact on the small business ecosystem is unclear. The focus on specialized aircraft manufacturing and technical services might also limit the direct applicability for many small businesses unless they possess niche capabilities.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting agency, the Department of the Air Force, and the relevant program management offices within the Department of Defense. Mechanisms likely include contract surveillance, performance reviews, and audits to ensure compliance with contract terms and quality standards. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Maintenance and Repair Services
Logistics Support Services
Defense Manufacturing Contracts
Tobyhanna Army Depot Operations
Aerospace Engineering Services
Time and Materials Contracts

Risk Flags

Time and Materials Pricing Structure
Potential for Cost Overruns
Complexity of Service Scope
Need for Robust Oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $110.8 million to PAE AVIATION AND TECHNICAL SERVICES LLC. TIME AND MATERIAL LABOR TO REPAIR, OVERHAUL, RESET, RECAPITALIZE, FABRICATE, MANUFACTURE, REMANUFACTURE, INTEGRATE, ENGINEER, AND PROVIDE LOGISTICS SUPPORT AT TOBYHANNA ARMY DEPOT.

Who is the contractor on this award?

The obligated recipient is PAE AVIATION AND TECHNICAL SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $110.8 million.

What is the period of performance?

Start: 2008-12-01. End: 2011-06-30.

What is the historical spending pattern for PAE Aviation and Technical Services LLC with the Department of Defense, particularly for aircraft technical services?

Analyzing the historical spending for PAE Aviation and Technical Services LLC with the Department of Defense reveals a significant engagement in aviation and technical support. Prior to and following this specific $110.8 million contract (2008-2011), PAE has secured numerous other contracts across various DoD branches. These often encompass a wide range of services including aircraft maintenance, logistics, base operations support, and engineering. The company's track record suggests a consistent ability to win and perform on large-scale defense contracts. Specific spending patterns would show a concentration in areas related to aviation sustainment and operational support, reflecting their core competencies. Examining the total value and frequency of awards over time provides context for their role as a major defense contractor.

How does the $110.8 million contract value compare to other similar aircraft technical support contracts awarded by the DoD during the same period?

The $110.8 million contract value for aircraft technical services awarded to PAE Aviation and Technical Services LLC between 2008 and 2011 is substantial, placing it among significant procurements for sustainment and readiness. During this period, the DoD was heavily engaged in operations requiring robust aircraft support. Comparable contracts often ranged from tens of millions to hundreds of millions of dollars, depending on the scope, duration, and specific aircraft platforms involved. For instance, large-scale depot maintenance contracts, complex overhaul programs, or extensive logistics support agreements could easily reach or exceed this value. The Time and Materials (T&M) nature of this contract, however, means its final cost could fluctuate, making direct comparisons to fixed-price contracts less precise. Nonetheless, its value indicates a critical need for the services provided at Tobyhanna Army Depot.

What are the primary risks associated with a Time and Materials (T&M) contract of this magnitude for aircraft technical services?

The primary risks associated with a $110.8 million Time and Materials (T&M) contract for aircraft technical services revolve around cost control and contractor performance oversight. T&M contracts pay the contractor for the actual labor hours and material costs incurred, plus a fee or profit. This structure inherently shifts cost risk to the government. Without stringent monitoring of labor rates, hours worked, and material costs, there is a significant risk of cost overruns and potential for inefficient practices by the contractor. For aircraft technical services, which can involve complex diagnostics, repairs, and specialized labor, ensuring that all billed hours and materials are necessary, reasonable, and allocable is paramount. Effective oversight requires detailed tracking, auditing, and robust communication channels to manage scope creep and ensure value for taxpayer money.

How effective is the 'full and open competition' process in ensuring competitive pricing for specialized defense services like aircraft manufacturing and repair?

The 'full and open competition' process is generally considered the most effective method for ensuring competitive pricing for specialized defense services. By allowing all responsible sources to submit proposals, it maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive offers. The presence of 7 bidders for this specific contract suggests that the market for these aircraft technical services was sufficiently robust to attract multiple interested parties. This competition drives contractors to offer their best pricing and technical solutions to win the award. However, the effectiveness is also contingent on the clarity of the solicitation requirements, the fairness of the evaluation criteria, and the government's ability to adequately assess proposals. For highly specialized services, the number of capable bidders might be limited, potentially tempering the competitive pressure.

What are the implications of the NAICS code 336411 (Aircraft Manufacturing) for the type of services rendered under this contract?

The North American Industry Classification System (NAICS) code 336411, 'Aircraft Manufacturing,' indicates that the services procured under this contract are closely related to the production, assembly, modification, or extensive overhaul of aircraft. While the contract description includes 'repair, overhaul, reset, recapitalize, fabricate, manufacture, remanufacture, integrate, engineer, and provide logistics support,' the primary NAICS code suggests a focus on activities that go beyond routine maintenance. This could involve significant structural work, component manufacturing, system integration, or even remanufacturing of aircraft to extend their service life or upgrade capabilities. The 'manufacturing' aspect implies a higher level of technical complexity and potentially higher costs associated with specialized labor, materials, and facilities compared to simpler repair services.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Holding Corporation (UEI: 968071493)

Address: 12000 HORIZON WAY STE 400, MOUNT LAUREL, NJ, 08054

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $117,230,107

Exercised Options: $117,230,107

Current Obligation: $110,817,277

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810809D0003

IDV Type: IDC

Timeline