DOT awards $51.2M contract for Air Traffic Control services in Area 1, with a 7-year duration

Contract Overview

Contract Amount: $51,213,576 ($51.2M)

Contractor: Midwest AIR Traffic Control Service Inc

Awarding Agency: Department of Transportation

Start Date: 2024-11-27

End Date: 2032-01-31

Contract Duration: 2,621 days

Daily Burn Rate: $19.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: THE FCT CONTRACT ENCOMPASSES THE SCOPE OF ATC SERVICES AND ASSOCIATED SUPPORT SERVICES REQUIRED FOR THE DAY-TO-DAY OPERATION OF FCTS AS DEFINED IN THE STATEMENT OF WORK (SOW) FOR AREA 1.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $51.2 million to MIDWEST AIR TRAFFIC CONTROL SERVICE INC for work described as: THE FCT CONTRACT ENCOMPASSES THE SCOPE OF ATC SERVICES AND ASSOCIATED SUPPORT SERVICES REQUIRED FOR THE DAY-TO-DAY OPERATION OF FCTS AS DEFINED IN THE STATEMENT OF WORK (SOW) FOR AREA 1. Key points: 1. Contract value of $51.2M over approximately 7 years suggests a moderate annual spend. 2. The contract is for essential Air Traffic Control services, indicating a critical operational need. 3. A firm-fixed-price contract type generally shifts cost risk to the contractor. 4. The definitive contract award type implies a clear scope of work. 5. The contract is awarded to Midwest Air Traffic Control Service Inc., suggesting a single incumbent provider. 6. The duration of over 7 years indicates a long-term commitment to these services.

Value Assessment

Rating: good

The contract value of $51.2M over roughly 7 years equates to an annual spend of approximately $7.3M. Benchmarking this against similar air traffic control service contracts would require access to a broader dataset of comparable procurements. However, the firm-fixed-price structure suggests that the government has negotiated a set price, which can be advantageous if the contractor's costs remain within expectations. The absence of specific performance metrics or detailed cost breakdowns makes a precise value-for-money assessment challenging without further information.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of four bidders, as suggested by the 'no' field, points to a reasonably competitive environment. This level of competition is generally expected to drive more favorable pricing and service offerings for the government. The specific details of the bidding process and the number of proposals received would provide a clearer picture of the competitive intensity.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market that encourages competitive pricing and innovation, potentially leading to better value for the services procured.

Public Impact

The primary beneficiaries are the Federal Aviation Administration (FAA) and the flying public, who rely on safe and efficient air traffic control. The services delivered are critical for the day-to-day operation of air traffic control in Area 1. The geographic impact is focused on Area 1, likely a specific region or sector of airspace. The contract supports the workforce involved in air traffic control operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the long contract duration and specialized nature of ATC services.
Reliance on a single contractor for critical infrastructure could pose risks if performance degrades.
The firm-fixed-price nature might disincentivize cost-saving innovations by the contractor if not structured with performance incentives.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Firm-fixed-price contract type provides cost certainty for the government.
Long-term contract provides stability for essential air traffic control operations.
The incumbent contractor, Midwest Air Traffic Control Service Inc., likely possesses established expertise in this domain.

Sector Analysis

The Air Traffic Control (ATC) sector is a critical component of national infrastructure, ensuring the safe and efficient movement of aircraft. This contract falls within the broader aerospace and defense services industry. The market for ATC services is highly specialized, often dominated by a few key players with the necessary certifications and expertise. Government spending in this area is driven by the need to maintain and operate complex air traffic management systems, with significant investments in technology and personnel.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of small business subcontracting requirements (sb: false). This suggests that the primary award was made to a larger entity, and opportunities for small businesses may be limited unless they are direct subcontractors to Midwest Air Traffic Control Service Inc. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration (FAA), a division of the Department of Transportation. The contract's firm-fixed-price nature and definitive award type suggest a well-defined scope, which aids oversight. Accountability measures would be tied to the performance standards outlined in the Statement of Work (SOW). Transparency would be facilitated through contract award databases and potentially through agency reporting on air traffic control operations. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air Traffic Control Operations
Aviation Services
National Airspace System Management
Federal Aviation Administration Contracts

Risk Flags

Long-term reliance on a single contractor for critical infrastructure.
Potential for performance degradation over the contract's extended duration.
Limited visibility into contractor's internal cost structures due to firm-fixed-price.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $51.2 million to MIDWEST AIR TRAFFIC CONTROL SERVICE INC. THE FCT CONTRACT ENCOMPASSES THE SCOPE OF ATC SERVICES AND ASSOCIATED SUPPORT SERVICES REQUIRED FOR THE DAY-TO-DAY OPERATION OF FCTS AS DEFINED IN THE STATEMENT OF WORK (SOW) FOR AREA 1.

Who is the contractor on this award?

The obligated recipient is MIDWEST AIR TRAFFIC CONTROL SERVICE INC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $51.2 million.

What is the period of performance?

Start: 2024-11-27. End: 2032-01-31.

What is the historical spending pattern for Air Traffic Control services in Area 1, and how does this $51.2M contract compare?

To accurately assess historical spending patterns and compare this $51.2M contract, one would need access to historical contract data for Air Traffic Control services specifically for Area 1. This would involve identifying previous contracts awarded for similar services, their values, durations, and the contractors involved. Without this specific historical data, it's difficult to determine if $51.2M over approximately 7 years represents an increase, decrease, or stable level of investment compared to past periods. Factors such as inflation, changes in air traffic volume, technological upgrades, and shifts in operational requirements could all influence historical spending trends and make direct comparisons complex.

What is the track record of Midwest Air Traffic Control Service Inc. with the Federal Aviation Administration and similar contracts?

Assessing the track record of Midwest Air Traffic Control Service Inc. requires reviewing their past performance on contracts with the Federal Aviation Administration (FAA) and other relevant agencies. This would involve examining contract databases for previous awards to this company, looking at contract performance ratings (if publicly available), and identifying any past issues or commendations. For a company specializing in Air Traffic Control (ATC) services, their history with managing complex operations, adhering to safety regulations, and meeting performance metrics would be crucial. A history of successful contract completion and positive performance reviews would indicate reliability, while a record of disputes or failures would raise concerns about their capacity to fulfill this new $51.2M contract effectively.

How does the firm-fixed-price (FFP) structure of this contract influence risk and potential for cost overruns compared to other contract types?

A firm-fixed-price (FFP) contract, like the one awarded for Air Traffic Control services, places the primary responsibility for cost control on the contractor. This means that Midwest Air Traffic Control Service Inc. is obligated to perform the work for the agreed-upon price, regardless of their actual costs. This structure offers significant cost certainty to the government, as the total expenditure is known upfront. However, it shifts the risk of cost overruns to the contractor. If the contractor's costs exceed the fixed price due to unforeseen issues, inefficiencies, or poor estimation, their profit margin will be reduced, or they may incur a loss. Conversely, if they manage costs effectively, their profit will be higher. This contrasts with cost-reimbursement contracts, where the government bears more of the cost risk but typically has more oversight over expenditures.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this Air Traffic Control contract, and how are they monitored?

The specific Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) for this Air Traffic Control contract would be detailed within the Statement of Work (SOW) and the contract itself. Typically, for ATC services, KPIs would focus on critical aspects such as air traffic safety metrics (e.g., incident rates, near-misses), operational efficiency (e.g., on-time departures/arrivals, flow control effectiveness), system availability and uptime, response times to emergencies, and adherence to air traffic procedures. Monitoring these KPIs would likely involve a combination of automated system data, regular performance reviews between the FAA and Midwest Air Traffic Control Service Inc., audits, and potentially third-party evaluations. Failure to meet these KPIs could result in contractual remedies, such as penalties or even termination, depending on the severity.

Given the 'full and open competition' award, what was the range of bids received, and how does the awarded price compare to the government's estimate?

While the award states 'full and open competition,' the specific range of bids received and the government's estimate are not provided in the summary data. To determine if the awarded price of $51.2M represents good value, this information would be crucial. A wide range of bids could indicate varying levels of contractor confidence in cost estimation or differing approaches to service delivery. If the awarded price is significantly lower than the government's estimate, it suggests potential savings for taxpayers. Conversely, if it's close to or exceeds the estimate, it warrants closer scrutiny of the estimate's accuracy and the contractor's pricing strategy. Without these details, it's challenging to definitively assess the price competitiveness beyond the fact that multiple entities participated in the bidding process.

What are the potential risks associated with relying on a single contractor, Midwest Air Traffic Control Service Inc., for critical Air Traffic Control services over a 7-year period?

Relying on a single contractor, Midwest Air Traffic Control Service Inc., for critical Air Traffic Control (ATC) services over a 7-year period presents several potential risks. Firstly, there's the risk of vendor lock-in, where the government becomes highly dependent on the incumbent, potentially reducing leverage in future negotiations or contract renewals. Secondly, if the contractor experiences financial difficulties, operational failures, or a decline in service quality, the impact on national airspace safety and efficiency could be severe, with limited immediate alternatives. Thirdly, a lack of ongoing competition might reduce the incentive for the contractor to innovate or aggressively manage costs throughout the contract term, potentially leading to complacency. Finally, the loss of institutional knowledge within the government regarding the specifics of ATC operations could occur if the contractor manages most of the day-to-day functions.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Air Traffic Control

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: 693KA7-23-R-00003

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7300 W 129TH ST, OVERLAND PARK, KS, 66213

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

Financial Breakdown

Contract Ceiling: $200,838,847

Exercised Options: $51,213,576

Current Obligation: $51,213,576

Actual Outlays: $30,679,900

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline