DoD's $34M MI-17 Overhaul contract awarded to Raytheon Technical Services Company LLC
Contract Overview
Contract Amount: $33,999,777 ($34.0M)
Contractor: Raytheon Technical Services Company LLC
Awarding Agency: Department of Defense
Start Date: 2010-09-30
End Date: 2014-05-31
Contract Duration: 1,339 days
Daily Burn Rate: $25.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST NO FEE
Sector: Defense
Official Description: MI-17 OVERHAUL
Place of Performance
Location: STERLING, LOUDOUN County, VIRGINIA, 20166
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $34.0 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC for work described as: MI-17 OVERHAUL Key points: 1. Contract value of $34M for MI-17 overhaul services. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Contract duration of approximately 3.7 years, from late 2010 to mid-2014. 4. The contract type is Cost No Fee, which shifts risk to the contractor. 5. The North American Industry Classification System (NAICS) code 541710 indicates research and development services. 6. The contract was awarded as a Delivery Order, implying it's part of a larger contract vehicle.
Value Assessment
Rating: fair
Benchmarking the value of this specific MI-17 overhaul contract is challenging without detailed cost breakdowns or comparisons to similar overhaul projects. The Cost No Fee (CNF) contract type suggests that the contractor is incentivized to control costs, as their fee is fixed regardless of actual expenses. However, the absence of a fee makes direct price comparisons difficult. Further analysis would require understanding the scope of work and the specific components overhauled.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of 3 bids suggests a moderate level of competition for this specific delivery order. While three bidders participated, the depth of competition and the specific terms offered by each bidder are not detailed, making it difficult to definitively assess if the competition drove optimal pricing.
Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple vendors to offer competitive pricing, potentially leading to cost savings. The fact that three bids were received suggests that the government received at least some level of price discovery.
Public Impact
The primary beneficiaries are the Department of Defense (Army) through the maintenance and readiness of MI-17 helicopters. The services delivered include the overhaul of MI-17 aircraft, ensuring their operational capability. The geographic impact is likely within the operational theaters or maintenance facilities managed by the Department of the Army. Workforce implications may include specialized aviation mechanics, technicians, and support staff employed by the contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed cost breakdown makes value assessment difficult.
- Cost No Fee contract type can obscure true cost drivers if not carefully managed.
- Limited information on the specific scope of 'overhaul' for the MI-17.
- Competition level (3 bids) may not be sufficient for maximum price pressure on complex services.
Positive Signals
- Awarded under full and open competition, promoting a fair process.
- Cost No Fee contract structure incentivizes contractor cost control.
- Raytheon Technical Services Company LLC is a known entity in defense contracting.
- The contract addresses a critical need for aircraft readiness within the Department of Defense.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft maintenance and overhaul services. The market for military aircraft sustainment is substantial, with significant government spending dedicated to ensuring the readiness of its fleet. Comparable spending benchmarks would involve analyzing other contracts for similar aircraft types (e.g., other rotary-wing aircraft) or other major overhaul programs within the Department of Defense.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The prime contractor, Raytheon Technical Services Company LLC, would be responsible for its own subcontracting plan if applicable, but this contract itself does not mandate small business participation.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures would be tied to the performance work statement and the terms of the Cost No Fee contract. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Aircraft Maintenance Contracts
- Rotary-Wing Aircraft Sustainment Programs
- Research and Development in Aerospace Engineering
- Military Logistics and Support Services
Risk Flags
- Potential misalignment between NAICS code and service description.
- Lack of detailed cost data for value assessment.
- Moderate competition level may limit price optimization.
Tags
defense, department-of-defense, department-of-the-army, aircraft-overhaul, raytheon-technical-services-company-llc, cost-no-fee, full-and-open-competition, research-and-development, delivery-order, virginia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.0 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC. MI-17 OVERHAUL
Who is the contractor on this award?
The obligated recipient is RAYTHEON TECHNICAL SERVICES COMPANY LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $34.0 million.
What is the period of performance?
Start: 2010-09-30. End: 2014-05-31.
What is the specific scope of work covered by the 'MI-17 OVERHAUL' designation?
The designation 'MI-17 OVERHAUL' suggests a comprehensive refurbishment and maintenance process for the MI-17 helicopter. This typically involves disassembling the aircraft, inspecting all components for wear and tear, repairing or replacing parts that do not meet specifications, and reassembling the aircraft to airworthy standards. Specific tasks could include engine overhauls, airframe structural repairs, avionics upgrades or refurbishment, and system checks. Without the detailed Performance Work Statement (PWS), the exact scope remains general, but it implies a significant level of maintenance beyond routine servicing, aimed at restoring the aircraft to a condition similar to new or extending its operational life considerably.
How does the 'Cost No Fee' (CNF) contract type impact contractor incentives and government oversight?
A Cost No Fee (CNF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This structure places the entire financial risk on the contractor. The primary incentive for the contractor is to perform the work efficiently and within budget to avoid incurring unrecoverable costs. For the government, this means the contractor has a strong motivation to control expenses. However, it can also reduce the government's leverage in negotiating scope changes or demanding higher quality if the contractor is solely focused on minimizing their own out-of-pocket expenses. Robust government oversight is still crucial to ensure that costs incurred are reasonable, allocable, and allowable, and that the work meets the required standards.
What does the number of bids (3) suggest about the competition for this specific contract?
Receiving three bids for this MI-17 overhaul contract indicates a moderate level of competition. While it signifies that the contract was not awarded under a sole-source or limited competition scenario, it may not represent the most robust competition possible. In highly specialized markets or for unique services, three bidders might be considered good. However, for broader service categories, a higher number of bids often correlates with more aggressive pricing and better value for the government. The quality and competitiveness of the three bids are unknown without further data, but the number suggests that multiple firms were interested and capable of performing the work, providing some degree of price discovery for the Department of the Army.
What are the potential risks associated with a contract of this duration (1339 days)?
A contract duration of approximately 3.7 years (1339 days) for an aircraft overhaul program presents several potential risks. Firstly, there's the risk of cost escalation if the initial cost estimates do not account for inflation or unforeseen material price increases over the extended period, especially given the CNF structure. Secondly, technological advancements in aircraft maintenance or MI-17 components could occur during the contract period, potentially making the contracted overhaul methods or specifications outdated by the time the work is completed. Thirdly, contractor performance degradation over a long period is a risk; maintaining consistent quality and efficiency for nearly four years requires sustained management effort. Finally, changes in military requirements or budget priorities could impact the necessity or funding of the overhaul program mid-contract.
How does the NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences) align with an 'overhaul' contract?
The classification under NAICS code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' for an 'MI-17 OVERHAUL' contract appears somewhat unusual if the primary focus is purely on standard maintenance and refurbishment. Typically, overhaul services fall under maintenance, repair, and overhaul (MRO) categories, often associated with NAICS codes like 488190 (Other Support Activities for Air Transportation) or specific manufacturing/repair codes. However, R&D could be involved if the overhaul process includes significant engineering analysis, testing of new repair techniques, integration of experimental modifications, or development of improved components as part of the refurbishment. It's possible the contract encompasses R&D activities related to enhancing the MI-17's performance, longevity, or adapting it for new operational roles, justifying the R&D classification alongside the overhaul work.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W9113M06R0014
Offers Received: 3
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: Raytheon Company
Address: 12160 SUNRISE VALLEY DR, RESTON, VA, 20191
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $73,324,021
Exercised Options: $72,733,277
Current Obligation: $33,999,777
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W9113M07D0008
IDV Type: IDC
Timeline
Start Date: 2010-09-30
Current End Date: 2014-05-31
Potential End Date: 2014-05-31 00:00:00
Last Modified: 2022-09-30
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