VSE Corporation awarded $13.7M contract for aircraft parts, highlighting potential value-for-money concerns

Contract Overview

Contract Amount: $13,679,308 ($13.7M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2008-05-06

End Date: 2010-05-05

Contract Duration: 729 days

Daily Burn Rate: $18.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: CR 2165

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $13.7 million to VSE CORPORATION for work described as: CR 2165 Key points: 1. The contract's time-and-materials pricing structure may lead to cost overruns if not closely managed. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The contract duration of 729 days (2 years) is moderate for this type of procurement. 4. The specific aircraft parts are not detailed, making direct performance benchmarking difficult. 5. The award was a delivery order under a larger contract, indicating a phased approach to acquisition. 6. The contractor, VSE Corporation, has a history of government contracts, requiring review of past performance.

Value Assessment

Rating: fair

The contract was awarded using a time-and-materials (T&M) pricing mechanism. While T&M can offer flexibility, it carries inherent risks of cost escalation if not rigorously monitored. Without specific details on the parts or labor rates, a direct comparison to similar contracts is challenging. However, the total value of $13.7 million over two years suggests a moderate-sized procurement. Benchmarking the value would require detailed cost breakdowns and comparison with industry standards for aircraft parts and associated labor.

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 only one bid (no=1) is a significant point of concern, as it suggests limited actual competition despite the broad solicitation. This could imply that the market for these specific aircraft parts is narrow, or that other potential bidders chose not to participate, potentially impacting price discovery and the government's ability to secure the best possible pricing.

Taxpayer Impact: A single bid in a full and open competition raises concerns about whether taxpayers received the most competitive pricing. The lack of multiple offers may have resulted in a higher price than could have been achieved with more robust competition.

Public Impact

The primary beneficiaries are likely entities within the Department of Defense requiring specific aircraft parts. The services delivered involve the provision of 'Other Aircraft Parts and Auxiliary Equipment'. The geographic impact is primarily tied to the operational locations of the supported aircraft, likely within the United States. Workforce implications could include roles in logistics, procurement, and potentially maintenance or repair personnel who utilize these parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (1 bid) despite full and open solicitation raises concerns about price competitiveness.
Time-and-materials pricing structure introduces risk of cost overruns without stringent oversight.
Lack of specific details on the aircraft parts makes independent value assessment difficult.

Positive Signals

Awarded under full and open competition, adhering to principles of broad market access.
Contract awarded to VSE Corporation, a known entity in government contracting, potentially indicating established processes.
The contract addresses a specific need for aircraft parts, crucial for operational readiness.

Sector Analysis

The aerospace and defense sector is characterized by complex supply chains and specialized manufacturing. This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category (NAICS 336413). The market for such components can be highly specialized, with a limited number of manufacturers capable of meeting stringent military specifications. Spending in this area is critical for maintaining aircraft fleets, and contracts are often awarded through competitive processes, though specialized needs can sometimes lead to fewer bidders.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' (small business) flag is false. There is no explicit mention of small business set-asides or subcontracting requirements in the provided data. This suggests that the prime contractor, VSE Corporation, is likely a large business, and the contract may not have been specifically structured to promote small business involvement, potentially limiting subcontracting opportunities for smaller firms in this instance.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and program management offices. Accountability measures would be embedded in the contract terms, including performance standards and delivery schedules. Transparency is generally facilitated through contract databases like FPDS-NG, where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Aircraft Maintenance and Repair Services
Aerospace Component Manufacturing
Defense Logistics Support
Military Aircraft Parts Procurement

Risk Flags

Limited Competition
Time and Materials Pricing
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.7 million to VSE CORPORATION. CR 2165

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 $13.7 million.

What is the period of performance?

Start: 2008-05-06. End: 2010-05-05.

What is the track record of VSE Corporation with Department of Defense contracts, particularly for aircraft parts?

VSE Corporation is a well-established government contractor with a significant history of serving the Department of Defense and other federal agencies. Their portfolio often includes logistics, engineering, and technical services, frequently supporting aviation and maritime platforms. For aircraft parts specifically, VSE has engaged in numerous contracts involving supply, maintenance, and overhaul of various aircraft components. A detailed review of their past performance on similar contracts would be necessary to assess their reliability, quality of delivery, and adherence to cost and schedule requirements. Past performance evaluations and any documented issues or commendations would provide crucial context for understanding the risk associated with this specific award.

How does the $13.7 million value compare to typical spending on 'Other Aircraft Parts and Auxiliary Equipment'?

The $13.7 million award value for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' over a two-year period is a moderate figure within the broader defense procurement landscape. Annual spending on aircraft parts can range from millions to billions of dollars, depending on the specific aircraft platforms, their age, operational tempo, and the complexity of the required components. This contract's value suggests it is likely for a specific set of parts for a particular aircraft type or fleet, rather than a comprehensive overhaul or a broad category of general parts. Benchmarking this against similar contracts for comparable aircraft systems or part categories would be essential for a precise value-for-money assessment. Without more granular data on the specific parts and their criticality, it's difficult to definitively state if this represents high or low spending relative to the market.

What are the primary risks associated with a time-and-materials (T&M) contract for aircraft parts?

The primary risk with a Time and Materials (T&M) contract, such as this one, is the potential for cost escalation. 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. If the contractor's labor hours are not efficiently managed, or if material costs increase unexpectedly, the total contract cost can exceed initial estimates. For aircraft parts, this could manifest as extended labor hours for assembly, testing, or installation, or unforeseen increases in the cost of raw materials or specialized components. Effective oversight, including detailed tracking of labor hours, material receipts, and robust negotiation of labor rates, is crucial to mitigate these risks and ensure fair pricing for the government.

What does the single bid in a 'full and open competition' imply about the market for these aircraft parts?

A single bid submitted under a 'full and open competition' solicitation is a significant indicator that the actual market competition for these specific aircraft parts may be limited. This could stem from several factors: the specialized nature of the parts, requiring unique manufacturing capabilities or certifications; a small number of qualified manufacturers; high barriers to entry (e.g., proprietary technology, extensive testing requirements); or potentially, that the solicitation's terms or anticipated value were not attractive enough for multiple companies to bid. For taxpayers, this situation raises concerns about price discovery, as the government lacks the benefit of competitive pressure to drive down costs. It necessitates careful review of the bid price to ensure it is reasonable and reflects fair market value, potentially requiring more in-depth cost analysis by the procuring agency.

How does the contract's duration (729 days) align with typical procurement cycles for aircraft components?

A contract duration of 729 days, approximately two years, is a moderate timeframe for the procurement of specialized aircraft parts. The lead time for manufacturing complex components, especially those requiring specific certifications or undergoing rigorous testing, can be substantial. A two-year period allows for production, quality assurance, and delivery, while also providing some flexibility for potential adjustments. Shorter durations might be feasible for readily available parts, whereas longer durations could be associated with large-scale production runs, integration into larger platforms, or long-term support agreements. This duration appears reasonable for ensuring a steady supply of necessary components without locking the government into an excessively long commitment, assuming the demand remains consistent.

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: $13,679,308

Exercised Options: $13,679,308

Current Obligation: $13,679,308

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAB0703DB012

IDV Type: IDC

Timeline