VSE Corporation awarded $47.77M contract for aircraft parts, with 65% of value potentially going to subcontractors
Contract Overview
Contract Amount: $47,768,000 ($47.8M)
Contractor: VSE Corporation
Awarding Agency: Department of Defense
Start Date: 2008-01-24
End Date: 2010-01-23
Contract Duration: 730 days
Daily Burn Rate: $65.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: CR 1901
Place of Performance
Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $47.8 million to VSE CORPORATION for work described as: CR 1901 Key points: 1. Contract value appears reasonable given the duration and scope of aircraft parts manufacturing. 2. Full and open competition suggests a healthy market for these services. 3. The contract's time and materials pricing structure introduces some cost risk. 4. Performance period spans two years, indicating a moderate-term need. 5. This contract falls within the broader aerospace and defense manufacturing sector. 6. A significant portion of the contract value may flow down to subcontractors.
Value Assessment
Rating: good
The contract value of $47.77 million over two years for aircraft parts manufacturing is within a reasonable range for similar defense contracts. Benchmarking against other contracts for specialized aircraft components suggests competitive pricing. The time and materials (T&M) pricing model, while offering flexibility, can sometimes lead to higher costs than fixed-price contracts if not managed closely. However, the absence of significant cost overruns in historical data for similar contracts suggests effective cost management by the agency.
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 environment is generally favorable for price discovery and ensuring the government receives competitive pricing. The fact that it was competed openly suggests a robust market for the required aircraft parts and services.
Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is expected to drive down costs and ensure the government obtains the best value for its investment in aircraft parts.
Public Impact
The Department of the Army is the primary beneficiary, receiving essential aircraft parts. This contract supports the maintenance and operational readiness of military aircraft. The geographic impact is primarily within the United States, where the contractor and potential subcontractors are located. It supports jobs in the aerospace manufacturing sector, including skilled labor for parts production and quality control.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials (T&M) pricing can lead to cost overruns if not closely monitored.
- Reliance on subcontractors may introduce supply chain risks.
- The specific nature of aircraft parts requires stringent quality control to ensure safety and performance.
Positive Signals
- Awarded through full and open competition, indicating a competitive market.
- VSE Corporation has a track record with government contracts.
- The contract duration of two years allows for stable planning and execution.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. This sector is characterized by high technical requirements, stringent quality standards, and significant government procurement. The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicates a specialized segment within this industry. Comparable spending benchmarks in this area are often tied to specific aircraft platforms and their maintenance cycles.
Small Business Impact
While this contract was not specifically set aside for small businesses, the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector often involves a complex supply chain. It is likely that VSE Corporation will engage small businesses as subcontractors to fulfill specialized requirements, contributing to the small business ecosystem. Further analysis would be needed to determine the extent of small business subcontracting.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Army program office. Accountability measures would include performance reviews, quality inspections, and adherence to contract terms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.
Related Government Programs
- Aircraft Component Manufacturing
- Defense Logistics Agency Contracts
- Aerospace Parts Procurement
- Military Aircraft Maintenance Support
Risk Flags
- Potential for cost overruns due to Time and Materials pricing.
- Supply chain risks associated with subcontracting.
- Quality control criticality for aircraft parts.
Tags
defense, department-of-the-army, aircraft-parts, manufacturing, time-and-materials, full-and-open-competition, vse-corporation, cr-1901, naics-336413, subcontracting-potential
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $47.8 million to VSE CORPORATION. CR 1901
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 $47.8 million.
What is the period of performance?
Start: 2008-01-24. End: 2010-01-23.
What is VSE Corporation's track record with similar Department of Defense contracts?
VSE Corporation has a substantial history of performing contracts for the Department of Defense, including those related to aircraft parts and maintenance. Their experience spans various branches of the military, and they have managed numerous time and materials contracts. While specific performance metrics for this exact contract are not detailed here, their long-standing presence in the defense sector suggests a level of established capability and familiarity with government procurement processes. Historical data from similar awards would provide a more granular view of their performance, including on-time delivery rates and quality compliance.
How does the $47.77 million contract value compare to market rates for similar aircraft parts?
Benchmarking the $47.77 million contract value requires a detailed understanding of the specific aircraft parts and auxiliary equipment being procured. However, considering the two-year duration and the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, the value appears to be within a reasonable range for specialized defense components. The time and materials pricing structure means the final cost is dependent on actual labor and material costs incurred, plus a negotiated fee. Without specific itemized lists or market surveys for these particular parts, a precise comparison to market rates is challenging, but the full and open competition suggests the government sought competitive pricing.
What are the primary risks associated with this time and materials contract?
The primary risk with this time and materials (T&M) contract is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts do not have a ceiling on the total amount spent, as costs are based on actual labor hours and material expenses. If the contractor's efficiency is low, or if material costs escalate unexpectedly, the total expenditure could exceed initial estimates. Effective oversight by the Department of the Army is crucial to mitigate this risk by closely monitoring labor hours, material requisitions, and ensuring that all costs are reasonable and allocable to the contract.
What is the expected program effectiveness and impact of these aircraft parts?
The expected program effectiveness hinges on the timely delivery of high-quality aircraft parts that meet stringent military specifications. These parts are critical for maintaining the operational readiness and safety of military aircraft. Successful contract performance will ensure that aircraft can be repaired and kept in service, directly supporting the Department of the Army's mission capabilities. The impact is measured in terms of reduced aircraft downtime, enhanced mission success rates, and overall force projection capabilities. Failure to deliver quality parts on time could lead to significant operational disruptions.
How does historical spending on similar aircraft parts contracts compare to this award?
Historical spending on similar aircraft parts contracts within the Department of Defense can vary significantly based on the specific aircraft platforms, the complexity of the parts, and the duration of the contracts. The $47.77 million award over two years for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' suggests a moderate level of spending for this category. To provide a precise comparison, one would need to analyze spending trends for the specific NAICS code (336413) and potentially filter by agency and contract type. However, the full and open competition indicates that this award was made in a market where previous spending levels have likely informed current pricing expectations.
What are the implications of the 65% subcontracting potential for taxpayers?
The potential for 65% of the contract value to be subcontracted has several implications for taxpayers. On one hand, it can foster competition among smaller suppliers and potentially lead to innovation and specialized expertise. It also allows the prime contractor, VSE Corporation, to leverage the capabilities of other firms. On the other hand, each layer of subcontracting can add administrative overhead and potentially increase the overall cost passed on to the government. Taxpayers benefit most when the subcontracting process is efficient, competitive, and results in high-quality parts at reasonable prices, with strong oversight to prevent cost inflation through the supply chain.
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: 1
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: $47,768,000
Exercised Options: $47,768,000
Current Obligation: $47,768,000
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAB0703DB012
IDV Type: IDC
Timeline
Start Date: 2008-01-24
Current End Date: 2010-01-23
Potential End Date: 2010-01-23 00:00:00
Last Modified: 2015-06-09
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