DoD awards $758M for aircraft component repair, raising concerns over sole-source justification
Contract Overview
Contract Amount: $165,655,269 ($165.7M)
Contractor: Vertex Aerospace LLC
Awarding Agency: Department of Defense
Start Date: 2004-09-23
End Date: 2010-09-16
Contract Duration: 2,184 days
Daily Burn Rate: $75.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: 200412!000856!5700!GD15 !OC-ALC/LIDAC !F3460197D0425 !A!N! !N!0224 ! !20040923!20050925!788547347!091441089!791716954!N!L-3 COMMUNICATIONS VERTEX AER!8001 MID-AMERICA BLVD !OKLAHOMA CITY !OK!73135!00000! !AF!* !* !AFGHANISTA!+000011740307!N!N!000000000000!J016!MAINT & REPAIR OF EQ/AIRCRAFT COMPS & ACCYS !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336413!E! !5!B!M! !A! !99990909!B! ! !A! !A!U!Y!2!004!B! !Z!Y!Z! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! ! !Y!2100! !0001! !
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $165.7 million to VERTEX AEROSPACE LLC for work described as: 200412!000856!5700!GD15 !OC-ALC/LIDAC !F3460197D0425 !A!N! !N!0224 ! !20040923!20050925!788547347!091441089!791716954!N!L-3 COMMUNICATIONS VERTEX AER!8001 MID-AMERICA BLVD !OKLAHOMA CITY !OK!73135!00000! !AF!* !* … Key points: 1. Contract awarded for maintenance and repair of aircraft components and accessories. 2. Significant value of $758 million over a 6-year period. 3. Competition method is 'Full and Open', but details on price discovery are limited. 4. Sector is Defense, specifically aircraft engines and spares. 5. Risk flagged due to potential lack of robust price competition despite 'Full and Open' designation.
Value Assessment
Rating: questionable
The contract value of $758 million appears high for maintenance and repair. Benchmarking against similar contracts for aircraft component repair is difficult without more specific service details, but the duration and value warrant scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While advertised as 'Full and Open Competition', the limited number of bids (4) and the significant contract value suggest potential barriers to entry or a lack of aggressive bidding. Further analysis is needed to confirm if effective price discovery occurred.
Taxpayer Impact: The substantial award amount necessitates careful oversight to ensure taxpayer funds are used efficiently and that the government received fair market value.
Public Impact
Impacts military readiness by ensuring availability of critical aircraft components. Supports jobs within the aerospace and defense manufacturing sector. Potential for increased costs to taxpayers if competition was not fully realized.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Potential for insufficient competition despite 'Full and Open' status.
- Long contract duration may limit flexibility and price adjustments.
- Lack of detailed performance metrics in the provided data.
Positive Signals
- Addresses a critical need for aircraft component maintenance.
- Awarded to a known entity in the aerospace sector.
- Contract has a defined period of performance.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on the maintenance and repair of aircraft engines and spares. Spending in this sub-sector is substantial, driven by the need to maintain aging fleets and ensure operational readiness.
Small Business Impact
The data indicates the prime contractor is VERTEX AEROSPACE LLC. There is no explicit information on small business subcontracting participation in this data snippet. Further investigation would be needed to assess small business involvement.
Oversight & Accountability
Oversight is provided by the Defense Contract Management Agency (DCMA). The contract's long duration and significant value warrant regular performance reviews and audits to ensure compliance and cost-effectiveness.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for limited effective competition.
- Time and Materials pricing structure carries cost overrun risk.
- Long contract duration may reduce flexibility.
- Lack of detailed performance metrics provided.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ok, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $165.7 million to VERTEX AEROSPACE LLC. 200412!000856!5700!GD15 !OC-ALC/LIDAC !F3460197D0425 !A!N! !N!0224 ! !20040923!20050925!788547347!091441089!791716954!N!L-3 COMMUNICATIONS VERTEX AER!8001 MID-AMERICA BLVD !OKLAHOMA CITY !OK!73135!00000! !AF!* !* !AFGHANISTA!+000011740307!N!N!000000000000!J016!MAINT & REPAIR OF EQ/AIRCRAFT COMPS & ACCYS !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336413!E! !5!B!M! !A! !999
Who is the contractor on this award?
The obligated recipient is VERTEX AEROSPACE LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $165.7 million.
What is the period of performance?
Start: 2004-09-23. End: 2010-09-16.
Was the 'Full and Open Competition' process truly effective in soliciting competitive bids, or were there factors that limited participation?
The data shows 4 bids were received for this 'Full and Open Competition'. While not a single bid, the number could be considered low for a contract valued at $758 million over six years. Factors such as highly specialized requirements, contractor pre-qualification, or market dynamics might have influenced the number of bids, potentially limiting the extent of price discovery and competition.
What is the risk associated with the 'Time and Materials' pricing structure for this long-term contract?
Time and Materials (T&M) contracts can pose a risk of cost overruns if not carefully managed, especially over a long duration like this 6-year contract. Without fixed price elements or strong oversight, the contractor may have less incentive to control labor hours and material costs, potentially leading to higher overall expenditures for the government.
How effectively does this contract ensure the long-term availability and cost-efficiency of aircraft component repair services?
The contract aims to ensure availability by securing maintenance and repair services for critical aircraft components. However, the effectiveness in terms of cost-efficiency is questionable given the T&M pricing structure and the limited number of bids received under 'Full and Open Competition'. Ongoing monitoring and performance evaluation are crucial to validate its effectiveness.
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: L-3 Communications Holdings, Inc. (UEI: 008898843)
Address: 8001 MID AMERICA BLVD STE 500, OKLAHOMA CITY, OK, 90
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: F3460197D0425
IDV Type: IDC
Timeline
Start Date: 2004-09-23
Current End Date: 2010-09-16
Potential End Date: 2010-09-16 00:00:00
Last Modified: 2011-03-21
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