Vertex Aerospace LLC awarded $137M for KC-10 sustainment, highlighting ongoing defense logistics needs

Contract Overview

Contract Amount: $136,979,666 ($137.0M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2020-12-28

End Date: 2022-06-30

Contract Duration: 549 days

Daily Burn Rate: $249.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC-10

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $137.0 million to VERTEX AEROSPACE LLC for work described as: KC-10 Key points: 1. Contract value represents significant investment in maintaining critical aerial refueling capabilities. 2. Full and open competition suggests a robust market for defense sustainment services. 3. Fixed-price contract structure aims to control costs and provide predictable spending. 4. Contract duration of 549 days indicates a medium-term need for these services. 5. Awarded by the Defense Contract Management Agency, underscoring rigorous oversight. 6. Focus on sustainment points to the importance of lifecycle management for aging aircraft fleets.

Value Assessment

Rating: good

The contract value of approximately $137 million for KC-10 sustainment appears reasonable given the complexity of maintaining aging military aircraft. Benchmarking against similar sustainment contracts for large military platforms would provide a more precise value-for-money assessment. The firm fixed-price nature of the award suggests an effort to contain costs, but actual value depends on the efficiency of Vertex Aerospace's execution and the scope of services delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors were invited to bid. This approach generally fosters a competitive environment, driving down prices and encouraging innovation. The specific number of bidders is not provided, but the designation suggests a healthy level of market interest and capability for providing these specialized aerospace support services.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and better service quality due to market pressures. This method ensures that the government is not locked into a single provider, promoting efficiency and cost-effectiveness.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the KC-10 Extender aircraft, ensuring their continued operational readiness. Services delivered likely include maintenance, repair, overhaul, and logistical support for the KC-10 fleet. Geographic impact is national, supporting a critical asset for global power projection. Workforce implications include employment opportunities for skilled aerospace technicians and support staff at Vertex Aerospace and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise with the aging KC-10 fleet.
Dependence on a single contractor for critical sustainment could pose supply chain risks.
Ensuring consistent quality of service across the contract duration requires diligent oversight.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive market and potential for value.
Award to Vertex Aerospace, a known entity in aerospace support, indicates a degree of confidence in their capabilities.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft sustainment and support services. The market for military aircraft maintenance is substantial, driven by the need to keep aging fleets operational. Comparable spending benchmarks would involve analyzing other large sustainment contracts for strategic airlift or refueling aircraft, where costs are influenced by fleet size, aircraft age, and complexity of systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large business, Vertex Aerospace LLC. Further analysis would be needed to determine if Vertex Aerospace has a robust small business subcontracting plan in place to ensure opportunities within the small business ecosystem.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Oversight mechanisms likely include regular performance reviews, audits, and inspections. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

KC-10 Extender Aircraft Operations
Air Mobility Command Sustainment Programs
Defense Logistics Agency Support Contracts
Aerospace Maintenance and Repair Services

Risk Flags

Aging Aircraft Fleet
Supply Chain Dependency
Cost Overrun Potential
Technical Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $137.0 million to VERTEX AEROSPACE LLC. KC-10

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 $137.0 million.

What is the period of performance?

Start: 2020-12-28. End: 2022-06-30.

What is Vertex Aerospace LLC's track record with similar defense sustainment contracts?

Vertex Aerospace LLC has a history of providing aviation maintenance, repair, and overhaul (MRO) services to various government and commercial clients. Their experience often includes work on military aircraft, though specific details on the scale and scope of past KC-10 related contracts are not immediately available from this data point alone. A deeper dive into their contract history would reveal their performance on similar large-scale sustainment programs, including on-time delivery, budget adherence, and quality metrics. Their ability to secure this significant award suggests a demonstrated capability and a positive performance record with the Department of Defense or other relevant agencies.

How does the $137 million award compare to historical spending on KC-10 sustainment?

To accurately compare this $137 million award to historical spending on KC-10 sustainment, one would need to examine prior contract awards for the KC-10 program over several years. This would involve looking at the total annual spending on maintenance, repair, and logistics for the KC-10 fleet. Factors such as inflation, changes in operational tempo, and the aging of the aircraft would influence year-over-year spending. Without historical data, it's difficult to definitively state if this award represents an increase, decrease, or stable level of investment. However, the substantial amount suggests a continued significant commitment to maintaining this aging asset.

What are the primary risks associated with sustaining an aging aircraft fleet like the KC-10?

Sustaining an aging aircraft fleet like the KC-10 presents several key risks. Firstly, the increasing age of components leads to a higher likelihood of unexpected failures and the need for more frequent and extensive repairs, potentially driving up costs beyond initial projections. Secondly, the availability of spare parts can become a challenge as older models are phased out of production, necessitating specialized manufacturing or reliance on limited secondary markets. Thirdly, technological obsolescence means that some systems may no longer meet current operational or safety standards, requiring costly upgrades or modifications. Finally, the specialized knowledge required to maintain these older aircraft may diminish over time, posing a risk to workforce expertise.

How effective is a firm fixed-price contract in managing costs for complex aerospace sustainment?

A firm fixed-price (FFP) contract is generally considered effective in managing costs for complex aerospace sustainment because it shifts the primary cost risk to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to be efficient, control their expenses, and manage resources effectively to maximize profit. For the government, it provides budget certainty. However, for highly complex or uncertain projects, contractors may build in significant contingency into their pricing to cover potential risks, which could lead to a higher initial price compared to other contract types. Effective management also relies on clear scope definition to prevent disputes.

What is the typical duration for contracts of this nature and value?

Contracts for complex aerospace sustainment, especially those involving significant dollar values like $137 million, often have durations ranging from one to five years. This particular contract has a duration of 549 days (approximately 1.5 years), which falls within the typical range for a delivery order or a specific sustainment phase. Longer durations (multi-year contracts) are sometimes awarded for major platform sustainment to ensure continuity and leverage economies of scale, but shorter durations can allow for more frequent re-competition and adaptation to changing needs or technologies. The 549-day period suggests a focused effort on a defined scope of work within a larger sustainment strategy.

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: $136,979,666

Exercised Options: $136,979,666

Current Obligation: $136,979,666

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810516D0003

IDV Type: IDC

Timeline