USMC KC-130 Maintenance Contract Awarded to PCI Aviation LLC for $15.9M

Contract Overview

Contract Amount: $15,938,788 ($15.9M)

Contractor: PCI Aviation LLC

Awarding Agency: General Services Administration

Start Date: 2023-03-28

End Date: 2026-03-27

Contract Duration: 1,095 days

Daily Burn Rate: $14.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USMC 2ND MAW KC130 MAINTENANCE

Place of Performance

Location: CHERRY POINT, CRAVEN County, NORTH CAROLINA, 28533

State: North Carolina Government Spending

Plain-Language Summary

General Services Administration obligated $15.9 million to PCI AVIATION LLC for work described as: USMC 2ND MAW KC130 MAINTENANCE Key points: 1. Contract value of $15.9 million over three years for essential KC-130 aircraft maintenance. 2. Sole-source award raises questions about potential cost savings through competition. 3. Performance risk appears moderate given the specialized nature of aviation maintenance. 4. Contract duration of 1095 days aligns with typical aircraft support cycles. 5. Geographic focus on North Carolina for maintenance operations. 6. Firm Fixed Price contract type shifts cost risk to the contractor.

Value Assessment

Rating: fair

The contract value of $15.9 million for three years of KC-130 maintenance appears within a reasonable range for specialized aviation support. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or identify potential cost savings. The firm fixed price structure is generally favorable for the government in controlling costs, but the absence of competition limits the ability to assess value for money definitively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source is available or when a compelling justification exists for not seeking competition. The lack of multiple bidders means that the government did not benefit from price discovery through a competitive process, potentially leading to higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The sole-source nature limits transparency in pricing and prevents the government from leveraging market forces to secure the best possible deal.

Public Impact

The primary beneficiaries are the United States Marine Corps, ensuring the operational readiness of their KC-130 aircraft fleet. Services delivered include essential maintenance and support activities crucial for flight safety and mission capability. Geographic impact is concentrated in North Carolina, where the maintenance activities will be performed. Workforce implications include the potential for skilled aviation mechanics and technicians employed by PCI Aviation LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Lack of transparency in the justification for sole-source procurement.
Potential for contractor lock-in if specialized knowledge is required.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Contract duration aligns with expected aircraft support needs.
PCI Aviation LLC's role in supporting critical USMC aviation assets.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aviation maintenance and support services. The market for military aircraft maintenance is specialized, often involving a limited number of contractors with the necessary certifications, expertise, and security clearances. Spending in this area is critical for maintaining the operational readiness of military fleets, and contracts can range from routine servicing to complex overhauls. Benchmarking is challenging due to the unique nature of military platforms and the specific requirements of each service branch.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements for small businesses. The sole-source nature further limits opportunities for small businesses to participate in this specific contract. The impact on the small business ecosystem is minimal for this particular award, as it does not appear to include provisions designed to foster small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the General Services Administration (GSA) and the relevant USMC contracting and program management offices. Accountability measures are established through the contract terms and conditions, including performance standards and payment schedules. Transparency is limited due to the sole-source nature, but contract award data is publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

USMC Aviation Maintenance Contracts
KC-130 Hercules Support
Air Transportation Support Services
Defense Logistics Agency (DLA) Aviation Support

Risk Flags

Sole-source award may limit cost-effectiveness.
Lack of competitive bidding reduces transparency in pricing.
Potential for contractor performance issues without competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $15.9 million to PCI AVIATION LLC. USMC 2ND MAW KC130 MAINTENANCE

Who is the contractor on this award?

The obligated recipient is PCI AVIATION LLC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $15.9 million.

What is the period of performance?

Start: 2023-03-28. End: 2026-03-27.

What is the specific justification provided by the General Services Administration for awarding this contract on a sole-source basis to PCI Aviation LLC?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is a common designation for sole-source procurements. Typically, such justifications stem from reasons like the existence of only one responsible source capable of providing the required services, urgent and compelling needs where competition is not feasible, or specific national security requirements. Without further documentation from the GSA, the precise rationale remains unspecified. However, for aviation maintenance, sole-source awards can sometimes be justified by unique technical expertise, proprietary data, or existing infrastructure that makes switching contractors impractical or excessively costly. The government is generally required to publish a justification and approval (J&A) document for sole-source awards exceeding certain thresholds, which would detail the specific reasons.

How does the firm fixed price (FFP) contract type benefit the USMC in this KC-130 maintenance agreement?

A Firm Fixed Price (FFP) contract type is highly advantageous for the USMC in this KC-130 maintenance agreement because it shifts the majority of the financial risk from the government to the contractor, PCI Aviation LLC. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides the USMC with significant cost certainty and predictability, making budgeting more straightforward. The contractor is incentivized to manage its costs efficiently and perform the work within the agreed-upon price to maximize profit. This structure is particularly suitable for services where the scope of work is well-defined, such as routine maintenance, and helps prevent cost overruns that can plague cost-reimbursement contracts.

What are the potential risks associated with a sole-source award for critical aircraft maintenance, and how might they be mitigated?

The primary risk of a sole-source award for critical aircraft maintenance is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, PCI Aviation LLC may not have the same incentive to offer the most cost-effective solution. Another risk is contractor complacency or a decline in service quality over time, as there is no immediate threat of losing the contract to a competitor. Mitigation strategies could include robust performance monitoring by the USMC, establishing clear Key Performance Indicators (KPIs) within the contract, and conducting regular market research to assess if competitive conditions might change in the future. The government could also negotiate strong contract terms, including options for renewal based on performance and price reviews, and maintain the option to re-evaluate the sole-source justification periodically.

What is the typical duration for contracts supporting specialized military aircraft like the KC-130, and how does this contract's 1095-day term compare?

Contracts for specialized military aircraft maintenance, such as for the KC-130, often have durations that align with operational cycles and the expected lifespan of major maintenance intervals. A three-year term (1095 days) is a common and reasonable duration for such services. This timeframe allows for consistent support and planning for the USMC while providing the contractor with sufficient operational visibility. Shorter contracts might lead to frequent re-procurement efforts and potential disruptions, while excessively long contracts could lock the government into unfavorable terms or pricing. The 1095-day duration strikes a balance, enabling sustained readiness for the KC-130 fleet without excessive long-term commitment, assuming performance is satisfactory.

Given the contract is for 'Other Support Activities for Air Transportation,' what specific types of maintenance or support are likely included for the KC-130?

The NAICS code 488190, 'Other Support Activities for Air Transportation,' is broad and encompasses a range of services beyond basic line maintenance. For the KC-130, this contract likely includes scheduled depot-level maintenance, unscheduled repairs, component overhauls, aircraft inspections, and potentially logistical support for spare parts. It could also cover specialized services such as avionics system maintenance, engine servicing, structural repairs, and compliance with airworthiness directives. The 'firm fixed price' nature suggests that the scope of work, while potentially encompassing various tasks, is defined well enough to allow for a fixed price to be established, covering labor, materials, and overhead for the specified maintenance activities.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 47QFRA23Q0004

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3022 HIGHWAY 21, ATMORE, AL, 36502

Business Categories: 8(a) Program Participant, Category Business, DoT Certified Disadvantaged Business Enterprise, Government, Native American Tribal Government, Limited Liability Corporation, Manufacturer of Goods, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,266,416

Exercised Options: $16,191,416

Current Obligation: $15,938,788

Actual Outlays: $10,499,089

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline