DoD's $73.9M aircraft structural component repair contract awarded to Lear Siegler Services, Inc. shows potential value concerns

Contract Overview

Contract Amount: $73,947,877 ($73.9M)

Contractor: URS Federal Services Inc.

Awarding Agency: Department of Defense

Start Date: 2006-09-15

End Date: 2010-09-15

Contract Duration: 1,461 days

Daily Burn Rate: $50.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200612!001543!5700!FA8108!OC-ALC/LAD CFT !F3460197D0423 !A!N! !N!0170 ! !20060915!20070914!020205527!073871048!043271568!N!LEAR SIEGLER SERVICES, INC !3100 N I 35 SERVICE RD !OKLAHOMA CITY !OK!73111!26759!045!36!FORT DRUM !JEFFERSON !NEW YORK !+000024678511!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !336413!E! !5!B!M! !A! !99990909!B! ! !A! !A!U!Y!2!004!B! !C!Y!Z! ! !N!C!N! ! ! !C!A!A!A!000!A!C!N! ! ! ! !2100! !0001! !

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73110

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $73.9 million to URS FEDERAL SERVICES INC. for work described as: 200612!001543!5700!FA8108!OC-ALC/LAD CFT !F3460197D0423 !A!N! !N!0170 ! !20060915!20070914!020205527!073871048!043271568!N!LEAR SIEGLER SERVICES, INC !3100 N I 35 SERVICE RD !OKLAHOMA CITY !OK!73111!26759!045!36!FORT DRUM !JEFF… Key points: 1. The contract's Time and Materials pricing structure may not incentivize cost efficiency. 2. Limited competition, with only four bidders, could have led to suboptimal pricing. 3. The contract's duration and value raise questions about long-term cost-effectiveness. 4. Performance context is limited, making it difficult to assess the value delivered. 5. This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft maintenance. 6. The lack of a small business set-aside suggests a focus on larger, established contractors.

Value Assessment

Rating: fair

The contract's total value of $73.9 million over four years, with a Time and Materials (T&M) pricing structure, warrants scrutiny. T&M contracts can sometimes lead to higher costs if not closely managed, as they may not inherently drive contractor efficiency. Benchmarking against similar contracts for aircraft structural component repair is challenging without more detailed service descriptions and performance data. However, the significant value suggests a substantial need for these services within the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bids received. While this indicates an attempt at broad solicitation, the relatively low number of bidders for a contract of this magnitude could suggest barriers to entry for smaller firms or a concentrated market for these specialized services. The competition level provides some price discovery but may not represent the most competitive scenario possible.

Taxpayer Impact: A full and open competition with a limited number of bidders means taxpayers may not have received the absolute lowest possible price, though competition did occur.

Public Impact

The primary beneficiaries are the U.S. Air Force units requiring maintenance and repair of aircraft structural components. Services delivered include the maintenance and repair of aircraft structural components, ensuring fleet readiness. The geographic impact is primarily centered around military installations where aircraft are stationed, with a specific mention of Fort Drum, New York. Workforce implications include employment for skilled technicians and support staff involved in aircraft repair.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials pricing structure may lead to cost overruns if not managed tightly.
Limited number of bidders (4) suggests potential for less competitive pricing.
Contract duration of 4 years is substantial, increasing exposure to potential inefficiencies.
Lack of specific performance metrics makes value assessment difficult.
Contract awarded to a single entity (Lear Siegler Services, Inc.) limits broader market engagement.

Positive Signals

Awarded under full and open competition, allowing for broad market participation.
Contract addresses a critical need for aircraft structural component repair, ensuring operational readiness.
The contractor, Lear Siegler Services, Inc., has a track record in defense contracting.
Specific location of service delivery (Fort Drum, NY) indicates direct support to military operations.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the maintenance, repair, and overhaul (MRO) of aircraft components. The market for aircraft MRO is substantial, driven by the need to maintain aging fleets and ensure operational readiness. Spending in this area is critical for national security and involves specialized technical expertise. Comparable spending benchmarks would typically be found within other large MRO contracts for military aircraft.

Small Business Impact

The contract does not appear to have a specific small business set-aside. The award to Lear Siegler Services, Inc., a significant defense contractor, suggests that the primary focus was on capability and capacity rather than small business participation. There is no explicit information regarding subcontracting plans for small businesses, which could represent a missed opportunity to engage the small business ecosystem in this defense spending.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the contract terms, including delivery schedules and quality standards. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance and Repair Services
Defense Logistics Agency Contracts
Air Force Readiness and Sustainment Programs
Aviation Component Manufacturing and Repair

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Limited competition may result in suboptimal pricing.
Lack of detailed performance metrics hinders value assessment.
Safety-critical nature of aircraft structural components requires high quality assurance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.9 million to URS FEDERAL SERVICES INC.. 200612!001543!5700!FA8108!OC-ALC/LAD CFT !F3460197D0423 !A!N! !N!0170 ! !20060915!20070914!020205527!073871048!043271568!N!LEAR SIEGLER SERVICES, INC !3100 N I 35 SERVICE RD !OKLAHOMA CITY !OK!73111!26759!045!36!FORT DRUM !JEFFERSON !NEW YORK !+000024678511!N!N!000000000000!J015!MAINT & REPAIR OF EQ/AIRCRAFT STRUCTURAL COMPS !A1A!AIRFRAMES AND SPARES !000 !NOT DISCERNABLE !336413!E! !5!B!M! !A! !999

Who is the contractor on this award?

The obligated recipient is URS FEDERAL SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $73.9 million.

What is the period of performance?

Start: 2006-09-15. End: 2010-09-15.

What is the track record of Lear Siegler Services, Inc. in fulfilling similar defense contracts?

Lear Siegler Services, Inc. (now part of AAR Corporation) has a significant history of performing maintenance, repair, and overhaul (MRO) services for various U.S. military branches. Their experience spans a wide range of aircraft platforms and components, including structural repairs. Analyzing their past performance on similar Time and Materials contracts would be crucial to assess their reliability and cost control capabilities. Publicly available data often highlights contract awards and sometimes contract terminations or disputes, but detailed performance metrics are less common. A deeper dive into contract close-out data and any reported performance issues or commendations would provide a more comprehensive view of their track record.

How does the pricing structure of this contract compare to industry standards for aircraft structural repair?

The Time and Materials (T&M) pricing structure used for this contract is common in maintenance and repair scenarios where the scope of work can be unpredictable. However, it is often viewed critically from a value-for-money perspective compared to fixed-price contracts, as it can incentivize longer labor hours. Industry standards for aircraft structural repair often involve a mix of T&M for unforeseen issues and firm-fixed-price for well-defined tasks. Benchmarking requires comparing the effective hourly rates and material markups against market data for similar skill sets and parts. Without specific rates and detailed service breakdowns, a precise comparison is difficult, but the T&M nature itself suggests a higher potential for cost escalation than a fixed-price approach.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. Typically, for aircraft maintenance and repair contracts, KPIs would include metrics such as on-time delivery of repaired components, quality of repair (e.g., defect rate, rework required), turnaround time (TAT) for repairs, and adherence to budget. For a Time and Materials contract, tracking labor hours and material costs against estimated or ceiling values would also be critical. The absence of readily available KPIs in public contract databases makes it challenging to independently assess the contractor's performance and the overall success of the contract in meeting its objectives.

What is the historical spending trend for aircraft structural component repair within the Department of Defense?

Historical spending on aircraft structural component repair within the Department of Defense (DoD) has been substantial and consistent, reflecting the continuous need to maintain a large and aging military aviation fleet. While specific figures for 'aircraft structural component repair' can vary based on categorization, the overall MRO (Maintenance, Repair, and Overhaul) spending for aviation is in the tens of billions of dollars annually. Trends are influenced by factors such as the tempo of operations, aircraft modernization programs, and budget allocations. Periods of high operational tempo often lead to increased demand for repair services. Analyzing historical spending patterns requires examining aggregate data across various service branches and contract types over several fiscal years.

Are there any identified risks associated with the contractor's performance or the nature of the services provided?

Risks associated with this contract can be categorized. From a performance perspective, the primary risk lies in the Time and Materials pricing structure, which can lead to cost overruns if not rigorously managed and monitored. Contractor performance risks include potential delays in repair turnaround times, quality issues leading to rework or premature failures, and inadequate inventory management for parts. The nature of aircraft structural repair involves safety-critical components, meaning any lapse in quality could have severe operational consequences. Furthermore, reliance on a single contractor for a significant duration introduces program risk if the contractor faces financial instability or strategic shifts.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM Global II, LLC (UEI: 043271568)

Address: 175 ADMIRAL COCHRANE DR, ANNAPOLIS, MD, 03

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F3460197D0423

IDV Type: IDC

Timeline