DoD's $272M contract with PAE Applied Technologies for air transportation support shows long-term engagement
Contract Overview
Contract Amount: $272,742,623 ($272.7M)
Contractor: PAE Applied Technologies LLC
Awarding Agency: Department of Defense
Start Date: 2008-02-13
End Date: 2018-05-31
Contract Duration: 3,760 days
Daily Burn Rate: $72.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TRANSITION
Place of Performance
Location: NELLIS AFB, CLARK County, NEVADA, 89191
State: Nevada Government Spending
Plain-Language Summary
Department of Defense obligated $272.7 million to PAE APPLIED TECHNOLOGIES LLC for work described as: TRANSITION Key points: 1. Contract duration of 10 years suggests a stable, long-term need for these services. 2. The firm fixed-price structure indicates a defined scope and cost control by the DoD. 3. Awarded under full and open competition, implying a competitive bidding process. 4. The contract's value places it in the mid-to-large tier for support services. 5. Performance in Nevada suggests a focus on specific operational or logistical hubs. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.
Value Assessment
Rating: good
The contract's total value of $272 million over 10 years averages to $27.2 million annually. Without specific benchmarks for 'Other Support Activities for Air Transportation' in Nevada, a direct value-for-money assessment is challenging. However, the duration and firm fixed-price nature suggest a predictable cost structure. Comparing this to similar long-term support contracts within the DoD would provide a clearer picture of its relative value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a healthy level of interest and competition for this requirement. This competitive environment is generally favorable for price discovery and achieving a fair market price for the services rendered.
Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which typically drives down costs and ensures the government receives services at a reasonable price compared to a sole-source or limited competition scenario.
Public Impact
The primary beneficiaries are the Department of Defense and its air transportation operations, ensuring continued support services. Services delivered likely include maintenance, logistics, ground support, and potentially operational assistance for air assets. The geographic impact is concentrated in Nevada, where the contract was performed. Workforce implications include direct employment by PAE Applied Technologies and potential indirect employment through subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (10 years) could lead to complacency or reduced incentive for innovation if not managed actively.
- Firm fixed-price contracts can shift risk to the contractor; however, scope creep or unforeseen issues could still impact costs.
- Lack of explicit small business set-aside raises questions about subcontracting opportunities for smaller firms.
- Performance details and specific metrics are not readily available, making it difficult to assess contractor performance beyond contract completion.
Positive Signals
- Awarded through full and open competition, indicating a robust bidding process.
- Firm fixed-price contract provides cost certainty for the government.
- Long-term nature suggests a consistent and reliable need for the services, indicating program stability.
- PAE Applied Technologies is a known entity in government contracting, suggesting a degree of established capability.
Sector Analysis
The 'Other Support Activities for Air Transportation' category falls within the broader aerospace and defense services sector. This sector is characterized by long-term government contracts, complex logistical requirements, and significant technological integration. The market size for such support services is substantial, driven by the continuous operational needs of military branches. This contract represents a significant portion of spending within this niche, supporting critical Air Force logistics and operations.
Small Business Impact
This contract was not awarded as a small business set-aside, nor does it appear to have specific small business subcontracting goals explicitly stated in the provided data. This suggests that the primary contractor, PAE Applied Technologies, likely handled the majority of the work directly or through larger subcontractors. Further review of subcontracting reports would be necessary to determine the extent of small business participation.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Air Force. Performance monitoring, invoicing review, and compliance checks are standard oversight mechanisms. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Air Transportation Services
- Logistics and Base Support Contracts
- Defense Readiness Support
- Aircraft Maintenance and Operations Support
- Government Support Services
Risk Flags
- Long contract duration may reduce flexibility and incentivize complacency.
- Lack of explicit small business participation data requires further scrutiny.
- Firm fixed-price structure shifts risk but may limit scope adjustment flexibility.
Tags
defense, department-of-defense, air-force, definitive-contract, firm-fixed-price, full-and-open-competition, air-transportation-support, nevada, long-term-contract, pae-applied-technologies
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $272.7 million to PAE APPLIED TECHNOLOGIES LLC. TRANSITION
Who is the contractor on this award?
The obligated recipient is PAE APPLIED TECHNOLOGIES LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $272.7 million.
What is the period of performance?
Start: 2008-02-13. End: 2018-05-31.
What is the historical spending trend for 'Other Support Activities for Air Transportation' by the Department of Defense over the last decade?
Analyzing historical spending trends for 'Other Support Activities for Air Transportation' by the DoD reveals a generally consistent demand for these services, often fluctuating with geopolitical events and operational tempo. While specific figures for this exact category can vary, the overall defense budget allocation towards logistics and support services has remained substantial. Contracts in this domain are often long-term, reflecting the enduring nature of military operations. For instance, prior to this $272M award, the DoD likely had other contracts fulfilling similar roles, potentially with different contractors or varying scopes. Understanding these historical patterns helps contextualize the significance and duration of the PAE Applied Technologies contract, suggesting it aligns with a sustained requirement rather than a temporary surge in need. The average annual spend within this category can provide a benchmark against which this specific contract's value can be assessed for reasonableness over its lifespan.
How does the performance of PAE Applied Technologies on this contract compare to their other DoD contracts?
Assessing the performance of PAE Applied Technologies on this specific $272M contract requires access to detailed performance reports, contractor past performance evaluations, and any contract modifications or disputes. Without this granular data, a direct comparison is difficult. However, PAE Applied Technologies is a large government contractor with a broad portfolio across various agencies, including significant work with the DoD. Their overall track record generally indicates experience in providing complex support services. To compare, one would look at metrics such as on-time delivery, quality of service, cost control adherence, and customer satisfaction ratings across their contracts. A review of their performance on similar long-duration, fixed-price support contracts would be most relevant. Any documented issues, awards, or commendations related to their air transportation support services would provide further insight into their capabilities and reliability in this domain.
What are the key performance indicators (KPIs) used to measure the success of this 'Other Support Activities for Air Transportation' contract?
Key Performance Indicators (KPIs) for a contract like 'Other Support Activities for Air Transportation' are crucial for ensuring the DoD receives the expected value and service quality. While specific KPIs are not detailed in the award data, typical metrics would likely include: aircraft availability rates, response times for logistical support, maintenance turnaround times, safety incident rates (e.g., zero major safety incidents), compliance with environmental regulations, and adherence to operational schedules. For a firm fixed-price contract, KPIs often focus on the successful completion of defined tasks and milestones within the agreed-upon cost and schedule. The government would monitor these KPIs through regular reporting from the contractor and potentially through on-site government representatives. Failure to meet critical KPIs could result in penalties or impact future contract awards.
What is the estimated cost savings or value added by using a firm fixed-price contract for these air transportation support services?
The firm fixed-price (FFP) contract structure for this $272M air transportation support contract is designed to provide significant cost certainty and potential savings for the government. By locking in a price for a defined scope of work over a 10-year period, the DoD transfers most of the cost overrun risk to the contractor, PAE Applied Technologies. This encourages the contractor to manage resources efficiently and control costs proactively to maintain profitability. Potential savings arise from the contractor's incentive to innovate and optimize operations to reduce their own expenses. Conversely, if the scope of work expands significantly beyond what was initially defined, the FFP structure could limit the government's ability to adjust payments without formal contract modifications, potentially leading to less flexibility compared to cost-reimbursement contracts. However, for stable, well-defined services like air transportation support, FFP is often preferred for its predictability.
How does the $272 million contract value compare to the total annual spending on air transportation support services within the Department of Defense?
The $272 million contract value awarded to PAE Applied Technologies represents a significant, long-term investment in air transportation support services for the Department of Defense. To contextualize this figure, one must consider the DoD's overall annual budget for logistics, maintenance, and operational support, which runs into the tens of billions of dollars. While specific line-item spending for 'Other Support Activities for Air Transportation' is not publicly itemized at a granular level across the entire DoD, this single contract, spanning a decade, likely constitutes a substantial portion of the spending for this particular service category within its operational theater (Nevada). It's important to note that the DoD procures a vast array of air support services, from aircraft procurement and major depot maintenance to specialized ground handling and flight operations support. Therefore, while $272M is a large sum, it should be viewed as a significant component within a much larger ecosystem of defense spending.
What are the potential risks associated with a 10-year contract duration for air transportation support services?
A 10-year contract duration for air transportation support services, while offering stability, carries several potential risks. Firstly, there's the risk of technological obsolescence; the technology and methods used in air transportation support could evolve significantly over a decade, potentially making the contracted services outdated or less efficient compared to newer approaches. Secondly, contractor performance could degrade over time due to complacency or a lack of sustained competitive pressure, especially if oversight is not rigorous. Thirdly, market conditions and pricing structures can change dramatically, potentially leading to the government overpaying in later years if the initial fixed price becomes uncompetitive. Lastly, long-term reliance on a single contractor can reduce flexibility for the government to adapt to changing mission requirements or to bring services in-house if deemed more cost-effective. Robust contract management, periodic reviews, and clear performance standards are essential to mitigate these risks.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA486107RC001
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Computer Sciences Corporation (UEI: 009581091)
Address: 6500 W FRWY STE 400, FORT WORTH, TX, 76116
Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $279,958,175
Exercised Options: $279,958,175
Current Obligation: $272,742,623
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-02-13
Current End Date: 2018-05-31
Potential End Date: 2018-05-31 00:00:00
Last Modified: 2018-07-23
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