Vertex Aerospace awarded $210M for KC/KDC-10 airframe sustainment, a significant investment in aging aircraft support

Contract Overview

Contract Amount: $209,826,382 ($209.8M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2017-10-01

End Date: 2019-12-31

Contract Duration: 821 days

Daily Burn Rate: $255.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC/KDC-10 AIRFRAME CLS

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $209.8 million to VERTEX AEROSPACE LLC for work described as: KC/KDC-10 AIRFRAME CLS Key points: 1. Value for money appears fair given the specialized nature of sustaining older aircraft platforms. 2. Competition dynamics were favorable, indicating a robust bidding process for this critical service. 3. Risk indicators are moderate, primarily related to the age of the aircraft and potential for unforeseen maintenance needs. 4. Performance context suggests a focus on maintaining operational readiness for a vital, albeit aging, asset. 5. Sector positioning places this contract within the broader aerospace and defense sustainment market.

Value Assessment

Rating: good

The contract value of approximately $210 million for sustainment services over two years is substantial. Benchmarking against similar sustainment contracts for legacy aircraft platforms is challenging due to the unique nature of the KC/KDC-10 fleet. However, the firm-fixed-price structure suggests an effort to control costs. The award amount appears reasonable when considering the specialized expertise and resources required for maintaining these specific airframes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were able to bid. The specific number of bidders is not provided, but the designation suggests a competitive environment that should theoretically drive favorable pricing. The open competition is a positive sign for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it maximizes the pool of potential offerors, fostering a competitive environment that can lead to lower prices and better value.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the KC/KDC-10 aircraft, ensuring their continued operational capability. Services delivered include essential airframe sustainment, maintenance, and repair to keep these aircraft flying. The geographic impact is likely concentrated around the operating bases of the KC/KDC-10 fleet, primarily within the United States. Workforce implications include the employment of skilled aerospace technicians, engineers, and support staff involved in aircraft maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unexpected structural issues arise in aging airframes.
Dependence on a single contractor for critical sustainment could pose a risk if performance degrades.
Availability of specialized parts for legacy aircraft may become a challenge over time.

Positive Signals

Firm-fixed-price contract structure helps to contain costs and provides budget predictability.
Awarded under full and open competition, suggesting a competitive market for these services.
Vertex Aerospace's experience in aerospace sustainment likely contributes to efficient service delivery.

Sector Analysis

The aerospace sustainment sector is critical for maintaining the operational readiness of military fleets. This contract falls within the broader defense logistics and MRO (Maintenance, Repair, and Overhaul) market. Spending in this area is often substantial due to the high cost of specialized labor, parts, and facilities required for complex aircraft. Comparable spending benchmarks are difficult to pinpoint without more specific contract details, but sustainment for large, aging aircraft fleets typically represents a significant portion of defense aviation budgets.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it appear to have explicit subcontracting requirements for small businesses mentioned. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless Vertex Aerospace actively engages small businesses as subcontractors. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the firm-fixed-price contract terms, requiring Vertex Aerospace to deliver services within the agreed-upon budget. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed spending breakdowns may not always be publicly available.

Related Government Programs

Airframe Sustainment Programs
Legacy Aircraft Maintenance
Defense Logistics Support
Aerospace MRO Services
KC-135 Stratotanker Sustainment
C-17 Globemaster III Sustainment

Risk Flags

Aging Aircraft Fleet
Potential for Unforeseen Maintenance
Specialized Parts Availability
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $209.8 million to VERTEX AEROSPACE LLC. KC/KDC-10 AIRFRAME CLS

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $209.8 million.

What is the period of performance?

Start: 2017-10-01. End: 2019-12-31.

What is Vertex Aerospace LLC's track record with similar large-scale aircraft sustainment contracts?

Vertex Aerospace LLC has a history of providing aviation maintenance, repair, and overhaul (MRO) services. While specific details on contracts of this exact magnitude and for these specific airframes may vary, the company's general experience in supporting military aircraft suggests a foundational capability. Publicly available data often highlights their involvement in various sustainment efforts across different platforms. A deeper dive into their contract history, including past performance reviews and any reported issues, would provide a more comprehensive understanding of their reliability and expertise in managing complex, long-term sustainment programs like the KC/KDC-10 airframe CLS.

How does the awarded amount of $210 million compare to historical spending on KC/KDC-10 sustainment?

Direct historical spending comparisons for KC/KDC-10 airframe sustainment are not readily available in the provided data. However, the $210 million award over approximately two years (from late 2017 to late 2019) represents a significant annual investment, likely in the range of $100 million per year. This figure should be contextualized against the operational tempo, age of the fleet, and the scope of sustainment services required. Without prior contract values for similar sustainment efforts on this specific platform, it's difficult to definitively state if this amount is higher or lower than historical norms, but it indicates a substantial commitment to maintaining these aging assets.

What are the primary risk indicators associated with sustaining aging KC/KDC-10 airframes?

The primary risk indicators associated with sustaining aging KC/KDC-10 airframes revolve around the inherent challenges of maintaining older technology and structures. These include the potential for unforeseen structural fatigue, the increasing scarcity and cost of specialized replacement parts, and the need for highly specialized technical expertise that may be diminishing. Furthermore, the operational tempo and mission requirements can place additional stress on aging components, increasing the likelihood of unexpected failures. The complexity of integrating modern avionics or systems onto older airframes can also introduce technical risks and cost escalations.

How effective is the firm-fixed-price (FFP) contract type in managing costs for aircraft sustainment?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs in aircraft sustainment, especially when the scope of work is well-defined. It shifts the risk of cost overruns to the contractor, Vertex Aerospace in this case, providing budget certainty for the government. This structure incentivizes the contractor to perform efficiently and control their own costs. However, for sustainment of aging platforms where unforeseen issues can arise, an FFP contract might lead to the contractor being less forthcoming about potential problems to avoid absorbing unexpected costs, or it could result in scope disputes if the definition of 'sustainment' is not meticulously detailed. Despite these potential drawbacks, FFP is often preferred for its cost control benefits.

What is the expected impact of this contract on the operational readiness of the KC/KDC-10 fleet?

This contract is expected to have a positive impact on the operational readiness of the KC/KDC-10 fleet by ensuring that these critical aircraft receive the necessary maintenance, repair, and sustainment services. The $210 million award over roughly two years signifies a substantial investment aimed at prolonging the service life and maintaining the airworthiness of these aging platforms. By addressing airframe structural integrity, component wear, and overall system functionality, the contract directly supports the Air Force's ability to deploy and utilize these aircraft for their intended missions, thereby enhancing overall fleet readiness.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vertex Aerospace Services Corp.

Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $209,826,382

Exercised Options: $209,826,382

Current Obligation: $209,826,382

Actual Outlays: $1,281,180

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810516D0003

IDV Type: IDC

Timeline