DoD awards Vertex Aerospace $218M for aircraft parts, highlighting potential cost efficiencies
Contract Overview
Contract Amount: $218,162,190 ($218.2M)
Contractor: Vertex Aerospace LLC
Awarding Agency: Department of Defense
Start Date: 2005-09-23
End Date: 2011-05-21
Contract Duration: 2,066 days
Daily Burn Rate: $105.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: TIME AND MATERIALS
Sector: Defense
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $218.2 million to VERTEX AEROSPACE LLC for work described as: Key points: 1. Significant contract value of $218M for aircraft parts. 2. Competition method was 'Full and Open', suggesting a competitive bidding process. 3. Contract type is 'Time and Materials', which can pose cost control risks. 4. Sector is 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'.
Value Assessment
Rating: fair
The 'Time and Materials' contract type, while flexible, offers less upfront price certainty compared to fixed-price contracts. The total award value of $218M is substantial, and ongoing monitoring will be crucial to ensure costs remain reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition', indicating a broad solicitation process. This method generally promotes competitive pricing, but the 'Time and Materials' structure requires careful oversight to manage the final cost.
Taxpayer Impact: The competitive nature of the award is positive for taxpayers. However, the 'Time and Materials' pricing model necessitates diligent oversight to prevent cost overruns and ensure value for money.
Public Impact
Ensures continued availability of critical aircraft parts for defense operations. Supports jobs within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Potential for cost savings through competitive bidding, though T&M requires vigilance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials contract type
- Long contract duration (2066 days)
Positive Signals
- Full and Open Competition
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. Spending in this area is critical for national security, and benchmarks often vary based on technological complexity and specific part requirements.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors. Further analysis would be needed to determine the extent of small business participation in this large contract.
Oversight & Accountability
The 'OK' status for 'st' and 'sn' suggests the contract is in good standing operationally. However, the 'Time and Materials' nature requires robust oversight from the Defense Contract Management Agency to control costs and ensure performance.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Time and Materials contract type can lead to cost overruns.
- Long contract duration increases exposure to potential cost increases.
- Lack of specific performance metrics in the provided data.
- Potential for scope creep in T&M contracts.
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 $218.2 million to VERTEX AEROSPACE LLC. See the official description on USAspending.
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 $218.2 million.
What is the period of performance?
Start: 2005-09-23. End: 2011-05-21.
What is the typical cost range for similar aircraft parts under fixed-price contracts to benchmark the T&M spending?
Benchmarking Time and Materials (T&M) contracts against fixed-price agreements for similar aircraft parts is challenging due to inherent differences in pricing structures. Fixed-price contracts offer greater cost certainty upfront. T&M contracts, while flexible, rely heavily on detailed labor rates and material cost tracking. A comprehensive benchmark would require analyzing historical data for comparable parts procured under fixed-price contracts, adjusting for inflation and specific technical requirements, to establish a reasonable expectation of cost.
How effectively is the 'Time and Materials' aspect of the contract being monitored to mitigate cost overrun risks?
Effective monitoring of T&M contracts involves rigorous tracking of labor hours, employee classifications, overhead rates, and material costs. Agencies typically implement detailed reporting requirements, conduct audits, and set ceiling prices or establish cost-plus-fixed-fee elements to manage risk. The Defense Contract Management Agency (DCMA) would be responsible for this oversight, ensuring that all billed costs are reasonable, allocable, and allowable according to contract terms and federal regulations.
What is the long-term strategic value of this contract beyond immediate parts provision?
Beyond the immediate provision of aircraft parts, this contract likely supports the sustainment and operational readiness of specific military platforms. It may also foster long-term relationships with key suppliers, ensuring a stable supply chain for critical components. Furthermore, the competitive award process, even with a T&M structure, can drive innovation and efficiency within the defense industrial base, contributing to overall national security capabilities.
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: 2005-09-23
Current End Date: 2011-05-21
Potential End Date: 2011-05-21 00:00:00
Last Modified: 2011-03-21
More Contracts from Vertex Aerospace LLC
- T45 CLS Cmmars Task Order, Materials - Aircraft Maintenance — $1.5B (Department of Defense)
- Lccs Services for Army Fleet of C-12/Rc-12/Uc-35 Aircraft AT Worldwide Locations Includes Maintenance, Upgrades and Elective Improvements — $1.3B (Department of Defense)
- T-1 Contractor Operated and Maintained Base Supply (combs) — $734.8M (Department of Defense)
- Field and Sustainment Level Maintenance in Support of Aircraft Deployed in the Usarcent AOR — $728.3M (Department of Defense)
- E-6B Contractor Logistics Support (CLS) Follow-On Task Order — $650.8M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)