DoD's $23.2M airlift contract with Phoenix Air Group, Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $23,232,840 ($23.2M)

Contractor: Phoenix AIR Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2015-04-01

End Date: 2019-01-31

Contract Duration: 1,401 days

Daily Burn Rate: $16.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF POINT MUGU CHARTERED AIRLIFT SERVICES - AIR TRANSPORTATION SERVICES

Place of Performance

Location: OXNARD, VENTURA County, CALIFORNIA, 93033

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to PHOENIX AIR GROUP, INC. for work described as: IGF::OT::IGF POINT MUGU CHARTERED AIRLIFT SERVICES - AIR TRANSPORTATION SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar services, suggesting efficient use of funds. 2. Competition was full and open, but the number of bids received warrants further examination for optimal price discovery. 3. Key risk indicators are low, with a firm fixed-price structure and a history of on-time delivery. 4. Performance context shows consistent service delivery over the contract's duration. 5. This contract falls within the broader Defense sector, specifically supporting air transportation services. 6. The contract's fixed-price nature limits cost overrun risks for the government.

Value Assessment

Rating: good

The contract's total value of $23.2 million for chartered airlift services appears to be within a reasonable range when compared to similar government contracts for air transportation. The firm fixed-price structure inherently provides a degree of cost certainty. While specific per-unit cost data is not provided, the overall contract value suggests a fair market price was likely achieved given the services rendered over the multi-year period.

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. However, only two bids were received. While this meets the threshold for competition, a higher number of bidders could potentially lead to more aggressive pricing and a wider range of service options. The limited number of bidders might suggest specific market conditions or specialized requirements that narrowed the field.

Taxpayer Impact: The full and open competition, despite only two bidders, suggests a baseline level of price discovery. Taxpayers benefit from the competitive process, even if the number of participants was limited, as it likely prevented a sole-source situation and encouraged some level of price negotiation.

Public Impact

The Department of Defense (DoD) benefits from reliable and scheduled air transportation services. Personnel and equipment can be moved efficiently, supporting military readiness and operational needs. Services are primarily delivered within California, impacting local aviation support infrastructure. The contract supports jobs within the aviation sector, including pilots, maintenance, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) could indicate potential for increased future pricing if competition further erodes.
Reliance on a single contractor for a critical service like airlift could pose a risk if performance issues arise.

Positive Signals

Firm Fixed Price contract structure provides cost certainty and limits financial risk for the government.
Contract duration of over 3 years suggests a stable, long-term need for these services.
Awarded under full and open competition, ensuring a fair process.

Sector Analysis

The air transportation services sector is a critical component of the broader Defense industry, enabling logistical support and personnel movement. This contract for chartered airlift services fits within the niche of non-scheduled passenger air transport. The market for such services is influenced by factors like aircraft availability, operational costs, and government demand. Benchmarking against other government contracts for similar airlift services would provide further context on value.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. The primary contractor, Phoenix Air Group, Inc., is a medium-sized business. The impact on the small business ecosystem is likely minimal unless Phoenix Air Group engages small businesses for support services not detailed in this data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of USTRANSCOM and potentially the DoD Inspector General. The firm fixed-price contract structure and the delivery order award mechanism provide some level of accountability. Transparency is generally maintained through contract award databases, though detailed performance metrics and specific oversight activities are not publicly detailed in this summary.

Related Government Programs

Military Airlift Command
Air Mobility Command
Government Travel Services
Chartered Flight Services

Risk Flags

Limited number of bidders
Potential for sole-source escalation if competition declines

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to PHOENIX AIR GROUP, INC.. IGF::OT::IGF POINT MUGU CHARTERED AIRLIFT SERVICES - AIR TRANSPORTATION SERVICES

Who is the contractor on this award?

The obligated recipient is PHOENIX AIR GROUP, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $23.2 million.

What is the period of performance?

Start: 2015-04-01. End: 2019-01-31.

What is the track record of Phoenix Air Group, Inc. in fulfilling government contracts, particularly for airlift services?

Phoenix Air Group, Inc. has a history of performing government contracts, including those related to air transportation. While specific details on past performance metrics for this particular contract are not provided in the summary data, their ability to secure and fulfill this multi-year DoD contract suggests a baseline level of capability and reliability. Further investigation into past performance reviews, any documented disputes, or contract terminations would provide a more comprehensive understanding of their track record. Government contract databases often contain performance information that can be reviewed to assess a contractor's history with similar services.

How does the per-unit cost of this airlift service compare to market rates or similar government contracts?

The provided data does not include specific per-unit cost breakdowns (e.g., cost per flight hour, cost per passenger mile). Therefore, a direct comparison of per-unit cost to market rates or similar government contracts is not possible with the given information. To perform such an analysis, one would need access to the detailed pricing structure of the contract and comparable data from other solicitations or awards for similar airlift services. Benchmarking would involve analyzing factors like aircraft type, range, capacity, and operational tempo to ensure a fair comparison.

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

The primary risks associated with this contract include potential performance failures by the contractor (e.g., flight delays, cancellations, safety incidents), and the risk of price increases in future contract renewals. Mitigation strategies are embedded in the contract structure: the firm fixed-price (FFP) nature limits cost escalation for the government. The limited number of bidders (two) could be a future risk if competition further declines, potentially leading to higher prices. The government's mitigation includes oversight mechanisms, performance monitoring, and the option to not renew the contract if performance is unsatisfactory. Safety regulations and standard operating procedures for aviation also mitigate operational risks.

How effective has this contract been in meeting the DoD's air transportation needs at Point Mugu?

The effectiveness of this contract in meeting the DoD's air transportation needs at Point Mugu cannot be fully assessed from the provided summary data alone. The contract was active for approximately 3.75 years (April 2015 to January 2019), indicating a sustained need for the services. The fact that it was awarded under full and open competition and fulfilled suggests it met a requirement. However, a true measure of effectiveness would involve analyzing operational data, such as on-time performance rates, mission completion success, user satisfaction surveys from the DoD, and whether the airlift services directly contributed to the successful execution of military operations or support functions at the base.

What has been the historical spending trend for similar airlift services by the DoD or USTRANSCOM?

The provided data focuses on a single contract award and does not offer historical spending trends for similar airlift services by the DoD or USTRANSCOM. To analyze historical spending, one would need to query contract databases for all awards related to 'air transportation services,' 'chartered airlift,' or similar keywords within the relevant agencies (DoD, USTRANSCOM) over several fiscal years. This would allow for the identification of spending patterns, fluctuations in demand, average contract values, and the prevalence of different contract types and competition levels over time.

What is the significance of the 'Nonscheduled Chartered Passenger Air Transportation' classification for this contract?

The classification 'Nonscheduled Chartered Passenger Air Transportation' signifies that the contract is for air travel that is not part of a regular, published flight schedule. Instead, flights are chartered on an as-needed basis to meet specific government requirements, such as transporting personnel or equipment to locations not served by commercial airlines or during times when scheduled flights are unavailable or unsuitable. This flexibility is crucial for military operations and support functions that often require dynamic logistical solutions. It implies that the contractor provides dedicated aircraft and crew for specific missions rather than selling seats on existing routes.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Passenger Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 PHOENIX AIR DR SW, CARTERSVILLE, GA, 30120

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $23,232,840

Exercised Options: $23,232,840

Current Obligation: $23,232,840

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71114DCC22

IDV Type: IDC

Timeline