State Department awards $58.6M for overseas air transportation support, with 80% of contract value potentially going to a single vendor

Contract Overview

Contract Amount: $58,596,018 ($58.6M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of State

Start Date: 2019-05-30

End Date: 2021-05-31

Contract Duration: 732 days

Daily Burn Rate: $80.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: OVERSEAS CONTRACT

Place of Performance

Location: PATRICK AFB, BREVARD County, FLORIDA, 32925

State: Florida Government Spending

Plain-Language Summary

Department of State obligated $58.6 million to AAR GOVERNMENT SERVICES, INC. for work described as: OVERSEAS CONTRACT Key points: 1. Contract value represents a significant investment in essential air transportation services. 2. The contract's reliance on a single vendor raises concerns about competition and potential price escalation. 3. Performance risk appears moderate given the nature of support activities, but vendor concentration is a key indicator. 4. The contract duration of two years provides a stable period for service delivery. 5. This contract falls within the 'Other Support Activities for Air Transportation' category, indicating specialized services. 6. The award was made under full and open competition, suggesting an initial effort to maximize value.

Value Assessment

Rating: fair

The contract's total value of $58.6 million over two years needs to be benchmarked against similar support contracts for overseas operations. Without specific per-unit cost data or comparisons to market rates for comparable services, a definitive value-for-money assessment is challenging. The 'COST PLUS FIXED FEE' (CPFF) contract type can sometimes lead to higher costs if not managed carefully, as it incentivizes the contractor to incur costs. The provided benchmark value of 80049 (unit unspecified) is difficult to interpret without context but suggests a potential area for further investigation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive indicator for price discovery and value. However, the data indicates that 80% of the contract value may be allocated to a single vendor, which could imply limited actual competition for the majority of the work. The number of bidders is not specified, making it difficult to fully assess the breadth of competition.

Taxpayer Impact: While full and open competition was the initial approach, the potential for a single vendor to receive the bulk of the funds means taxpayers may not be realizing the full benefits of competitive pricing for the entire scope of work.

Public Impact

The primary beneficiaries are likely U.S. government personnel and operations requiring air transportation support in overseas locations. Services delivered include essential support activities for air transportation, ensuring operational continuity. The geographic impact is focused on overseas locations where the Department of State operates. Workforce implications may include the direct employment by the contractor and potential indirect impacts on government personnel managing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to 80% allocation to a single entity.
CPFF contract type may not always yield the most cost-effective outcome without stringent oversight.
Lack of detailed performance metrics makes it hard to gauge efficiency.
Limited transparency on the specific services covered by the 80% allocation.

Positive Signals

Awarded under full and open competition, indicating an initial effort to find the best value.
Contract duration provides stability for essential services.
The contractor, AAR Government Services, Inc., likely has experience in this domain.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on support services for air transportation. The market for such services is often characterized by specialized expertise and long-term relationships with government agencies. Comparable spending benchmarks would typically involve analyzing other contracts for logistical support, base operations, or aviation services in overseas environments. The total contract value of $58.6 million is substantial for a two-year period, suggesting a significant operational requirement.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside. However, the prime contractor, AAR Government Services, Inc., may engage small businesses as subcontractors, but this information is not provided. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were not prioritized.

Oversight & Accountability

Oversight mechanisms would typically involve the Department of State's contracting officers and program managers responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. Accountability measures are inherent in the CPFF contract type, which requires detailed cost reporting. Transparency assessment is limited by the available data; while the award was public, the specifics of the 80% allocation and performance metrics are not detailed. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

Overseas Base Operations Support
Logistics and Transportation Services
Government Aviation Support Contracts
Department of State Foreign Affairs Support

Risk Flags

Potential for limited competition due to high vendor allocation.
CPFF contract type requires diligent oversight to control costs.
Lack of detailed performance metrics in public data.
Unclear definition and application of benchmark value.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $58.6 million to AAR GOVERNMENT SERVICES, INC.. OVERSEAS CONTRACT

Who is the contractor on this award?

The obligated recipient is AAR GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $58.6 million.

What is the period of performance?

Start: 2019-05-30. End: 2021-05-31.

What specific air transportation support activities are covered under this contract, and how is the 80% allocation to a single vendor justified?

The contract, identified by NAICS code 488190, covers 'Other Support Activities for Air Transportation.' This can encompass a range of services such as ground handling, aircraft maintenance support, air traffic control assistance, fueling coordination, and other logistical functions essential for operating air assets in overseas locations. The justification for allocating 80% of the contract value to a single vendor, despite being awarded under full and open competition, is not explicitly detailed in the provided data. Typically, such an allocation might stem from a vendor possessing unique capabilities, existing infrastructure, or a pre-established role in the operational environment that makes them the most suitable or cost-effective choice for the majority of the required services. However, this concentration warrants scrutiny to ensure it does not limit future competition or lead to suboptimal pricing for the bulk of the work.

How does the Cost Plus Fixed Fee (CPFF) contract type influence the overall cost-effectiveness and risk for the government?

The Cost Plus Fixed Fee (CPFF) contract type is designed to reimburse the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves a high degree of uncertainty, making it difficult to establish a fixed price upfront. For the government, the primary benefit is flexibility and the ability to proceed with work that has evolving requirements. However, the risk lies in potential cost overruns, as the contractor is incentivized to incur costs to complete the work, and the government bears the financial burden. The fixed fee, while negotiated, does not directly tie the contractor's profit to cost savings. Effective oversight, stringent cost controls, and clear performance metrics are crucial to mitigate the risks associated with CPFF contracts and ensure value for taxpayer money.

What is the historical spending pattern for similar overseas air transportation support contracts by the Department of State?

Analyzing historical spending patterns for similar overseas air transportation support contracts by the Department of State is crucial for benchmarking and identifying trends. Without access to a comprehensive database of past contracts, a precise historical analysis is challenging. However, contracts of this nature typically involve significant, multi-year commitments due to the operational complexities and infrastructure required in overseas environments. Spending can fluctuate based on geopolitical conditions, changes in diplomatic missions, and the scale of U.S. presence in specific regions. A review of previous awards for aviation support, base operations, or logistical services in comparable geographic areas would reveal average contract values, durations, and the typical competitive landscape. Significant deviations from historical norms, either in terms of cost or competition, would warrant further investigation.

What are the potential risks associated with AAR Government Services, Inc. receiving 80% of the contract value?

The primary risk associated with AAR Government Services, Inc. receiving 80% of the contract value is vendor dependency and reduced competition. This concentration can lead to a lack of competitive pressure on pricing for the majority of the services, potentially resulting in higher costs for the government over the contract's life. It may also create a barrier for other capable vendors to gain a foothold or expand their services in this specific area, limiting future competitive options. Furthermore, if AAR Government Services, Inc. faces performance issues or financial instability, it could significantly disrupt critical air transportation support operations due to the high reliance on their services. This scenario underscores the importance of robust performance monitoring and contingency planning by the Department of State.

How does the benchmark value of 80049 relate to the overall contract value and the services provided?

The benchmark value of 80049 is presented without units or context, making its interpretation difficult in relation to the total contract value of $58.6 million and the specific services provided. It is unclear if this represents a per-unit cost, a monthly rate, an annual figure, or some other metric. To be a meaningful benchmark, it would need to be clearly defined (e.g., cost per flight hour, cost per aircraft serviced, cost per month for a specific support package) and compared against industry standards or similar government contracts. Without this clarification, the benchmark value provides limited insight into the cost-effectiveness or pricing structure of this particular contract. Further data is required to understand its significance.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

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

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aarcorp

Address: 1100 N WOOD DALE RD, WOOD DALE, IL, 60191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $60,142,659

Exercised Options: $60,142,659

Current Obligation: $58,596,018

Actual Outlays: $1,597,431

Subaward Activity

Number of Subawards: 62

Total Subaward Amount: $7,917,983

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA16D0136

IDV Type: IDC

Timeline