Air Force awards $8M+ contract for Other Support Activities, highlighting strong competition

Contract Overview

Contract Amount: $8,034,464 ($8.0M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-25

End Date: 2026-10-30

Contract Duration: 400 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY26 OSAN CFT

Place of Performance

Location: WOOD DALE, DUPAGE County, ILLINOIS, 60191

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $8.0 million to AAR GOVERNMENT SERVICES, INC. for work described as: FY26 OSAN CFT Key points: 1. Contract value of over $8 million for support activities. 2. Awarded to AAR GOVERNMENT SERVICES, INC. by the Department of the Air Force. 3. Full and open competition indicates a robust bidding process. 4. Contract duration extends into late 2026. 5. Fixed-price contract type suggests cost certainty for the government. 6. The contract is a delivery order under a larger agreement. 7. The base contract dates back to 2008, suggesting a long-standing relationship. 8. The contract is not set aside for small businesses.

Value Assessment

Rating: good

The contract value of over $8 million for approximately 13 months of service appears reasonable given the scope of 'Other Support Activities for Air Transportation'. Benchmarking against similar support contracts would provide further insight into value for money. The firm fixed-price structure helps manage cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders were likely considered. The presence of two bidders (no: 2) indicates a moderate level of competition for this specific delivery order. This competitive process is generally favorable for price discovery and achieving market-based pricing.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by encouraging multiple vendors to offer their best terms and prices.

Public Impact

The Department of the Air Force benefits from essential support activities for air transportation. Services provided are crucial for maintaining operational readiness and efficiency. The contract's impact is primarily within the defense sector, supporting military aviation. Workforce implications may include skilled technicians and support personnel employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in if this is a recurring need and competition narrows in future.
Dependence on a single contractor for critical support activities could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, suggesting a competitive market.
Firm fixed-price contract type provides cost predictability.
Long-standing base contract (since 2008) may indicate a proven track record of performance.
Delivery order structure allows for flexibility within a broader framework.

Sector Analysis

This contract falls within the aerospace and defense services sector, specifically supporting air transportation operations. The market for such services is characterized by specialized technical expertise and stringent regulatory requirements. Comparable spending benchmarks would involve analyzing other contracts for similar logistical and operational support within the Department of Defense and other federal agencies.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. The award to a larger entity suggests that the scope of work may require significant resources or specialized capabilities typically found in larger firms. Further analysis would be needed to determine if small businesses are involved in the supply chain or as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Air Force. Accountability measures are embedded in the firm fixed-price contract terms, with performance expectations likely detailed in the contract's statement of work. Transparency is facilitated through contract award databases, though specific performance metrics are usually internal.

Related Government Programs

Air Mobility Command Support Contracts
Logistics and Maintenance Services for Military Aircraft
Air Transportation Infrastructure Support

Risk Flags

Potential for performance issues if contractor's capacity is stretched.
Risk of cost increases if scope creeps beyond the delivery order's defined parameters.
Dependence on a single delivery order for a critical function.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.0 million to AAR GOVERNMENT SERVICES, INC.. FY26 OSAN CFT

Who is the contractor on this award?

The obligated recipient is AAR GOVERNMENT SERVICES, INC..

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 $8.0 million.

What is the period of performance?

Start: 2025-09-25. End: 2026-10-30.

What is the historical spending trend for 'Other Support Activities for Air Transportation' within the Department of the Air Force?

Analyzing historical spending for 'Other Support Activities for Air Transportation' within the Department of the Air Force requires access to detailed federal procurement data over multiple fiscal years. Typically, such spending can fluctuate based on operational tempo, modernization efforts, and budget allocations. Contracts in this category often support the maintenance, repair, and logistical operations essential for air mobility and readiness. Without specific historical data for this particular PSC code and agency, it's difficult to provide precise figures. However, trends might show increased spending during periods of heightened military activity or significant investments in fleet upgrades. Conversely, budget constraints or shifts in strategic priorities could lead to reduced spending. Understanding these patterns is crucial for forecasting future needs and ensuring adequate funding for critical support functions.

How does the awarded price compare to similar contracts for air transportation support services?

To compare the awarded price of approximately $8 million for 'Other Support Activities for Air Transportation' to similar contracts, one would need to identify comparable contracts based on service scope, duration, geographic location, and the specific branch of service. Factors such as the complexity of the support, required certifications, and the level of technical expertise needed significantly influence pricing. For instance, contracts involving specialized aircraft maintenance or advanced logistical planning would command higher prices than basic ground support. Benchmarking against contracts awarded under similar competitive conditions (full and open) and contract types (firm fixed-price) is essential. Without access to a comprehensive database of comparable contracts and their specific details, a precise comparison is challenging. However, the fact that this was awarded under full and open competition with two bidders suggests the pricing is likely competitive within the market.

What are the key performance indicators (KPIs) expected under this contract, and how is performance monitored?

Key Performance Indicators (KPIs) for a contract like 'Other Support Activities for Air Transportation' typically revolve around operational efficiency, timeliness, quality of service, and cost control. Specific KPIs might include aircraft turnaround times, maintenance completion rates, adherence to safety standards, and responsiveness to urgent support requests. Performance monitoring is usually conducted by a Contracting Officer's Representative (COR) or a Technical Point of Contact (TPOC) who assesses the contractor's adherence to the contract's Statement of Work (SOW) and performance standards. Regular progress reports, site inspections, and performance reviews are common methods. Failure to meet KPIs can result in contractual remedies, such as reduced payment, penalties, or even contract termination, depending on the severity of the performance deficiency.

What is the track record of AAR GOVERNMENT SERVICES, INC. in performing similar government contracts?

AAR GOVERNMENT SERVICES, INC. has a significant history of performing government contracts, particularly within the defense and aviation sectors. Their track record often includes providing aviation logistics, maintenance, repair, and overhaul (MRO) services, as well as supply chain management for military aircraft and platforms. Publicly available contract databases (like FPDS or SAM.gov) can provide insights into their past performance, including contract values, agencies served, and contract types. Generally, companies with long-standing contracts, like the base contract for this delivery order dating back to 2008, suggest a level of satisfaction and reliability. However, a thorough assessment would involve reviewing past performance evaluations, any documented disputes or corrective actions, and the breadth of their experience across various government agencies and contract types.

What is the potential impact of this contract on the broader defense logistics and support services market?

This contract, valued at over $8 million, contributes to the overall spending within the defense logistics and support services market. Awards like this sustain established players in the industry, such as AAR GOVERNMENT SERVICES, INC., and support a segment of the aerospace and defense supply chain. The fact that it was competed under full and open competition indicates that the market has multiple capable providers, fostering a competitive environment. Such contracts can influence market dynamics by setting benchmarks for pricing and service delivery. Furthermore, they underscore the ongoing need for specialized support for military aviation assets, signaling continued opportunities for companies possessing the requisite technical expertise and security clearances within this sector.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AAR Government Services Inc.

Address: 1100 N WOOD DALE RD, WOOD DALE, IL, 60191

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

Financial Breakdown

Contract Ceiling: $8,107,924

Exercised Options: $8,107,924

Current Obligation: $8,034,464

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA823222D0007

IDV Type: IDC

Timeline