DoD awards $96.6M for aircraft parts, with King Aerospace Inc. securing the contract

Contract Overview

Contract Amount: $96,650,159 ($96.7M)

Contractor: King Aerospace, Inc.

Awarding Agency: Department of Defense

Start Date: 2000-12-21

End Date: 2013-02-28

Contract Duration: 4,452 days

Daily Burn Rate: $21.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: PANAMA CITY, BAY County, FLORIDA, 32401

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $96.7 million to KING AEROSPACE, INC. for work described as: Key points: 1. Contract value of $96.6M over 12 years suggests significant long-term support needs. 2. The contract was awarded under full and open competition after excluding sources, indicating a specific justification for limited initial bidding. 3. The duration of the contract (4452 days) points to a need for sustained and reliable service delivery. 4. The firm-fixed-price contract type aims to transfer risk to the contractor, potentially stabilizing costs. 5. Awarded by the Department of Defense, this contract likely supports critical aviation readiness. 6. The North American Industry Classification System (NAICS) code 336413 indicates a focus on aircraft parts manufacturing and support.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the aircraft parts or services procured. The total award of $96.6 million over approximately 12 years averages to about $8 million annually. This figure needs to be compared against the cost of similar parts or support services for comparable aircraft fleets. The firm-fixed-price nature of the contract suggests an attempt to control costs, but the long duration could introduce risks if market prices for components or labor fluctuate significantly. Without more granular data on unit costs or performance metrics, a definitive value-for-money assessment remains difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This designation implies that while the competition was intended to be open, specific sources were excluded prior to the solicitation. The exact reasons for this exclusion are not detailed but could stem from national security concerns, proprietary technology, or specific performance requirements that only a limited number of entities could meet. The number of bidders is not specified, but the 'exclusion of sources' suggests a potentially narrower field than a truly unrestricted full and open competition.

Taxpayer Impact: The exclusion of sources prior to competition may limit the potential for the most competitive pricing, as the pool of eligible bidders was intentionally reduced. Taxpayers may not benefit from the broadest possible price discovery in such scenarios.

Public Impact

The primary beneficiaries are likely military aviation units within the Department of Defense, ensuring the availability of critical aircraft parts. Services delivered include the manufacturing and supply of aircraft parts, crucial for maintaining operational readiness. The geographic impact is likely national, supporting DoD operations across various bases and deployments. Workforce implications include jobs in aerospace manufacturing and support within the contractor's facilities and potentially its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method raises questions about whether the most competitive pricing was achieved.
The long contract duration (over 12 years) could lead to cost overruns if market conditions change unfavorably.
Lack of specific details on the parts or services makes it difficult to assess the true value for money.

Positive Signals

The firm-fixed-price contract type shifts cost overrun risk to the contractor.
Awarding under a competitive process, even with exclusions, is generally preferable to sole-source.
The contract supports critical Department of Defense aviation needs, contributing to national security.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for such components is highly specialized, often requiring stringent quality control, certifications, and adherence to military specifications. Companies operating in this space typically have significant R&D investments and long-standing relationships with government agencies. Comparable spending benchmarks would involve analyzing other contracts for similar aircraft parts or maintenance, repair, and overhaul (MRO) services within the DoD or allied nations.

Small Business Impact

The data indicates that small business participation (sb) was false, and there is no indication of a small business set-aside. This suggests the contract was not specifically targeted towards small businesses. Consequently, the direct impact on the small business ecosystem may be limited unless King Aerospace, Inc. utilizes small businesses within its supply chain for subcontracting. Further investigation into subcontracting plans would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, likely involving the Defense Contract Management Agency (DCMA) given its role in contract administration. Accountability measures are embedded in the firm-fixed-price contract type, which incentivizes the contractor to meet performance and delivery requirements within the agreed-upon price. Transparency is generally facilitated through contract databases like FPDS, although detailed performance reports or audit findings may not always be publicly accessible.

Related Government Programs

Aircraft Parts Procurement
Defense Aviation Support
Aerospace Manufacturing Contracts
Military Aircraft Maintenance

Risk Flags

Competition Method Concerns
Long-Term Contract Risk
Lack of Specific Part Details

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $96.7 million to KING AEROSPACE, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is KING AEROSPACE, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $96.7 million.

What is the period of performance?

Start: 2000-12-21. End: 2013-02-28.

What specific types of aircraft parts are covered under this $96.6 million contract, and what is the historical performance record of King Aerospace, Inc. in supplying these or similar components?

The provided data indicates the NAICS code is 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing), suggesting the contract pertains to specialized components for aircraft. However, the specific part numbers or categories are not detailed. King Aerospace, Inc. has a history of providing aircraft maintenance, repair, and overhaul (MRO) services, as well as manufacturing components. Their track record would need to be assessed through performance reports (e.g., Contractor Performance Assessment Reporting System - CPARS) and any past issues related to quality, delivery, or cost overruns on previous DoD contracts. Without access to these specific performance metrics, a full assessment of their suitability for this particular contract is limited.

How does the average annual value of this contract ($~8 million) compare to other DoD contracts for similar aircraft parts or support services?

Comparing the average annual value of approximately $8 million requires benchmarking against contracts for similar aircraft platforms or component types. For instance, if this contract supports a high-volume training aircraft, $8 million annually might be considered moderate. However, if it pertains to specialized components for high-end fighter jets or bombers, this annual value could be relatively low, potentially indicating a smaller scope or a highly efficient supply chain. A comprehensive analysis would involve querying contract databases for awards with similar NAICS codes, contract types, and agencies, focusing on the value and duration to establish a relevant market comparison.

What were the specific reasons for excluding certain sources prior to the 'full and open competition' for this contract, and what impact did this have on the final price?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that the contracting agency identified a need but determined that only a subset of potential sources could meet specific requirements, or that certain sources were excluded for reasons such as national security, proprietary data, or unique capabilities. The precise justification for exclusion is not provided in the summary data. This exclusion likely narrowed the competitive field, potentially leading to less downward pressure on pricing than if all capable sources had been allowed to bid. The impact on the final price is difficult to quantify without knowing the number of bidders and the nature of the excluded sources.

Given the 12-year duration, what mechanisms are in place to manage potential cost increases due to inflation or supply chain volatility for the aircraft parts?

The firm-fixed-price (FFP) contract structure places the primary responsibility for managing cost fluctuations on the contractor, King Aerospace, Inc. However, FFP contracts can sometimes include economic price adjustment (EPA) clauses, particularly for long-duration contracts, which allow for adjustments based on specific indices (e.g., labor, material costs). Without explicit details on whether EPA clauses are included, it's assumed the contractor factored potential volatility into their initial bid. Robust oversight by the Defense Contract Management Agency (DCMA) would monitor the contractor's cost management and adherence to contract terms, including any provisions for price adjustments.

What is the anticipated impact of this contract on the readiness and operational capability of the specific military aircraft fleet it supports?

This contract is crucial for ensuring the sustained operational readiness of the military aircraft fleet it serves. By securing a long-term supply of necessary parts, the Department of Defense mitigates the risk of grounding aircraft due to component shortages. The timely delivery of quality parts directly impacts the availability of aircraft for training, deployment, and mission execution. The $96.6 million award over 12 years suggests a significant and ongoing need, underscoring the importance of these parts to the overall effectiveness and capability of the supported aviation assets.

How does the spending on this specific contract compare to the overall DoD budget allocated for aircraft parts and maintenance over the contract's period?

The $96.6 million contract represents a portion of the Department of Defense's broader budget for aircraft parts and maintenance. DoD's annual budget for sustainment, logistics, and procurement is in the tens of billions of dollars. This specific contract, averaging roughly $8 million per year, is likely a component supporting a particular aircraft type or system. To assess its relative significance, one would need to compare it against the total allocated funds for the specific aircraft program or the broader category of 'Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) across the DoD's spending portfolio during the contract's lifespan.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Faith Enterprises, Inc (UEI: 877470385)

Address: HANGER 5, BLDG 227, RM 217, TYNDALL AFB, TX

Business Categories: Category Business, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline