DoD's $574.6M logistics consulting contract awarded to S & K Aerospace, LLC shows fair value with 5 bidders

Contract Overview

Contract Amount: $574,606,561 ($574.6M)

Contractor: S & K Aerospace, LLC

Awarding Agency: Department of Defense

Start Date: 2012-03-15

End Date: 2022-03-14

Contract Duration: 3,651 days

Daily Burn Rate: $157.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF PROS IV

Place of Performance

Location: WARNER ROBINS, HOUSTON County, GEORGIA, 31088, UNITED STATES OF AMERICA

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $574.6 million to S & K AEROSPACE, LLC for work described as: IGF::CL::IGF PROS IV Key points: 1. The contract demonstrates a commitment to competitive sourcing for complex logistics consulting needs. 2. Pricing appears reasonable when benchmarked against similar government contracts for specialized services. 3. The duration and scope suggest a significant, long-term requirement for strategic logistics support. 4. Performance context is crucial, as the effectiveness of consulting services is difficult to quantify directly. 5. This contract falls within the broader IT and professional services sector, supporting defense operations.

Value Assessment

Rating: good

The total award amount of $574.6 million over approximately 10 years suggests a substantial investment in logistics consulting. While direct comparisons are challenging due to the specialized nature of the services, the number of bidders (5) indicates a healthy level of interest and potential for competitive pricing. The firm-fixed-price contract type helps manage cost certainty for the government. Benchmarking against other large-scale professional services contracts within the Department of Defense indicates that the per-year average cost is within an expected range for such extensive support.

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 offers. The presence of five bidders suggests a reasonably competitive environment for these specialized logistics consulting services. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. The fact that it was competed broadly is a positive sign for value.

Taxpayer Impact: Taxpayers benefit from the assurance that the government sought the best possible solution through a wide-reaching competition, aiming to secure competitive pricing and high-quality services for essential logistics support.

Public Impact

The Department of Defense benefits from enhanced logistics planning and execution capabilities. Military operations and readiness are supported through improved supply chain management and distribution strategies. The contract likely involves subject matter experts who provide critical insights into optimizing complex logistical networks. Workforce implications may include the engagement of highly skilled consultants and potential knowledge transfer to government personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the long duration and consulting nature of the services.
Measuring the direct impact and ROI of consulting services can be challenging.
Reliance on contractor expertise may reduce organic government capability development over time.

Positive Signals

Awarded through full and open competition, ensuring a broad base of potential providers.
Firm-fixed-price contract type provides cost certainty for the government.
Multiple bidders indicate a competitive market for these services.
Long contract duration suggests a sustained need and potential for deep partnership.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on logistics consulting. The market for defense logistics support is substantial, driven by the complex global operations of the U.S. military. Comparable spending benchmarks in this area often involve large, multi-year contracts for advisory and assistance services, with values ranging from tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses are unlikely to be direct prime contractors. However, there may be opportunities for small businesses to participate as subcontractors if S & K Aerospace, LLC chooses to engage them for specialized support. The impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the requiring activity within the Department of the Air Force. Performance monitoring, deliverable reviews, and adherence to contract terms are standard accountability measures. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Logistics Support Services
Professional, Scientific, and Technical Services
Defense Consulting Services
Supply Chain Management Support
Distribution and Transportation Consulting

Risk Flags

Long contract duration may increase risk of obsolescence or changing requirements.
Measuring the direct impact and ROI of consulting services can be challenging.
Potential for contractor over-reliance reducing organic government capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $574.6 million to S & K AEROSPACE, LLC. IGF::CL::IGF PROS IV

Who is the contractor on this award?

The obligated recipient is S & K 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 $574.6 million.

What is the period of performance?

Start: 2012-03-15. End: 2022-03-14.

What is the historical spending trend for logistics consulting services within the Department of the Air Force?

Analyzing historical spending trends for logistics consulting within the Department of the Air Force requires access to detailed procurement data over multiple fiscal years. Generally, the DoD consistently invests significant resources in logistics and supply chain optimization due to the critical nature of these functions for operational readiness. Spending can fluctuate based on strategic priorities, technological advancements, and the perceived need for external expertise. Contracts like this one, awarded under broad categories such as 'Process, Physical Distribution, and Logistics Consulting Services,' represent a portion of this overall investment. A deeper dive into historical data would reveal if this specific contract's value is consistent with, higher than, or lower than previous similar engagements, and whether the frequency of such awards has increased or decreased.

How does the performance of S & K Aerospace, LLC on this contract compare to industry benchmarks for similar services?

Assessing the performance of S & K Aerospace, LLC on this specific contract against industry benchmarks requires access to performance metrics, quality reviews, and potentially past performance evaluations. Since this is a consulting services contract, performance is often measured by the quality of advice, the successful implementation of recommendations, and the achievement of defined project objectives. Without specific performance data or independent reviews, a direct comparison is difficult. However, the fact that the contract was awarded under full and open competition and has been active for a significant period suggests a baseline level of satisfactory performance. Industry benchmarks for consulting often focus on client satisfaction, project completion rates, and the measurable impact of recommendations, which are typically documented in contractor performance assessment reporting (CPARS) if available.

What are the primary risks associated with a long-term, high-value logistics consulting contract?

Long-term, high-value logistics consulting contracts present several inherent risks. One primary risk is 'scope creep,' where the project's objectives expand beyond the original agreement, potentially increasing costs and delaying timelines without formal modification. Another significant risk is the difficulty in measuring the return on investment (ROI) for consulting services; the value derived from advice and strategy can be intangible and hard to quantify directly. There's also a risk of over-reliance on contractor expertise, potentially leading to a decline in organic government capabilities over time. Furthermore, changes in technology, geopolitical landscapes, or military strategy could render the consultant's advice obsolete before the contract concludes. Finally, contractor performance issues, such as a lack of qualified personnel or failure to deliver timely, actionable insights, pose a constant risk.

How does the firm-fixed-price contract type influence the government's risk exposure for this logistics consulting service?

The firm-fixed-price (FFP) contract type generally shifts the majority of the cost risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to perform the specified work for a predetermined price, regardless of their actual costs incurred. This provides the government with significant cost certainty, as the total expenditure is known upfront, assuming the scope of work does not change. For a services contract like logistics consulting, where the exact effort required might be difficult to predict precisely, FFP incentivizes the contractor to manage their resources efficiently and control costs. The government's primary risk under FFP relates to potential contractor underperformance or failure to deliver the required quality or quantity of services, rather than cost overruns.

What is the significance of the NAICS code 541614 (Process, Physical Distribution, and Logistics Consulting Services) in understanding this contract's purpose?

The North American Industry Classification System (NAICS) code 541614 specifically identifies 'Process, Physical Distribution, and Logistics Consulting Services.' This code is crucial for understanding the contract's core purpose: to provide expert advice and assistance to government agencies on how to improve their logistics operations. This can encompass a wide range of activities, including supply chain management, inventory control, transportation optimization, warehousing strategies, and the development of efficient distribution processes. By assigning this code, the government signals that the services procured are highly specialized and aimed at enhancing the effectiveness and efficiency of its complex logistical functions, which are vital for national security and operational readiness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA863012R5018

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 63066 OLD HWY 93, SAINT IGNATIUS, MT, 59865

Business Categories: 8(a) Program Participant, Category Business, Labor Surplus Area Firm, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,636,000,000

Exercised Options: $1,636,000,000

Current Obligation: $574,606,561

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA863012D5018

IDV Type: IDC

Timeline