DOJ's $10.4M aircraft lease for US Marshals Service shows high per-unit cost for short-term rental

Contract Overview

Contract Amount: $10,411,557 ($10.4M)

Contractor: Sundowner Oklahoma City, LLC

Awarding Agency: Department of Justice

Start Date: 2007-10-15

End Date: 2008-07-18

Contract Duration: 277 days

Daily Burn Rate: $37.6K/day

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 154575 -LEASE OF TWO LARGE AIRCRAFT ON AN AIRCRAFT, INSURANCE, MAINTENANCE (AIM) / "DRY" BASIS

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85212

State: Arizona Government Spending

Plain-Language Summary

Department of Justice obligated $10.4 million to SUNDOWNER OKLAHOMA CITY, LLC for work described as: 154575 -LEASE OF TWO LARGE AIRCRAFT ON AN AIRCRAFT, INSURANCE, MAINTENANCE (AIM) / "DRY" BASIS Key points: 1. Lease of two large aircraft on an "all-inclusive" basis (AIM) for a period of 277 days. 2. The contract was awarded as a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 3. The total value of the delivery order was approximately $10.4 million. 4. The contract was awarded to SUNDOWNER OKLAHOMA CITY, LLC. 5. The primary purpose appears to be short-term aviation support for the U.S. Marshals Service. 6. The contract was a Firm Fixed Price type, indicating a set cost regardless of performance. 7. The contract was awarded in October 2007 and completed in July 2008.

Value Assessment

Rating: questionable

The total value of $10.4 million for a 277-day lease of two large aircraft appears high, especially considering the short duration. Without specific details on aircraft type, utilization, and included services (insurance, maintenance), a direct comparison is difficult. However, the per-unit cost suggests a premium for the convenience and comprehensive nature of the AIM lease.

Cost Per Unit: Approximately $5.2 million per aircraft for a 9-month lease. This is likely on the higher end for aircraft leasing, particularly if the aircraft were not specialized or mission-critical for the entire period.

Competition Analysis

Competition Level: unknown

The provided data indicates this was a 'DELIVERY ORDER' under a larger contract, but the competition details for the original IDIQ or this specific order are not fully specified. If it was competed as part of a broader IDIQ, the level of competition for the initial award would be key. If this delivery order was competed separately, the number of bidders and the process would determine price discovery.

Taxpayer Impact: The lack of clear competition information makes it difficult to assess if taxpayers received the best possible price for these aircraft leases.

Public Impact

The U.S. Marshals Service benefited from the lease, likely for transportation or operational support. The services delivered included the lease of two large aircraft with insurance and maintenance. The geographic impact is not specified but likely related to the operational areas of the U.S. Marshals Service. Workforce implications are minimal, as the contract is for aircraft lease rather than personnel services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High cost per aircraft for a relatively short lease period.
Limited transparency on the specific type of aircraft and their utilization.
Unclear competition details for the delivery order, potentially impacting value for money.

Positive Signals

Contract provided comprehensive services including insurance and maintenance, reducing administrative burden.
Firm Fixed Price contract offered cost certainty for the agency.
The lease fulfilled a specific, likely time-sensitive, operational need for the U.S. Marshals Service.

Sector Analysis

The aviation services sector is diverse, ranging from commercial airlines to specialized charter and leasing companies. Government agencies often utilize leasing for flexibility and to avoid the capital expenditure and long-term commitment of aircraft ownership. Benchmarking this lease against similar government or commercial leases for large aircraft with full support would be necessary for a precise value assessment.

Small Business Impact

There is no indication that this contract involved small business set-asides or significant subcontracting opportunities for small businesses. The primary contractor, SUNDOWNER OKLAHOMA CITY, LLC, is not explicitly identified as a small business in the provided data.

Oversight & Accountability

As a delivery order under a larger contract, oversight would likely fall under the existing framework of the parent IDIQ contract. The U.S. Marshals Service would be responsible for monitoring performance and ensuring compliance. Transparency regarding the specific terms and justification for the lease could be enhanced.

Related Government Programs

U.S. Marshals Service Aviation Program
General Services Administration (GSA) Vehicle Acquisition
Department of Justice Aircraft Operations

Risk Flags

High Cost
Limited Competition Transparency
Short Duration Lease

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $10.4 million to SUNDOWNER OKLAHOMA CITY, LLC. 154575 -LEASE OF TWO LARGE AIRCRAFT ON AN AIRCRAFT, INSURANCE, MAINTENANCE (AIM) / "DRY" BASIS

Who is the contractor on this award?

The obligated recipient is SUNDOWNER OKLAHOMA CITY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (U.S. Marshals Service).

What is the total obligated amount?

The obligated amount is $10.4 million.

What is the period of performance?

Start: 2007-10-15. End: 2008-07-18.

What specific type of large aircraft were leased, and what were their typical missions for the U.S. Marshals Service during this period?

The provided data does not specify the exact type of large aircraft leased. The U.S. Marshals Service utilizes aviation assets for a variety of missions, including fugitive apprehension, witness protection, prisoner transport, and general operational support across vast geographic areas. The 'large aircraft' designation suggests a capacity for significant payload or passenger numbers, potentially indicating aircraft like regional jets or larger turboprops. Without this detail, assessing the appropriateness of the cost and the necessity of the lease for specific missions remains challenging.

How does the per-unit cost of this lease compare to market rates for similar aircraft leases with full maintenance and insurance in 2007-2008?

The per-unit cost of approximately $5.2 million per aircraft for a 9-month lease is substantial. Benchmarking this against market rates from 2007-2008 requires detailed information on aircraft type, age, utilization hours, and the specific terms of the AIM (Aircraft, Insurance, Maintenance) package. Generally, full-service leases command a premium. However, for large aircraft, this rate could be competitive if it included high utilization guarantees or specialized configurations. A comprehensive market analysis would be needed to definitively state if this was above, below, or in line with prevailing rates for comparable leases during that period.

What was the justification for using a delivery order for aircraft leasing rather than a more competitive procurement method?

The data indicates this was a 'DELIVERY ORDER' awarded under a pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract. The justification for using a delivery order typically stems from the flexibility and efficiency offered by IDIQ vehicles, especially for anticipated but variable needs. If the original IDIQ contract was competitively awarded, then subsequent delivery orders under that contract are a standard procurement method. However, the level of competition for the original IDIQ and whether this specific delivery order was subject to further competition among IDIQ holders would determine the extent of price discovery achieved for this particular lease.

What were the primary risks associated with this contract, and how were they mitigated?

Key risks for this contract likely included operational risks (e.g., aircraft availability, maintenance downtime impacting mission readiness), financial risks (e.g., cost overruns if not truly fixed price, or the high cost itself being a risk if value was not realized), and performance risks (e.g., contractor failing to meet service level agreements for maintenance or insurance). Mitigation strategies would typically involve robust contract language defining service level agreements, performance metrics, clear invoicing and payment terms, and potentially penalties for non-performance. The U.S. Marshals Service would also have oversight responsibilities to monitor the contractor's adherence to the contract terms.

What is the historical spending pattern for aircraft leasing by the U.S. Marshals Service or the Department of Justice?

The provided data only covers this single delivery order. To understand historical spending patterns, one would need to analyze broader contract databases for the U.S. Marshals Service and the Department of Justice over several fiscal years. This would involve identifying all contracts related to aircraft leasing, charter services, and potentially aircraft acquisition or maintenance. Analyzing trends in contract volume, total spending, average contract values, and the types of services procured would reveal patterns and inform whether this $10.4 million lease was an outlier or part of a consistent strategy.

Industry Classification

NAICS: Retail Trade › Other Miscellaneous Store Retailers › All Other Miscellaneous Store Retailers (except Tobacco Stores)

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Contractor Details

Address: 5900 AIR CARGO DR, OKLAHOMA CITY, OK, 73159

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $31,356,432

Exercised Options: $16,903,559

Current Obligation: $10,411,557

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS07F9204S

IDV Type: FSS

Timeline