DoD awards $42.6M for E-2/C-2A aircraft maintenance, with VSE Corp. securing a significant portion

Contract Overview

Contract Amount: $42,610,604 ($42.6M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2021-04-01

End Date: 2024-05-31

Contract Duration: 1,156 days

Daily Burn Rate: $36.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: O-LEVEL MAINTENANCE SUPPORT OF E-2, C-2A AIRCRAFT WITHIN VAW-120 SQUADRON IN NORFOLK, VA.

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $42.6 million to VSE CORPORATION for work described as: O-LEVEL MAINTENANCE SUPPORT OF E-2, C-2A AIRCRAFT WITHIN VAW-120 SQUADRON IN NORFOLK, VA. Key points: 1. Value for money appears fair, given the specialized nature of E-2/C-2A aircraft maintenance. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, primarily related to the complexity and age of the aircraft. 4. Performance context involves critical O-level maintenance for operational readiness. 5. Sector positioning places this contract within the specialized aerospace and defense maintenance industry.

Value Assessment

Rating: fair

The contract value of $42.6 million for O-level maintenance of E-2/C-2A aircraft appears within a reasonable range for specialized aviation support. Benchmarking against similar contracts for complex aircraft maintenance is challenging due to the unique nature of the E-2/C-2A platforms. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for value if managed effectively. The duration of the contract (over three years) allows for economies of scale in service delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of 5 bidders suggests a reasonably competitive environment, which should theoretically drive prices down and encourage efficiency. The specific details of the bidding process and the number of proposals received would provide further insight into the intensity of the competition and its impact on the final price.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a market where the most cost-effective solutions are likely to be selected, leading to better value for public funds.

Public Impact

The primary beneficiaries are the U.S. Navy squadrons (VAW-120) operating the E-2/C-2A aircraft, ensuring their operational readiness. Services delivered include crucial O-level (Organizational level) maintenance, which is performed by the unit on or near the aircraft. The geographic impact is concentrated in Norfolk, Virginia, where VAW-120 squadron is based. Workforce implications include the potential for skilled aviation mechanics and technicians employed by VSE Corporation and any subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise with aging aircraft.
Dependence on a single contractor for critical maintenance could pose supply chain risks.
Ensuring consistent quality of maintenance across the contract duration is paramount.

Positive Signals

Firm-fixed-price contract structure shifts cost risk to the contractor.
Full and open competition suggests a competitive pricing environment.
Long-term contract allows for specialized knowledge development and efficiency gains.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on specialized aircraft maintenance. The market for such services is characterized by high barriers to entry due to technical expertise, certifications, and security clearances required. Spending in this area is driven by the need to maintain aging fleets of complex military aircraft, ensuring operational readiness. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of the E-2/C-2A platforms, but overall defense maintenance spending is substantial.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' (small business set-aside) flag is false. There is no explicit information on subcontracting plans for small businesses. Further analysis would be needed to determine if VSE Corporation has a robust small business subcontracting program in place to ensure opportunities within the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring VSE Corporation to deliver services to specification. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DoD Aircraft Maintenance Contracts
Naval Aviation Support Services
E-2 Hawkeye Program Support
C-2 Greyhound Program Support
Aerospace Defense Services

Risk Flags

Aging Aircraft Fleet
Specialized Maintenance Requirements
Potential for Cost Overruns
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.6 million to VSE CORPORATION. O-LEVEL MAINTENANCE SUPPORT OF E-2, C-2A AIRCRAFT WITHIN VAW-120 SQUADRON IN NORFOLK, VA.

Who is the contractor on this award?

The obligated recipient is VSE CORPORATION.

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 $42.6 million.

What is the period of performance?

Start: 2021-04-01. End: 2024-05-31.

What is VSE Corporation's track record with similar DoD aviation maintenance contracts?

VSE Corporation has a significant history of supporting U.S. military aviation platforms. They have been awarded numerous contracts for maintenance, repair, and overhaul (MRO) services across various branches of the Department of Defense, including the Navy and Air Force. Their experience often spans complex aircraft systems, including fixed-wing and rotary-wing platforms. While specific performance details for past contracts are not always public, their continued success in winning competitive bids suggests a generally positive track record in delivering required services. Further investigation into past performance reviews and contract close-outs would provide a more granular assessment of their reliability and quality of service.

How does the awarded price compare to industry benchmarks for E-2/C-2A aircraft maintenance?

Directly comparing the awarded price of $42.6 million to specific industry benchmarks for E-2/C-2A aircraft maintenance is challenging due to the specialized and niche nature of these platforms. The E-2 Hawkeye and C-2 Greyhound are unique carrier-capable aircraft with complex systems, meaning maintenance requirements differ significantly from more common military aircraft. Industry benchmarks for general aviation maintenance or even other specialized military aircraft may not accurately reflect the costs associated with the E-2/C-2A. However, the fact that the contract was awarded under full and open competition with multiple bidders suggests that the pricing was deemed competitive within the available market for these specific services. The firm-fixed-price structure also implies that the contractor has assessed the risks and costs and is willing to deliver the services at the agreed-upon price.

What are the primary risks associated with this contract and how are they being mitigated?

The primary risks associated with this contract revolve around the aging nature of the E-2/C-2A aircraft fleet, the complexity of their systems, and the potential for unforeseen maintenance issues. Ensuring the availability of specialized parts and skilled technicians is also a key consideration. Mitigation strategies are primarily embedded within the contract structure. The firm-fixed-price (FFP) nature of the contract shifts the financial risk of cost overruns to VSE Corporation, incentivizing them to manage costs efficiently. The full and open competition process likely selected a contractor with demonstrated capability and a realistic understanding of the maintenance challenges. Furthermore, the contract duration allows for the development of specialized expertise and potentially more streamlined maintenance processes over time, which can help mitigate risks related to efficiency and quality.

How effective is the full and open competition in ensuring value for taxpayers on this contract?

The full and open competition strategy is generally considered an effective mechanism for ensuring value for taxpayers, as it theoretically allows the government to receive the best possible price and quality by soliciting offers from all responsible sources. In this case, with 5 bidders participating, the competition likely drove down prices and encouraged VSE Corporation to offer competitive terms. This process helps prevent single-source price gouging and promotes innovation among bidders. However, the ultimate value for taxpayers also depends on the thoroughness of the evaluation process, the clarity of the requirements, and the contractor's ability to execute the contract effectively and efficiently throughout its term. Continuous oversight and performance monitoring are crucial to realizing the full benefits of the competitive award.

What is the historical spending trend for E-2/C-2A aircraft maintenance within the Department of Defense?

Analyzing the historical spending trend for E-2/C-2A aircraft maintenance within the Department of Defense requires access to comprehensive historical contract data. This specific contract award of $42.6 million represents a significant investment in maintaining these specialized platforms. Generally, spending on aging aircraft fleets tends to increase over time as components wear out and require more frequent or complex repairs. The operational tempo and strategic importance of the E-2/C-2A (used for airborne early warning and control) also influence maintenance demands and associated spending. Without specific historical data, it's difficult to pinpoint precise trends, but it's reasonable to assume that consistent funding is allocated to ensure the readiness of these critical assets, with fluctuations potentially driven by fleet modernization efforts, operational needs, or major repair cycles.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA810814R0001

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6348 WALKER LANE, ALEXANDRIA, VA, 22310

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,610,604

Exercised Options: $42,610,604

Current Obligation: $42,610,604

Actual Outlays: $12,348,478

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA810817D0017

IDV Type: IDC

Timeline