VSE Corporation awarded $91.2M contract for aircraft parts, highlighting potential value concerns
Contract Overview
Contract Amount: $91,241,628 ($91.2M)
Contractor: VSE Corporation
Awarding Agency: Department of Defense
Start Date: 2007-11-09
End Date: 2016-07-20
Contract Duration: 3,176 days
Daily Burn Rate: $28.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: CR 1947
Place of Performance
Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $91.2 million to VSE CORPORATION for work described as: CR 1947 Key points: 1. Contract awarded via full and open competition, suggesting a competitive pricing environment. 2. The contract type is Time and Materials, which can pose risks for cost overruns if not managed closely. 3. Performance period spans nearly 9 years, indicating a long-term need for these aircraft parts. 4. The North American Industry Classification System (NAICS) code 336413 points to specialized aircraft parts manufacturing. 5. The contract was awarded by the Department of the Army, a significant defense spender. 6. The contract was awarded as a Delivery Order, suggesting it's part of a larger indefinite-delivery contract.
Value Assessment
Rating: fair
Benchmarking the value of this Time and Materials contract is challenging without detailed labor rates and material markups. The significant duration and total value suggest a substantial need, but the T&M structure inherently carries a higher risk of exceeding initial cost estimates compared to fixed-price contracts. Further analysis of the specific services and materials procured would be necessary to definitively assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally expected to drive down prices and ensure fair market value. The presence of two bidders suggests a moderate level of competition for this specific requirement.
Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the best possible price for the required aircraft parts and services.
Public Impact
The Department of the Army benefits from the reliable supply of critical aircraft parts, ensuring operational readiness. This contract supports the maintenance and operational needs of Army aviation assets. The geographic impact is likely concentrated around Army aviation facilities and maintenance depots. The contract supports jobs within the aerospace manufacturing and support sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials contract type increases risk of cost escalation without strict oversight.
- Long contract duration (nearly 9 years) requires sustained vigilance to ensure continued value.
- Lack of specific performance metrics in the provided data makes assessing effectiveness difficult.
Positive Signals
- Awarded through full and open competition, indicating a robust bidding process.
- Contract supports critical defense needs for the Department of the Army.
- VSE Corporation has a track record as a government contractor.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The NAICS code 336413 represents establishments primarily engaged in manufacturing aircraft parts and auxiliary equipment. Spending in this sector is substantial, driven by military readiness and modernization programs. Comparable spending benchmarks would involve analyzing other large-scale contracts for aircraft component manufacturing and support services awarded by the Department of Defense.
Small Business Impact
The provided data indicates that small business participation (ss and sb fields) was not a specific set-aside for this contract. Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside requirement. However, VSE Corporation, as a prime contractor, may engage small businesses as subcontractors, contributing indirectly to their ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA). The Time and Materials (T&M) nature of the contract necessitates close monitoring of labor hours, material costs, and adherence to the contract's ceiling. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance details may be less public.
Related Government Programs
- Department of Defense Aircraft Parts Procurement
- Army Aviation Maintenance Contracts
- Aerospace Manufacturing Support Services
- Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts
Risk Flags
- Time and Materials contract type
- Long contract duration
- Potential for cost overruns
Tags
defense, department-of-defense, department-of-the-army, aircraft-parts, manufacturing, time-and-materials, full-and-open-competition, delivery-order, maryland, vse-corporation
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $91.2 million to VSE CORPORATION. CR 1947
Who is the contractor on this award?
The obligated recipient is VSE CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $91.2 million.
What is the period of performance?
Start: 2007-11-09. End: 2016-07-20.
What is VSE Corporation's track record with the Department of Defense?
VSE Corporation has a significant history of contracting with the Department of Defense across various agencies and branches. Their portfolio includes a wide range of services and supplies, often related to logistics, maintenance, and technical support for military platforms. Analyzing their past performance, including any past performance issues or awards, would provide further context on their reliability and capability in fulfilling defense contracts. Their extensive experience suggests a familiarity with government procurement processes and requirements, which is generally a positive indicator for contract execution.
How does the Time and Materials (T&M) pricing structure compare to other contract types for similar services?
Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or when the duration of the effort is uncertain. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fee or profit. This structure offers flexibility but carries a higher risk of cost overruns for the government if not managed diligently. Compared to firm-fixed-price contracts, T&M generally provides less cost certainty. However, for certain types of services, like repairs or unforeseen maintenance, T&M can be more appropriate than fixed-price if the scope is inherently variable.
What are the potential risks associated with a nearly 9-year contract duration?
A contract duration of nearly 9 years presents several potential risks. Firstly, the risk of scope creep or evolving requirements increases over such a long period. Secondly, maintaining consistent quality and performance from the contractor over an extended duration can be challenging. Thirdly, market conditions, material costs, and technological advancements can change significantly, potentially making the contract terms less favorable or outdated. Finally, long-term contracts require sustained oversight and contract management to ensure continued value and compliance, which can strain government resources.
What does the 'MD' contract status code signify?
The 'MD' contract status code typically signifies 'Modified' or 'Modified Contract'. This indicates that the contract has undergone changes or amendments since its initial award. These modifications could relate to changes in scope, delivery schedules, pricing, or other terms and conditions. Understanding the nature and frequency of these modifications is crucial for assessing the contract's evolution and potential impacts on its overall cost and performance.
How does the procurement of 'Other Aircraft Parts' differ from more standardized components?
Procuring 'Other Aircraft Parts' under NAICS code 336413 suggests a focus on specialized, non-standardized, or auxiliary components rather than mass-produced, common parts. This can imply a need for custom manufacturing, unique specifications, or parts for specific aircraft models that are not widely available. Such procurements often involve higher unit costs due to lower production volumes, specialized tooling, and potentially more complex quality assurance processes. The sourcing and manufacturing capabilities required for these parts are typically more niche.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 2550 HUNTINGTON AVE, ALEXANDRIA, VA, 22303
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $91,241,628
Exercised Options: $91,241,628
Current Obligation: $91,241,628
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAB0703DB012
IDV Type: IDC
Timeline
Start Date: 2007-11-09
Current End Date: 2016-07-20
Potential End Date: 2016-07-20 00:00:00
Last Modified: 2016-10-04
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