DOJ's $223M aviation support contract to Vertex Aerospace shows strong competition and fair pricing

Contract Overview

Contract Amount: $223,067,839 ($223.1M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Justice

Start Date: 2019-07-01

End Date: 2024-12-31

Contract Duration: 2,010 days

Daily Burn Rate: $111.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: TOTAL AVIATION SUPPORT SERVICE

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Justice obligated $223.1 million to VERTEX AEROSPACE LLC for work described as: TOTAL AVIATION SUPPORT SERVICE Key points: 1. Contract offers good value for essential aviation support services. 2. Robust competition indicates effective price discovery. 3. Low risk indicators suggest stable contractor performance. 4. Contract duration aligns with operational needs. 5. Vertex Aerospace is well-positioned within the aviation support sector. 6. Small business participation appears limited in this contract.

Value Assessment

Rating: good

The total value of $223 million over its period of performance appears reasonable given the scope of aviation support services provided. Benchmarking against similar contracts for comprehensive aviation maintenance and logistics is challenging without more granular data on specific services rendered. However, the cost-plus-fixed-fee structure, while potentially leading to cost overruns if not managed tightly, is common for complex service contracts where exact costs are difficult to predict upfront. The contract's value is consistent with the scale of operations for an agency like the DEA.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were allowed to bid. The presence of four bidders suggests a healthy level of competition for these specialized aviation support services. This competitive environment is generally favorable for achieving fair market prices and ensuring the government receives the best value.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it drives down costs through market forces and encourages a wider pool of contractors to offer their services, leading to potentially better deals.

Public Impact

Benefits the Drug Enforcement Administration (DEA) by ensuring the operational readiness of its aviation fleet. Provides critical aircraft maintenance, repair, and logistical support services. Geographic impact is primarily centered around DEA aviation facilities, with potential reach across operational areas. Supports a specialized workforce of aviation mechanics, technicians, and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not closely monitored.
Limited visibility into specific small business subcontracting opportunities.
Dependence on a single prime contractor for a critical function.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Contract duration of over 5 years suggests a stable and reliable service provision.
Vertex Aerospace has a track record in aviation support, implying experience and capability.

Sector Analysis

The aviation support services sector is a critical component of national security and law enforcement operations, providing essential maintenance, logistics, and operational support for aircraft fleets. This contract fits within the broader defense and public safety aerospace market, which is characterized by specialized technical expertise and stringent regulatory requirements. Spending in this area is often driven by the need to maintain aging fleets and ensure mission readiness, with contracts typically awarded through competitive processes to established aerospace service providers.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (sb: false). While the contract was competed fully and openly, there is no explicit information provided regarding subcontracting goals or achievements with small businesses. This suggests that small businesses may not have been primary bidders or subcontractors on this particular award, potentially limiting their direct involvement and the broader impact on the small business aviation ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's contracting and program management officials within the Drug Enforcement Administration. The contract type (Cost Plus Fixed Fee) necessitates robust financial oversight to manage costs and prevent overruns. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General's office for the DOJ would have jurisdiction for audits and investigations into potential fraud, waste, or abuse.

Related Government Programs

Federal Aviation Administration (FAA) Operations
Department of Defense Aviation Maintenance Contracts
Homeland Security Air and Marine Operations Support
Law Enforcement Aviation Fleet Management

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost growth.
Limited information on small business subcontracting could indicate missed opportunities for economic inclusion.
Dependence on a single contractor for critical aviation support poses a risk if performance falters.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $223.1 million to VERTEX AEROSPACE LLC. TOTAL AVIATION SUPPORT SERVICE

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Drug Enforcement Administration).

What is the total obligated amount?

The obligated amount is $223.1 million.

What is the period of performance?

Start: 2019-07-01. End: 2024-12-31.

What is Vertex Aerospace LLC's track record with government contracts, particularly within the aviation support sector?

Vertex Aerospace LLC has a significant history of performing aviation support services for various government agencies. Their portfolio often includes maintenance, repair, overhaul (MRO), and logistics support for a range of aircraft, including fixed-wing and rotary-wing platforms. Prior contract performance data, available through federal procurement databases, would detail their success rates, any past performance issues, and their experience with similar contract types and scopes. Generally, companies awarded large, long-term contracts like this one have demonstrated a capacity to meet demanding performance standards and manage complex operations, though specific details would require a deeper dive into their contract history and performance reviews.

How does the pricing structure (Cost Plus Fixed Fee) of this contract compare to industry standards for similar aviation support services?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for complex service contracts where the full scope of work and associated costs are not precisely definable at the outset, such as long-term aviation support. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While this structure provides flexibility, it can incentivize cost increases if not managed diligently. Industry standards vary, but CPFF is generally accepted for R&D, complex services, and long-duration support where predictability is low. Benchmarking requires comparing the fixed fee percentage and the total cost of services against similar contracts for comparable aircraft types and service levels, considering factors like geographic location and required certifications.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Primary risks include potential cost overruns due to the CPFF structure, contractor performance issues leading to aircraft downtime, and supply chain disruptions for parts. Mitigation strategies likely involve robust government oversight of costs and performance metrics, clear contract deliverables and service level agreements (SLAs), and potentially requiring the contractor to maintain specific inventory levels or have contingency plans for critical parts. The government's ability to monitor expenditures, conduct audits, and enforce contract terms are key mitigation tools. The contractor's own risk management processes, including quality control and supply chain management, are also crucial.

How has Vertex Aerospace performed on previous contracts with the DEA or similar law enforcement/intelligence agencies?

Assessing Vertex Aerospace's specific performance with the DEA requires accessing past performance evaluations and contract data. However, their ability to secure a large, multi-year contract like this one suggests a generally positive or at least acceptable past performance record with government entities. Agencies typically consider a contractor's history of meeting deadlines, quality of work, responsiveness, and adherence to budget when making award decisions. Any significant past performance issues, such as major defaults or unresolved disputes, would likely have precluded them from receiving this award, especially under full and open competition.

What is the historical spending trend for aviation support services within the DEA or comparable agencies?

Historical spending on aviation support services within agencies like the DEA is typically driven by fleet size, aircraft age, operational tempo, and the complexity of missions. Spending tends to be relatively stable year-over-year, with fluctuations based on major fleet modernization programs, unforeseen maintenance needs, or changes in operational requirements. Agencies often consolidate support services to achieve economies of scale, leading to larger, longer-term contracts. Analyzing historical budgets and contract awards for aviation support within the DEA and similar agencies would reveal trends in spending levels, contractor choices, and the evolution of service requirements over time.

What are the implications of the contract's duration (ending 2024, awarded 2019) on long-term planning and budget stability for the DEA's aviation division?

The contract's duration, spanning from July 2019 to December 2024, provides the DEA's aviation division with a significant period of budget predictability and service continuity. This allows for more effective long-term planning regarding fleet readiness, operational deployment, and resource allocation. A stable support provider reduces the administrative burden and potential disruption associated with frequent re-competition or contractor transitions. However, it also means the agency is locked into a specific provider and pricing structure for an extended period, which could be a disadvantage if market conditions change significantly or if performance issues arise that are difficult to rectify within the existing contract.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft 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

Solicitation ID: 15DDHQ18R00000004

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $408,825,560

Exercised Options: $266,607,924

Current Obligation: $223,067,839

Actual Outlays: $153,669,854

Subaward Activity

Number of Subawards: 241

Total Subaward Amount: $22,046,890

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline