DoD awards $51.5M contract for 1st Cavalry/4th Infantry Division equipment transport and maintenance

Contract Overview

Contract Amount: $51,490,581 ($51.5M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2008-08-11

End Date: 2009-08-11

Contract Duration: 365 days

Daily Burn Rate: $141.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: LABOR SERVICES TO PERFORM 1ST CALVARY DIV/4TH INFANTRY DIV EQUIP TRANSWER, MAINTENANCE ETC.

Place of Performance

Location: FORT IRWIN, SAN BERNARDINO County, CALIFORNIA, 92310

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $51.5 million to VERTEX AEROSPACE LLC for work described as: LABOR SERVICES TO PERFORM 1ST CALVARY DIV/4TH INFANTRY DIV EQUIP TRANSWER, MAINTENANCE ETC. Key points: 1. Contract value appears reasonable for specialized military logistics and maintenance services. 2. Full and open competition suggests a competitive bidding process was utilized. 3. Contract duration of one year indicates a need for immediate or short-term support. 4. The award to Vertex Aerospace LLC suggests a focus on established defense contractors. 5. The North American Industry Classification System (NAICS) code 336413 points to a specific manufacturing and repair niche. 6. The contract type (Time and Materials) allows for flexibility but requires careful oversight to manage costs.

Value Assessment

Rating: good

The contract value of $51.5 million for a one-year period for equipment transport, maintenance, and related services for two Army divisions is within a reasonable range for such specialized military support. Benchmarking against similar contracts for large-scale equipment maintenance and logistics for combat divisions would provide a more precise value-for-money assessment. The Time and Materials pricing structure, while flexible, necessitates robust oversight to ensure costs remain aligned with the scope of work and market rates for labor and materials.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award.

Public Impact

Personnel and equipment of the 1st Cavalry Division and 4th Infantry Division benefit from enhanced readiness through timely maintenance and transport. The contract supports critical logistical functions for U.S. Army operations. The primary geographic impact is on military installations where these divisions are based or operating. The contract may indirectly support a workforce skilled in military equipment maintenance and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing structure if not closely monitored.
Ensuring consistent quality of maintenance and repair services across all equipment.
Logistical challenges in coordinating transport and maintenance for two distinct divisions.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Vertex Aerospace LLC is an established entity in the aerospace and defense sector.
Contract addresses essential operational support for key Army divisions.

Sector Analysis

This contract falls within the aerospace and defense manufacturing and support sector, specifically focusing on aircraft parts and auxiliary equipment. The market for military logistics and maintenance services is substantial, driven by the operational needs of armed forces globally. This contract represents a segment of the broader defense industrial base that provides critical sustainment capabilities for military hardware.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears minimal unless Vertex Aerospace LLC voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight would typically be managed by the Defense Contract Management Agency (DCMA) and the relevant Army contracting command. Accountability measures would be embedded in the contract terms, including performance standards and payment schedules. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Army Logistics Modernization
Military Equipment Maintenance Services
Defense Transportation Contracts
Aircraft Parts Manufacturing and Repair

Risk Flags

Potential for cost creep due to Time and Materials contract type.
Ensuring adequate quality control for maintenance and repair services.
Complexity of coordinating logistics for two separate divisions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.5 million to VERTEX AEROSPACE LLC. LABOR SERVICES TO PERFORM 1ST CALVARY DIV/4TH INFANTRY DIV EQUIP TRANSWER, MAINTENANCE ETC.

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 $51.5 million.

What is the period of performance?

Start: 2008-08-11. End: 2009-08-11.

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

Vertex Aerospace LLC has a history of performing contracts for the Department of Defense, often related to aircraft maintenance, repair, and overhaul (MRO) services, as well as component manufacturing. Their experience typically spans various military aircraft platforms and support equipment. While specific details of past performance on contracts of this exact scale and scope (equipment transport and maintenance for two divisions) would require deeper analysis of contract databases and performance reviews, their presence in the defense sector suggests a familiarity with military operational requirements and contracting procedures. Assessing their past performance on similar logistics and sustainment contracts would be crucial to understanding their capability and reliability for this award.

How does the $51.5 million value compare to similar military equipment maintenance and transport contracts?

The $51.5 million contract value for a one-year period for equipment transport and maintenance for two Army divisions is substantial but appears within the expected range for such critical support services. Comparable contracts often involve extensive logistical planning, specialized personnel, and potentially complex repair work on diverse military equipment. Factors influencing cost include the type and quantity of equipment, the geographic scope of operations, the required turnaround times for maintenance, and the specific labor rates and material costs. Without direct access to a benchmark database of identical contracts, a precise comparison is difficult, but the figure suggests a significant operational requirement being met.

What are the primary risks associated with this Time and Materials (T&M) contract?

The primary risk associated with a Time and Materials (T&M) contract is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor and materials, plus a fixed fee or hourly rate. If not managed diligently, this structure can lead to costs exceeding initial estimates, especially if the scope of work expands or if labor hours and material usage are not closely monitored. For this contract, risks include unexpected equipment failures requiring extensive repairs, unforeseen logistical challenges, or extended timelines that increase labor hours. Effective oversight, detailed record-keeping, and clear communication between the government and the contractor are essential to mitigate these risks.

How effective is the Defense Contract Management Agency (DCMA) in overseeing contracts of this nature?

The Defense Contract Management Agency (DCMA) plays a crucial role in overseeing contracts like this one, ensuring that contractors meet their contractual obligations regarding quality, cost, and schedule. DCMA's responsibilities typically include contract administration, quality assurance, and payment processing. For T&M contracts, DCMA's oversight is particularly important to verify labor hours, material costs, and the necessity of the work performed. Their effectiveness is generally considered high, as they are equipped with trained personnel and established procedures to monitor contractor performance and compliance. However, the sheer volume and complexity of contracts can present challenges, and the specific effectiveness for any given contract depends on resource allocation and the diligence of the assigned administrative contracting officer (ACO).

What is the historical spending pattern for equipment transport and maintenance for Army divisions?

Historical spending patterns for equipment transport and maintenance for Army divisions are typically substantial and recurring, reflecting the continuous need to maintain operational readiness. These costs are often embedded within larger operational budgets or specific sustainment programs. Spending can fluctuate based on deployment cycles, equipment modernization efforts, and the intensity of training exercises. Contracts for such services are awarded regularly, with values varying significantly based on the scale of the division, the types of equipment involved, and the duration of the support required. Analyzing past awards for similar divisions or units would reveal trends in contract values, competition levels, and the types of contractors typically engaged.

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

Financial Breakdown

Contract Ceiling: $125,229,378

Exercised Options: $52,969,103

Current Obligation: $51,490,581

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3460197D0425

IDV Type: IDC

Timeline