DoD's $285M MQ-9 Training Contract Awarded to Crew Training International Raises Value Questions

Contract Overview

Contract Amount: $285,010,893 ($285.0M)

Contractor: Crew Training International, Inc

Awarding Agency: Department of Defense

Start Date: 2018-11-07

End Date: 2026-03-31

Contract Duration: 2,701 days

Daily Burn Rate: $105.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MQ9 CAT/CWD AWARD

Place of Performance

Location: HOLLOMAN AFB, OTERO County, NEW MEXICO, 88330

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $285.0 million to CREW TRAINING INTERNATIONAL, INC for work described as: MQ9 CAT/CWD AWARD Key points: 1. The contract's value proposition requires scrutiny given the extensive duration and potential for cost overruns. 2. Competition was limited, raising concerns about price discovery and potential overpayment. 3. The firm-fixed-price structure offers some cost control, but the long performance period introduces risk. 4. Performance context is crucial; understanding the quality and effectiveness of the training delivered is key. 5. This contract positions Crew Training International as a significant provider in the specialized defense training sector. 6. The absence of small business set-asides warrants examination of subcontracting opportunities.

Value Assessment

Rating: questionable

The $285 million award for MQ-9 training over nearly 8 years presents a significant investment. Benchmarking this against similar specialized aviation training contracts is difficult without more granular data on training hours, instructor ratios, and curriculum scope. The firm-fixed-price nature provides some predictability, but the extended period allows for potential inefficiencies to compound. A detailed cost-benefit analysis comparing the delivered training outcomes to the total expenditure is needed to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, specific sources were excluded, potentially limiting the bidder pool. With 8 bidders, the competition level suggests some market interest, but the exclusion criteria need to be understood to gauge the true breadth of competitive pressure. This limited competition may have impacted the final negotiated price.

Taxpayer Impact: The limited competition suggests taxpayers may not have received the most competitive pricing possible, potentially leading to a higher overall cost for the training services.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel requiring MQ-9 Reaper pilot and sensor operator training. The contract delivers essential flight and mission training, crucial for maintaining operational readiness of MQ-9 fleets. Training is expected to occur primarily in New Mexico, impacting the local workforce and economy. This contract supports the specialized skills development of military aviators and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration increases risk of scope creep and price escalation.
Limited competition may have resulted in a suboptimal price for taxpayers.
Lack of transparency regarding excluded sources hinders full assessment of competition.
Performance metrics and quality assurance details are not readily available for public review.

Positive Signals

Firm-fixed-price contract provides cost certainty for the base contract.
Multiple bidders (8) indicate a degree of market interest in this specialized service.
Contract supports critical national defense capabilities (MQ-9 operations).

Sector Analysis

This contract falls within the Defense Training and Simulation sector, a specialized niche within the broader aerospace and defense industry. The market for advanced military training, particularly for unmanned aerial systems like the MQ-9 Reaper, is driven by evolving defense needs and technological advancements. Comparable spending benchmarks are difficult to establish due to the unique nature of platform-specific training, but overall defense training spending is substantial.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that large defense contractors or specialized training firms were the primary targets for this requirement. Consequently, there may be limited direct subcontracting opportunities for small businesses unless mandated by the prime contractor. The impact on the small business ecosystem is likely minimal unless specific subcontracting plans are implemented.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver specified services within budget. Transparency could be enhanced by making performance reports and detailed cost breakdowns publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

MQ-9 Reaper Sustainment Contracts
Unmanned Aerial System Training Programs
Air Force Pilot Training Services
Defense Contractor Performance Evaluations

Risk Flags

Long-term contract duration
Limited competition
Potential for performance degradation over time
Lack of public performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $285.0 million to CREW TRAINING INTERNATIONAL, INC. MQ9 CAT/CWD AWARD

Who is the contractor on this award?

The obligated recipient is CREW TRAINING INTERNATIONAL, INC.

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 $285.0 million.

What is the period of performance?

Start: 2018-11-07. End: 2026-03-31.

What is the track record of Crew Training International, Inc. with similar defense training contracts?

Assessing Crew Training International, Inc.'s track record requires a deeper dive into their past performance on Department of Defense contracts, particularly those involving flight simulation and specialized platform training. Information regarding contract history, past performance evaluations (e.g., CPARS reports), and any history of contract disputes or terminations would be crucial. Without this specific data, it's difficult to definitively gauge their reliability and capability in executing a contract of this magnitude and duration. Publicly available data often focuses on award amounts rather than qualitative performance assessments, making a thorough track record analysis challenging for external analysts.

How does the per-hour training cost compare to industry benchmarks for MQ-9 Reaper training?

Determining the precise per-hour training cost and comparing it to industry benchmarks for MQ-9 Reaper training is challenging with the provided data. The contract value of $285 million is spread over a performance period of approximately 2701 days (around 7.4 years), and the total number of training hours or student throughput is not specified. To establish a benchmark, one would need to know the total projected training hours, the types of training (e.g., initial qualification, recurrent, mission-specific), and instructor-to-student ratios. Industry benchmarks for such specialized training are often proprietary or vary significantly based on location, simulator sophistication, and curriculum complexity. A detailed cost breakdown from the contractor or comparative data from similar Air Force training programs would be necessary for a meaningful comparison.

What are the primary risk indicators associated with this long-term, firm-fixed-price training contract?

The primary risk indicators for this long-term, firm-fixed-price contract revolve around the extended performance period (nearly 8 years) and the potential for unforeseen changes in operational requirements or technology. While firm-fixed-price offers cost certainty, it can also incentivize the contractor to minimize costs in ways that might impact training quality if not rigorously overseen. Risks include potential contractor performance degradation over time, difficulty in adapting the training curriculum to evolving MQ-9 capabilities or threats, and the possibility of the government needing to modify or terminate the contract due to strategic shifts, which can incur termination costs. Furthermore, the long duration increases the likelihood of key personnel turnover within the contractor's organization, potentially impacting training consistency.

How effective is the current training program in preparing MQ-9 aircrews for operational missions?

Assessing the effectiveness of the current training program requires access to performance metrics and outcome data that are typically not publicly disclosed. Key indicators of effectiveness would include MQ-9 mission success rates, aircrew proficiency levels upon completion of training, feedback from operational units on the preparedness of newly trained crews, and potentially data on incidents or accidents related to training deficiencies. The Department of the Air Force likely has internal mechanisms for evaluating training effectiveness, such as formal reviews, pilot debriefs, and operational readiness assessments. Without access to these internal evaluations or specific performance data tied to this contract, determining the program's effectiveness remains speculative.

What has been the historical spending trend for MQ-9 training services by the Department of Defense?

Analyzing historical spending trends for MQ-9 training requires accessing historical contract databases and budget allocations specifically for this platform's training requirements. The Department of Defense's overall spending on unmanned systems training has likely increased significantly over the past decade due to the expanding role of platforms like the MQ-9 Reaper. Specific figures for prior MQ-9 training contracts, including their duration, value, and the contractors involved, would illustrate the evolution of these training needs and associated costs. Trends might show a shift from initial platform fielding training to more advanced, mission-specific, and sustainment-focused training programs as the fleet matures and operational tempo increases.

Industry Classification

NAICS: Educational Services › Technical and Trade Schools › Flight Training

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA489018R0001

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9198 CRESTWYN HILLS DR, MEMPHIS, TN, 38125

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

Financial Breakdown

Contract Ceiling: $292,843,665

Exercised Options: $287,646,606

Current Obligation: $285,010,893

Actual Outlays: $53,434,240

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $55,722,430

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Timeline