DoD's $735M COMBS Contract with Vertex Aerospace: Fair Value or Overpriced?
Contract Overview
Contract Amount: $734,817,216 ($734.8M)
Contractor: Vertex Aerospace LLC
Awarding Agency: Department of Defense
Start Date: 2009-07-31
End Date: 2019-05-15
Contract Duration: 3,575 days
Daily Burn Rate: $205.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T-1 CONTRACTOR OPERATED AND MAINTAINED BASE SUPPLY (COMBS)
Place of Performance
Location: MADISON, MADISON County, MISSISSIPPI, 39110
Plain-Language Summary
Department of Defense obligated $734.8 million to VERTEX AEROSPACE LLC for work described as: T-1 CONTRACTOR OPERATED AND MAINTAINED BASE SUPPLY (COMBS) Key points: 1. Contract Value: $734.8M over 9.9 years. 2. Competition: Full and open competition. 3. Risk: Firm Fixed Price contract, potential for cost overruns if scope changes. 4. Sector: Defense logistics and support services.
Value Assessment
Rating: fair
The contract's total value of $734.8M over nearly 10 years suggests a significant investment. Without specific per-unit cost data or comparison to similar COMBS contracts, assessing precise value for money is challenging. The firm fixed price structure aims to control costs, but the sheer scale warrants scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and can lead to more favorable pricing for the government. However, the long duration and complexity of COMBS services may limit the number of truly competitive bids.
Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently. However, the long-term nature and potential for scope creep could impact overall taxpayer value.
Public Impact
Ensures critical base supply operations for the Department of Defense. Supports military readiness by maintaining essential logistics. Impacts personnel and operations at multiple military installations. Potential for job creation and economic activity in Mississippi.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Long contract duration (9.9 years) increases risk of price escalation or obsolescence.
- Lack of detailed performance metrics makes value assessment difficult.
- Firm Fixed Price can incentivize cost-cutting that may impact quality if not monitored.
Positive Signals
- Full and open competition should drive competitive pricing.
- Definitive contract provides a clear framework for services.
- Experienced contractor likely possesses specialized knowledge.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on logistics and base support. Spending in this area is critical for military operations, with benchmarks often tied to operational tempo and force structure. The $735M value is substantial, reflecting the comprehensive nature of COMBS.
Small Business Impact
The data indicates the prime contractor is Vertex Aerospace LLC, and the 'sb' field is false, suggesting no specific small business subcontracting goals were mandated or met in this prime contract award. Further analysis would be needed to determine if small businesses are involved further down the supply chain.
Oversight & Accountability
The Defense Contract Management Agency (DCMA) is responsible for oversight. Given the contract's value and duration, robust oversight is crucial to ensure performance, manage risks, and verify that the services provided align with the firm fixed price and deliver value to the taxpayer.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- High contract value ($734.8M).
- Long contract duration (9.9 years).
- Potential for scope creep impacting cost.
- Lack of detailed performance metrics.
- Firm Fixed Price risk for long-term services.
Tags
other-support-activities-for-air-transpo, department-of-defense, ms, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $734.8 million to VERTEX AEROSPACE LLC. T-1 CONTRACTOR OPERATED AND MAINTAINED BASE SUPPLY (COMBS)
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 $734.8 million.
What is the period of performance?
Start: 2009-07-31. End: 2019-05-15.
How does the per-unit cost of services under this COMBS contract compare to industry benchmarks or similar government contracts?
Without specific per-unit cost breakdowns or access to comparable contract data, a direct benchmark comparison is not feasible. The total contract value of $734.8M spread over potentially millions of units or service hours makes isolated per-unit analysis difficult. Future analysis should seek detailed cost data to validate pricing efficiency against industry standards.
What are the primary risks associated with the firm fixed price (FFP) structure for this extensive logistics support contract?
The primary risk of an FFP structure for a long-duration, complex contract like COMBS is that the contractor may face unforeseen cost increases (e.g., labor, materials, regulatory changes) that erode profit margins, potentially leading to pressure to reduce quality or scope. Conversely, if costs are lower than anticipated, the government might overpay if the initial price was not accurately set.
How effectively does this contract support the Department of Defense's mission readiness and operational goals?
The COMBS contract is designed to ensure the continuous operation of base supply functions, which are fundamental to military readiness. By outsourcing these critical logistics tasks, the DoD can focus on core warfighting capabilities. The effectiveness hinges on Vertex Aerospace's performance in maintaining inventory, managing distribution, and providing timely support, directly impacting the ability of forces to operate.
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
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Vertex Aerospace Services Corp. (UEI: 081292432)
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: $1,597,871,904
Exercised Options: $1,282,511,465
Current Obligation: $734,817,216
Actual Outlays: $624,281
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2009-07-31
Current End Date: 2019-05-15
Potential End Date: 2019-05-15 00:00:00
Last Modified: 2021-09-09
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