State Department awards $18.6M contract for small UAS support to AAR Government Services, Inc

Contract Overview

Contract Amount: $18,634,543 ($18.6M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of State

Start Date: 2023-08-31

End Date: 2026-08-30

Contract Duration: 1,095 days

Daily Burn Rate: $17.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: INL KYIV: SMALL UAS

Plain-Language Summary

Department of State obligated $18.6 million to AAR GOVERNMENT SERVICES, INC. for work described as: INL KYIV: SMALL UAS Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1095 days (3 years) indicates a medium-term need for these services. 3. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 4. This contract falls under 'Other Support Activities for Air Transportation', a broad category. 5. The awardee, AAR Government Services, Inc., is a known entity in the government contracting space. 6. No small business set-aside was utilized, indicating the primary awardee is not a small business.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. The CPFF structure requires close monitoring to ensure costs remain reasonable relative to the services provided. Comparing it to similar contracts for unmanned aerial system (UAS) support would require access to more granular data on scope and deliverables. However, the fixed fee component provides some cost certainty for the contractor's effort.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit offers. The number of bidders is not specified, but this method generally promotes price discovery and allows the government to select the best value offer. The open nature of the competition suggests a healthy market for these types of services.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and the assurance that the government sought the most advantageous offer available in the market.

Public Impact

The primary beneficiaries are likely the Department of State personnel and operations requiring small unmanned aerial system (UAS) support. Services delivered include support activities related to air transportation, specifically for small UAS. The geographic impact is likely concentrated where the Department of State operates and requires UAS capabilities, potentially including overseas locations. Workforce implications may involve specialized technical personnel for operating and maintaining the UAS, as well as support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to incur costs to increase profit if not properly managed.
Lack of specific performance metrics makes it difficult to assess the true value and effectiveness of the services rendered.
The broad 'Other Support Activities for Air Transportation' category may obscure the specific nature and criticality of the UAS support.

Positive Signals

Awarded through full and open competition, suggesting a robust market and competitive pricing.
The contractor, AAR Government Services, Inc., has experience in government contracting, potentially reducing execution risk.
The contract has a defined period of performance, allowing for structured planning and resource allocation.

Sector Analysis

The defense and security sector, particularly concerning unmanned aerial systems (UAS), is experiencing rapid growth and technological advancement. This contract fits within the broader category of aerospace and defense services, supporting government operations that increasingly rely on aerial surveillance and reconnaissance capabilities. Comparable spending benchmarks for UAS support services vary widely based on system complexity, operational tempo, and geographic deployment.

Small Business Impact

This contract was not awarded as a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses within the provided data. This suggests that the primary contract value is likely to flow to the large business prime contractor, AAR Government Services, Inc. The impact on the small business ecosystem would depend on whether the prime contractor actively seeks small business subcontractors for specialized support.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated by the Federal Procurement Data System (FPDS), which publishes contract awards. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Department of Defense Small UAS Programs
Department of Homeland Security Aviation Support Contracts
Intelligence Community UAS Procurement

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Potential for scope creep in 'support activities' over the 3-year period.
Performance metrics not explicitly detailed, making value assessment challenging.
Operational environment context (Kyiv) may introduce unique risks and complexities.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $18.6 million to AAR GOVERNMENT SERVICES, INC.. INL KYIV: SMALL UAS

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 $18.6 million.

What is the period of performance?

Start: 2023-08-31. End: 2026-08-30.

What is the specific nature of the 'small UAS support' being provided under this contract?

The provided data indicates the contract is for 'INL KYIV: SMALL UAS' and falls under 'Other Support Activities for Air Transportation.' While the exact services are not detailed, 'support activities' typically encompass a range of functions such as maintenance, repair, logistics, training, and potentially operational assistance for small unmanned aerial systems. Given the 'INL KYIV' designation, it is highly probable that this contract supports the International Narcotics and Law Enforcement Affairs (INL) bureau's mission in Kyiv, Ukraine, likely involving surveillance, reconnaissance, or interdiction operations related to counternarcotics or border security efforts. The 'air transportation' classification suggests integration with aviation logistics or operational frameworks.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or when there is uncertainty in the costs associated with performance. In this structure, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government, as costs can fluctuate. However, it provides more flexibility for the contractor to adapt to changing requirements. For services like UAS support, where technical challenges or operational needs might evolve, CPFF can be advantageous if managed diligently. It contrasts with Cost-Plus-Incentive-Fee (CPIF) or Cost-Plus-Award-Fee (CPAF) contracts, which incorporate performance incentives to better align contractor efforts with government objectives and potentially control costs more effectively.

What is AAR Government Services, Inc.'s track record with similar Department of State or UAS-related contracts?

AAR Government Services, Inc. is a subsidiary of AAR Corp., a well-established provider of aviation services to government and commercial clients. While specific details on their track record with the Department of State or extensive UAS-specific contracts are not provided in the summary data, AAR Corp. has a history of supporting military and government aviation programs, including aircraft maintenance, logistics, and supply chain management. Their experience in complex aviation environments suggests a capability to handle the demands of UAS support. A deeper analysis would involve reviewing their past performance evaluations and contract history with the government to assess their reliability and success rates in delivering similar services.

What are the potential risks associated with a 3-year CPFF contract for UAS support in an active operational environment?

A significant risk with a 3-year CPFF contract for UAS support, especially in a potentially active operational environment like Kyiv, is cost escalation. The CPFF structure, while providing flexibility, can lead to higher-than-anticipated costs if not rigorously managed, as the contractor is reimbursed for actual expenses plus a fixed fee. Scope creep is another risk; as operational needs evolve, the scope of 'support activities' might expand, leading to increased costs without a corresponding adjustment in the fixed fee unless contract modifications are carefully negotiated. Furthermore, the effectiveness and efficiency of the UAS operations themselves, while supported by the contractor, are critical. If the underlying UAS program faces technical issues or operational limitations, the contractor's support services might be less impactful, yet costs continue to accrue. Ensuring robust oversight, clear performance metrics, and strong cost controls are paramount to mitigating these risks.

How does this contract's value compare to historical spending on similar UAS support services by the Department of State?

Direct comparison of this $18.6 million contract to historical spending on similar Department of State UAS support services is difficult without specific historical data points. The Department of State's utilization of UAS has likely evolved, with increasing investment in recent years for intelligence, surveillance, and reconnaissance (ISR) missions. This contract's value appears substantial for a 3-year period, suggesting a significant operational requirement. However, without knowing the exact scope, scale, and duration of previous UAS support contracts, a precise benchmark is not feasible. It is plausible that spending in this area has increased as the technology matures and its utility becomes more apparent for diplomatic and security missions abroad.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SAQMMA14R0319

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: AAR Government Services Inc.

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: $18,634,543

Exercised Options: $18,634,543

Current Obligation: $18,634,543

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $61,390,287

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