Vertex Aerospace awarded $156.8M for KC-10 sustainment, with a significant portion for airframe maintenance

Contract Overview

Contract Amount: $156,755,191 ($156.8M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2019-01-01

End Date: 2019-12-31

Contract Duration: 364 days

Daily Burn Rate: $430.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC/KDC 10 CLS AIRFRAME

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $156.8 million to VERTEX AEROSPACE LLC for work described as: KC/KDC 10 CLS AIRFRAME Key points: 1. Contract value indicates substantial investment in maintaining aging KC-10 fleet. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Delivery order structure implies task-based execution rather than a large, upfront project. 5. Focus on airframe maintenance points to critical component longevity needs. 6. Contract duration of one year suggests a need for ongoing, adaptable support.

Value Assessment

Rating: good

The total award of $156.8 million for KC-10 sustainment appears reasonable given the complexity of maintaining large military aircraft. Benchmarking against similar sustainment contracts for comparable airframes would provide a more precise value assessment. The firm fixed-price nature of the contract aims to control costs, but actual value realization depends on the contractor's efficiency and the scope of work performed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally expected to yield better pricing and value for the government. The number of bidders and the specific evaluation criteria would further illuminate the strength of the competition.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The U.S. Air Force benefits from continued operational readiness of its KC-10 Extender fleet. Services include critical airframe maintenance and support activities essential for flight safety and longevity. The contract's impact is primarily national, supporting strategic airlift and refueling capabilities. Workforce implications include skilled aviation mechanics and technicians employed by Vertex Aerospace.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise beyond the scope of the fixed-price agreement.
Dependence on a single contractor for critical sustainment could pose a risk if performance falters.
Aging airframes may present unique and costly maintenance challenges not fully anticipated.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust market response and potential for competitive pricing.
Contract focuses on essential airframe maintenance, addressing a core operational need.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft sustainment and maintenance. The market for military aircraft support is characterized by long-term relationships, specialized technical expertise, and significant government investment. Spending in this area is driven by the need to maintain aging fleets and ensure operational readiness, often involving complex supply chains and highly skilled labor.

Small Business Impact

Information regarding small business subcontracting goals or achievements was not explicitly provided in the data. As this is a large prime contract, there may be opportunities for small businesses to participate as subcontractors, particularly in specialized maintenance or parts supply. Further analysis would be needed to determine the extent of small business involvement.

Oversight & Accountability

Oversight is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price contract type provides a degree of financial oversight by setting a ceiling on costs. Transparency would be enhanced by public reporting on performance metrics and any modifications to the contract.

Related Government Programs

KC-10 Sustainment Programs
Air Mobility Command Aircraft Maintenance
Defense Logistics Agency Aviation Support
Air Force Materiel Command Readiness Contracts

Risk Flags

Potential for cost overruns due to aging airframe complexities.
Contractor performance risk impacting fleet readiness.
Dependency on a single provider for critical sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $156.8 million to VERTEX AEROSPACE LLC. KC/KDC 10 CLS AIRFRAME

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 $156.8 million.

What is the period of performance?

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

What is Vertex Aerospace's track record with similar large-scale aircraft sustainment contracts, particularly for the KC-10 or comparable airframes?

Vertex Aerospace has a history of performing various aviation support services, including maintenance, repair, and overhaul (MRO) for military aircraft. While specific details on their KC-10 sustainment performance under this particular contract require deeper investigation into performance reports and historical data, the company's general experience in the aerospace sector suggests a capacity to handle such requirements. Benchmarking their performance against industry standards and previous contract awards for similar services would be crucial for a comprehensive assessment. Examining past contract awards, any reported issues or successes, and client feedback would provide a clearer picture of their reliability and expertise in managing complex sustainment programs.

How does the awarded amount of $156.8 million compare to historical spending on KC-10 sustainment or similar air refueling tanker maintenance contracts?

The $156.8 million award for KC-10 sustainment represents a significant investment, but its value proposition needs to be contextualized against historical spending patterns. To assess this, one would compare this figure to previous years' spending on KC-10 sustainment, factoring in inflation and any changes in the scope of work or fleet size. Additionally, benchmarking against sustainment contracts for other large military aircraft, such as the KC-135 Stratotanker or C-17 Globemaster III, can provide comparative insights. If this award is higher than historical averages or comparable contracts, it might indicate increased maintenance needs, higher component costs, or a more competitive market response. Conversely, if it aligns with or is lower than benchmarks, it could suggest efficient contracting or favorable market conditions.

What are the primary risk indicators associated with this contract, considering the age of the KC-10 fleet and the nature of airframe maintenance?

Key risk indicators for this contract revolve around the aging KC-10 fleet and the inherent complexities of airframe maintenance. The age of the aircraft increases the likelihood of discovering unforeseen structural issues or component failures, potentially leading to scope creep and cost overruns, even under a fixed-price contract. Performance risk is also present; if Vertex Aerospace lacks the necessary expertise or resources, or if their supply chain is disrupted, it could impact the fleet's readiness. Furthermore, the reliance on a single contractor for critical sustainment creates a dependency risk. Changes in military requirements or budget constraints could also impact the long-term viability and funding of sustainment efforts. Effective risk mitigation would involve robust inspection protocols, contingency planning for unexpected repairs, and strong contract oversight.

How effective is the firm fixed-price contract type in ensuring program effectiveness and value for money for airframe sustainment?

The firm fixed-price (FFP) contract type is generally considered effective in controlling costs and ensuring value for money when the scope of work is well-defined and stable. For airframe sustainment, where unforeseen issues can arise, FFP shifts the risk of cost overruns to the contractor. This incentivizes the contractor to be efficient and manage resources effectively. However, if significant, unanticipated maintenance needs emerge, the contractor might face financial strain, potentially impacting quality or leading to requests for contract modifications. The effectiveness hinges on the accuracy of the initial scope definition and the contractor's ability to absorb minor variances. For complex sustainment, a cost-plus contract with incentives might sometimes offer better flexibility, but FFP provides greater cost certainty for the government if managed properly.

What are the implications of this contract award on the overall readiness and operational capability of the U.S. Air Force's air refueling and strategic airlift assets?

This contract is crucial for maintaining the operational readiness and capability of the KC-10 Extender fleet, which serves as a vital asset for air refueling and strategic airlift. The KC-10 plays a critical role in extending the range and endurance of combat aircraft and enabling global power projection. By ensuring the airframes are maintained to high standards, this contract directly supports the Air Force's ability to execute its missions effectively. A well-maintained fleet reduces the risk of mission aborts due to mechanical failures and ensures that these large, complex aircraft are available when needed. The success of this sustainment effort directly translates to the Air Force's overall strategic reach and its capacity to respond to global security challenges.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $156,755,191

Exercised Options: $156,755,191

Current Obligation: $156,755,191

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810516D0003

IDV Type: IDC

Timeline