DoD's $605M contract for aircraft parts manufacturing awarded to Vertex Aerospace LLC

Contract Overview

Contract Amount: $60,543,680 ($60.5M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2005-08-19

End Date: 2010-10-01

Contract Duration: 1,869 days

Daily Burn Rate: $32.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200511!001108!5700!FA8108!OC-ALC/LAD CFT !F3460197D0425 !A!N! !N!0260 ! !20050819!20060819!788547347!091441089!008898843!N!L-3 COMMUNICATIONS AEROSPACE L!8001 MID AMERICA BLVD STE !OKLAHOMA CITY !OK!73135!26736!027!48!FORT HOOD !BELL !TEXAS !+000017819758!N!N!000000000000!J023!MAINT & REPAIR OF EQ/VEHICLES-TRAILERS-CYCLES !A4A!COMBAT VEHICLES !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: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $60.5 million to VERTEX AEROSPACE LLC for work described as: 200511!001108!5700!FA8108!OC-ALC/LAD CFT !F3460197D0425 !A!N! !N!0260 ! !20050819!20060819!788547347!091441089!008898843!N!L-3 COMMUNICATIONS AEROSPACE L!8001 MID AMERICA BLVD STE !OKLAHOMA CITY !OK!73135!26736!027!48!FORT HOOD !BELL… Key points: 1. Contract value of $605M over 1869 days indicates significant investment in aircraft parts. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. The contract's duration and value present potential long-term reliance on the contractor. 4. Performance context is tied to 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. 5. Sector positioning within Defense highlights critical national security supply chain needs. 6. The contract is a Time and Materials type, which can pose cost control challenges.

Value Assessment

Rating: fair

The total award amount of $605,436,799.94 over 1869 days suggests a substantial investment. Benchmarking this against similar contracts for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' is difficult without more specific data on the exact components and services. However, the Time and Materials pricing structure, while flexible, can lead to cost overruns if not closely managed, raising questions about optimal value for money compared to fixed-price contracts for well-defined scopes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of four bids (no) suggests a competitive environment, which generally benefits price discovery and can lead to more favorable terms for the government. The specific number of bidders is a positive indicator of market interest and potential for competitive pricing.

Taxpayer Impact: A competitive award process like this one helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The primary beneficiaries are likely components of the Department of Defense requiring specialized aircraft parts and maintenance. Services delivered include the manufacturing and supply of 'Other Aircraft Parts and Auxiliary Equipment'. The geographic impact is centered around Oklahoma City, Oklahoma, where Vertex Aerospace LLC is located. Workforce implications may include job creation and sustainment within the aerospace manufacturing sector in Oklahoma.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost escalation if not managed rigorously.
The long duration of the contract (1869 days) may reduce flexibility for future technological advancements or alternative suppliers.
Lack of specific details on the 'Other Aircraft Parts' makes it hard to assess true value for money.
Potential for contractor lock-in due to the scale and duration of the award.

Positive Signals

Awarded through full and open competition, indicating a healthy bidding environment.
The contractor, Vertex Aerospace LLC, is based in Oklahoma, potentially supporting regional economic development.
The contract supports critical defense needs for aircraft parts and equipment.
The contract value suggests a significant level of trust and capability from the awarded contractor.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' subsector, which is a critical component of the broader aerospace and defense industry. The aerospace manufacturing market is characterized by high technological barriers, stringent quality requirements, and significant government procurement. Spending in this sector is often driven by defense modernization, maintenance, and operational readiness needs. Comparable spending benchmarks would typically involve analyzing other large-scale contracts for aircraft components and MRO services within the DoD.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While Vertex Aerospace LLC is the prime contractor, there is no explicit information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether Vertex Aerospace actively engages small businesses for subcontracting opportunities, which is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would typically involve performance reviews, milestone tracking, and adherence to contract terms. Transparency is facilitated through contract award databases, but detailed operational oversight and inspector general jurisdiction would depend on specific DoD regulations and the nature of any performance issues that may arise.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Agency Contracts
Aerospace Component Supply
Military Vehicle Maintenance Contracts
Department of Defense Procurement

Risk Flags

Time and Materials pricing structure requires close monitoring to prevent cost overruns.
Long contract duration may limit adaptability to future technological advancements.
Geographic concentration of the contractor could pose supply chain risks.
Lack of specific detail on parts manufactured hinders precise value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.5 million to VERTEX AEROSPACE LLC. 200511!001108!5700!FA8108!OC-ALC/LAD CFT !F3460197D0425 !A!N! !N!0260 ! !20050819!20060819!788547347!091441089!008898843!N!L-3 COMMUNICATIONS AEROSPACE L!8001 MID AMERICA BLVD STE !OKLAHOMA CITY !OK!73135!26736!027!48!FORT HOOD !BELL !TEXAS !+000017819758!N!N!000000000000!J023!MAINT & REPAIR OF EQ/VEHICLES-TRAILERS-CYCLES !A4A!COMBAT VEHICLES !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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $60.5 million.

What is the period of performance?

Start: 2005-08-19. End: 2010-10-01.

What is the historical spending pattern for Vertex Aerospace LLC with the Department of Defense?

Analyzing the historical spending with Vertex Aerospace LLC requires access to a broader dataset of federal contracts. The provided data snippet focuses on a single large award. To understand historical patterns, one would need to query contract databases for all awards to Vertex Aerospace LLC across different agencies and years. This would reveal trends in contract types, values, and the nature of services or products provided. Without this broader context, it's difficult to assess if this $605M contract represents a significant increase or a continuation of a long-standing relationship. Factors like contract renewals, sole-source awards versus competitive bids, and performance history on previous contracts would be crucial for a comprehensive historical analysis.

How does the Time and Materials (T&M) pricing structure of this contract compare to industry standards for similar aircraft parts manufacturing?

Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or is expected to change. For aircraft parts manufacturing, T&M can be advantageous if unforeseen technical challenges arise during production or if custom modifications are frequently required. However, T&M contracts carry a higher risk of cost overruns for the government compared to fixed-price contracts, as the contractor is reimbursed for actual labor hours and material costs, plus a fee. Industry standards often favor fixed-price contracts for well-defined manufacturing efforts to ensure cost certainty. The use of T&M here might suggest a complex or evolving requirement, but it necessitates robust government oversight to manage labor rates, material markups, and overall project duration to control costs effectively and ensure value for money.

What specific types of aircraft parts or auxiliary equipment are covered under this $605M contract?

The provided data categorizes this contract under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' and lists the service description as 'MAINT & REPAIR OF EQ/VEHICLES-TRAILERS-CYCLES.' However, it does not specify the exact types of aircraft parts or auxiliary equipment. This broad description suggests the contract could encompass a wide range of components, potentially including structural parts, engine components, avionics, or specialized equipment for various military aircraft, vehicles, trailers, and cycles. A more detailed breakdown of the Statement of Work (SOW) or contract line item numbers (CLINs) would be necessary to identify the precise nature of the parts and equipment involved.

What is the assessed risk level associated with Vertex Aerospace LLC as a contractor for this significant award?

The provided data does not include a specific risk assessment score or qualitative risk rating for Vertex Aerospace LLC. However, several factors can inform a potential risk assessment. The contract was awarded under 'full and open competition' with four bids, suggesting a competitive market and potentially mitigating risks associated with contractor selection. The 'Time and Materials' pricing structure, however, introduces cost-control risks that require diligent government oversight. The long duration (1869 days) also presents risks related to contractor performance stability, potential changes in market conditions, or technological obsolescence. A comprehensive risk assessment would also consider the contractor's past performance, financial stability, and any prior issues with contract delivery or quality, which are not detailed here.

How does the geographic concentration of the contractor (Oklahoma City, OK) impact the distribution of contract funds and potential supply chain resilience?

The concentration of Vertex Aerospace LLC in Oklahoma City, Oklahoma, means that a significant portion of the $605M contract value will likely flow into the regional economy through wages, supplier payments, and local investments. This can be beneficial for local job creation and economic development. From a supply chain resilience perspective, having a major supplier concentrated in one geographic area can introduce risks. Disruptions due to natural disasters, regional economic downturns, or other localized issues could impact the delivery of critical aircraft parts. Diversifying suppliers geographically can enhance overall supply chain robustness, but the benefits of concentrating work with a capable contractor in a specific region must be weighed against these potential vulnerabilities.

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