DoD's $242M contract for aircraft components awarded to Vertex Aerospace LLC shows fair competition and potential value

Contract Overview

Contract Amount: $24,201,926 ($24.2M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2004-10-25

End Date: 2005-10-30

Contract Duration: 370 days

Daily Burn Rate: $65.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200505!000061!5700!FA8108!OC-ALC/LAD CFT !F3460197D0425 !A!N! !N!0238 ! !20041025!20051030!788547347!091441089!008898843!N!L-3 COMMUNICATIONS AEROSPACE L!8001 MID AMERICA BLVD STE !OKLAHOMA CITY !OK!73135!24000!141!48!EL PASO !EL PASO !TEXAS !+000019260000!N!N!000000000000!K016!MODIFICATION OF EQ/AIRCRAFT COMPS & ACCYS !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336413!E! !5!B!M! !A! !20200930!B! ! !A! !A!U!Y!2!004!B! !C!Y!Z! ! !N!C!N! ! ! !C!A!A!A!000!A!C!N! ! ! !Y!2100! !0001! !

Place of Performance

Location: EL PASO, EL PASO County, TEXAS, 79910

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $24.2 million to VERTEX AEROSPACE LLC for work described as: 200505!000061!5700!FA8108!OC-ALC/LAD CFT !F3460197D0425 !A!N! !N!0238 ! !20041025!20051030!788547347!091441089!008898843!N!L-3 COMMUNICATIONS AEROSPACE L!8001 MID AMERICA BLVD STE !OKLAHOMA CITY !OK!73135!24000!141!48!EL PASO !EL P… Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. Vertex Aerospace LLC, the contractor, has a track record that warrants further investigation for performance. 3. The contract's duration and value indicate a significant commitment by the Department of Defense. 4. The specific nature of aircraft components and accessories suggests a specialized market segment. 5. Geographic location of the contractor in Oklahoma City, Texas, may have local economic implications.

Value Assessment

Rating: fair

The total award amount of $242,019,264.44 for aircraft components and accessories appears substantial. Benchmarking this against similar contracts for specialized aircraft parts is crucial for a definitive value assessment. Given the 'time and materials' pricing structure, the final cost could fluctuate, necessitating close monitoring of labor hours and material costs to ensure cost-effectiveness. Without direct comparisons to similar sole-source or competitively bid contracts for identical or highly similar components, it is difficult to definitively state if this represents excellent or questionable value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' solicitation, indicating that all responsible sources were permitted to submit offers. The presence of 4 bidders suggests a reasonable level of competition for this specialized requirement. A higher number of bidders typically leads to more aggressive pricing and innovation, but 4 bidders in a niche market like aircraft components can still yield competitive results.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple companies to vie for the contract, potentially driving down costs and improving the quality of goods or services received.

Public Impact

The primary beneficiaries are likely entities within the Department of Defense requiring specialized aircraft components and accessories for maintenance, repair, and operations. The contract delivers essential parts and accessories for aircraft, ensuring operational readiness and safety. The geographic impact is primarily centered around the contractor's location in Oklahoma City, Oklahoma, and potentially extends to its supply chain partners. Workforce implications include employment opportunities at Vertex Aerospace LLC and its subcontractors, particularly in specialized manufacturing and logistics roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the 'time and materials' pricing model if not closely managed.
Dependence on a single contractor for a critical supply of aircraft components could pose a risk if performance issues arise.
The specialized nature of the components might limit the pool of qualified alternative suppliers in the future.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contract specifies a clear scope for modification of equipment and aircraft components.
The contractor, Vertex Aerospace LLC, is established in the aerospace sector.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a specialized segment of the broader aerospace industry. This sector is characterized by high technical requirements, stringent quality control, and often long production lead times. The market size for aircraft components is substantial, driven by both military and commercial aviation needs. This specific contract represents a significant portion of spending within this niche, supporting the operational readiness of Air Force assets.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and the prime contractor, Vertex Aerospace LLC, is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Further analysis would be needed to determine if small business participation is mandated or encouraged through subcontracting opportunities, which could impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Air Force's contracting and program management offices. The Inspector General's office for the Department of Defense would have jurisdiction for investigating fraud, waste, and abuse. Transparency is facilitated through contract award databases like FPDS, but detailed performance metrics and ongoing oversight activities are not publicly available in this dataset.

Related Government Programs

Aircraft Component Procurement
Aerospace Manufacturing Contracts
Defense Logistics Support
Air Force Maintenance, Repair, and Overhaul (MRO)
Specialized Equipment Modification

Risk Flags

Potential cost overruns due to Time and Materials pricing.
Contractor performance risk for specialized components.
Limited competition data available for definitive value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.2 million to VERTEX AEROSPACE LLC. 200505!000061!5700!FA8108!OC-ALC/LAD CFT !F3460197D0425 !A!N! !N!0238 ! !20041025!20051030!788547347!091441089!008898843!N!L-3 COMMUNICATIONS AEROSPACE L!8001 MID AMERICA BLVD STE !OKLAHOMA CITY !OK!73135!24000!141!48!EL PASO !EL PASO !TEXAS !+000019260000!N!N!000000000000!K016!MODIFICATION OF EQ/AIRCRAFT COMPS & ACCYS !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336413!E! !5!B!M! !A! !202

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $24.2 million.

What is the period of performance?

Start: 2004-10-25. End: 2005-10-30.

What is Vertex Aerospace LLC's track record with similar Department of Defense contracts?

Vertex Aerospace LLC has a history of receiving contracts from the Department of Defense, primarily in the aerospace and defense sector. While the provided data for this specific contract (FA810820D0023) is limited, a broader search of federal procurement databases would reveal their performance on other awards. Key areas to investigate would include on-time delivery rates, quality of products/services, past performance reviews, and any history of contract disputes or terminations. Understanding their experience with similar aircraft components and modification work is crucial for assessing their capability to fulfill this current award effectively. Their presence in the Oklahoma City area, a hub for aerospace activities, suggests established infrastructure and expertise.

How does the $242 million award compare to historical spending on similar aircraft components by the Air Force?

The $242 million award represents a significant investment in aircraft components and accessories. To benchmark this effectively, one would need to analyze historical spending patterns for similar categories (e.g., 'Aircraft Engines and Spares' or 'Other Aircraft Parts and Auxiliary Equipment Manufacturing') by the Department of the Air Force over several fiscal years. This would involve identifying comparable contracts, noting their award values, contract types (fixed-price, time and materials), and competition levels. A comparison would reveal whether this award is an outlier, consistent with trends, or indicative of increased demand or pricing shifts within the sector. Without access to that historical data, it's challenging to provide a precise comparison.

What are the primary risks associated with a 'Time and Materials' contract for aircraft components?

Time and Materials (T&M) contracts, like the one awarded to Vertex Aerospace LLC, carry inherent risks, primarily concerning cost control. The government agrees to pay the contractor for the actual cost of direct labor (at specified hourly rates) and materials, plus a fee or profit. The main risk for the government is the potential for cost overruns if labor hours are not efficiently managed or if material costs escalate unexpectedly. Unlike fixed-price contracts, the total cost is not predetermined. Effective oversight, detailed record-keeping by the contractor, and robust auditing by the government are essential to mitigate these risks and ensure fair pricing. For specialized aircraft components, the unpredictability of repair or modification needs can further complicate cost estimation under a T&M structure.

What is the significance of the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' Product Service Code (PSC)?

The Product Service Code (PSC) '336413' signifies 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This classification indicates that the contract is for the production or modification of components and accessories that are not specifically covered under other, more narrowly defined PSCs related to aircraft engines, airframes, or avionics. It suggests a broad scope within the aircraft parts manufacturing domain, potentially encompassing a wide array of items such as landing gear components, control surfaces, internal systems parts, or specialized auxiliary equipment. This PSC highlights the specialized nature of the contract and the need for manufacturers with specific capabilities in this area.

How does the geographic location of the contractor (Oklahoma City, OK) impact this contract?

The contractor, Vertex Aerospace LLC, is located in Oklahoma City, Oklahoma. This location is significant as Oklahoma City is a major hub for the aerospace and defense industry, often referred to as 'Aerospace Alley.' This proximity to a skilled workforce, established supply chains, and other aerospace companies can be advantageous for contract performance, potentially leading to faster turnaround times, easier access to specialized resources, and reduced logistical complexities. It also implies that the economic benefits of this contract, such as job creation and local spending, will be concentrated in the Oklahoma City region and the state of Texas (where the contractor's address is listed as having a presence).

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION 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: YES

Parent Contract

Parent Award PIID: F3460197D0425

IDV Type: IDC

Timeline