DoD's $200M Air Transport Support Contract Awarded to S & K Aerospace, LLC Under Full and Open Competition

Contract Overview

Contract Amount: $200,455,130 ($200.5M)

Contractor: S & K Aerospace, LLC

Awarding Agency: Department of Defense

Start Date: 2017-09-22

End Date: 2022-09-22

Contract Duration: 1,826 days

Daily Burn Rate: $109.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Transportation

Official Description: IGF::OT::IGF RSAF SUPPLY SERVICES

Plain-Language Summary

Department of Defense obligated $200.5 million to S & K AEROSPACE, LLC for work described as: IGF::OT::IGF RSAF SUPPLY SERVICES Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Fixed Price Incentive, which aims to balance cost control with performance incentives. 3. The duration of the contract is 5 years, indicating a long-term need for these services. 4. The award value of over $200 million signifies a substantial investment in air transportation support. 5. The North American Industry Classification System (NAICS) code 488190 points to 'Other Support Activities for Air Transportation'. 6. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or similar vehicle.

Value Assessment

Rating: fair

Benchmarking the value of this $200M contract is challenging without specific performance metrics or comparable contract data. The Fixed Price Incentive (FPI) contract type suggests an attempt to manage costs while incentivizing performance, but the ultimate value for money depends on the achievement of target costs and performance levels. Without insight into the specific services rendered and their effectiveness, a definitive assessment of value is difficult. The absence of small business set-aside flags might indicate larger prime contractors were expected to perform or subcontract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment. A competitive process is expected to drive down prices and encourage innovation as contractors vie for the award. The use of full and open competition suggests the government sought the best possible solution and price from the widest possible market.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and higher quality services due to market pressures. This approach aims to ensure that government funds are used efficiently by leveraging the competitive landscape to secure favorable terms.

Public Impact

The Department of the Air Force benefits from enhanced air transportation support services. The contract likely supports military operations, logistics, and personnel movement. The geographic impact is likely global, given the nature of air transportation support for a branch of the U.S. military. Workforce implications may include direct employment by S & K Aerospace, LLC and its subcontractors, as well as indirect support to military personnel relying on these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess if the $200M+ was spent efficiently.
The Fixed Price Incentive (FPI) contract type can lead to cost overruns if targets are not met or if incentives are structured poorly.
Limited transparency on the number of bidders and the competitive landscape makes it hard to gauge the true price discovery.
The duration of the contract (5 years) means potential for long-term inefficiencies if not actively managed.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
The FPI contract type aims to align contractor incentives with government objectives.
The contract supports critical air transportation functions for the Department of Defense.
S & K Aerospace, LLC is the prime contractor, indicating a significant business relationship.

Sector Analysis

The air transportation support sector is crucial for national defense and global logistics. This contract falls under 'Other Support Activities for Air Transportation,' a segment that includes services like airport operations, air traffic control support, and aircraft maintenance services not directly related to flight operations. The market size for such services is substantial, driven by both commercial and governmental needs. This specific contract represents a significant portion of spending within this niche, supporting the extensive operational requirements of the U.S. Air Force.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the scope of work was likely geared towards larger companies capable of handling the extensive requirements and potential scale of operations. There is no explicit information on subcontracting plans for small businesses, which means the impact on the small business ecosystem is uncertain. It is possible that S & K Aerospace, LLC may engage small businesses for specific components or services, but this is not guaranteed by the contract's initial designation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the Fixed Price Incentive (FPI) contract structure, which includes target costs, performance incentives, and potential penalties. Transparency is facilitated through contract award databases, though detailed performance reports may not be publicly available. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Logistics Agency (DLA) Contracts
Air Mobility Command (AMC) Operations
Department of Transportation (DOT) Aviation Services
Federal Aviation Administration (FAA) Support Contracts

Risk Flags

Potential for cost overruns due to FPI structure and long duration.
Risk of service quality degradation over the 5-year contract term.
Dependence on a single contractor for critical support functions.
Lack of transparency regarding the number of bidders and specific performance outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $200.5 million to S & K AEROSPACE, LLC. IGF::OT::IGF RSAF SUPPLY SERVICES

Who is the contractor on this award?

The obligated recipient is S & K AEROSPACE, LLC.

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 $200.5 million.

What is the period of performance?

Start: 2017-09-22. End: 2022-09-22.

What is the track record of S & K Aerospace, LLC with Department of Defense contracts, particularly in air transportation support?

Assessing the track record of S & K Aerospace, LLC requires a deeper dive into their contract history with the Department of Defense (DoD). While this specific $200M+ contract indicates a significant engagement, understanding their past performance on similar contracts is crucial. This would involve reviewing past performance evaluations, any documented issues or successes, and their experience with the specific services outlined in this award. A history of successful, on-time, and within-budget delivery on comparable DoD contracts would be a positive indicator. Conversely, a pattern of cost overruns, missed deadlines, or performance deficiencies would raise concerns about their capability to execute this current contract effectively. Without access to detailed performance data, it's difficult to definitively assess their reliability for this substantial award.

How does the pricing structure of this Fixed Price Incentive (FPI) contract compare to industry benchmarks for similar air transportation support services?

The Fixed Price Incentive (FPI) contract type is designed to share cost risks and rewards between the government and the contractor. To benchmark the pricing, one would need to compare the target cost, ceiling price, and incentive sharing rates against similar FPI contracts for air transportation support services within the DoD or other federal agencies. Key metrics would include the cost-plus-fee structure, the profit margin allowed, and the efficiency targets set. If S & K Aerospace, LLC's target cost is significantly higher than comparable contracts, or if the incentive sharing heavily favors the contractor without commensurate risk, it could indicate less favorable pricing for the government. Conversely, aggressive incentive targets and a reasonable profit margin could suggest good value. Detailed analysis requires access to the specific contract clauses and potentially proprietary industry data.

What are the primary risks associated with a 5-year Fixed Price Incentive contract for air transportation support, and how are they mitigated?

A 5-year Fixed Price Incentive (FPI) contract for air transportation support carries several risks. Firstly, the long duration increases the potential for cost escalation due to unforeseen market changes (e.g., fuel prices, labor costs) that may not be fully captured by the incentive structure. Secondly, if the performance targets are poorly defined or unrealistic, the incentive mechanism could either fail to motivate the contractor or lead to excessive costs if targets are met with minimal effort. Thirdly, there's a risk of contractor complacency over the contract's lifespan, potentially leading to a decline in service quality. Mitigation strategies typically involve robust contract oversight, regular performance reviews, clear and measurable performance metrics, and a well-defined incentive structure that aligns contractor profit with government objectives. The government's ability to adjust targets or re-negotiate terms under specific conditions also plays a role in risk management.

What is the historical spending pattern for 'Other Support Activities for Air Transportation' by the Department of the Air Force, and how does this award compare?

To understand the historical spending pattern, one would analyze the Department of the Air Force's (DAF) procurement data over several fiscal years for NAICS code 488190 and related air transportation support categories. This analysis would reveal the typical annual expenditure, the number and size of contracts awarded, and the primary contractors in this space. Comparing this $200M+ award to historical data would indicate whether this represents a significant increase or decrease in spending, a consolidation of services, or a shift in contracting strategy. For instance, if historical annual spending in this category averages $100M, this $200M+ award over five years (averaging $40M annually) might seem manageable. However, if it's a single large award replacing multiple smaller ones, it signifies a strategic shift. Understanding this context helps assess if the current award is an anomaly or part of a trend.

What specific performance metrics are tied to the incentive structure in this FPI contract, and how are they measured?

The effectiveness of an FPI contract hinges on its incentive structure and the clarity of its performance metrics. For this air transportation support contract, potential metrics could include on-time delivery of services, aircraft turnaround times, maintenance completion rates, fuel efficiency achieved, or response times for critical support requests. The incentive structure would define how achieving or exceeding these metrics impacts the contractor's profit, often through a target cost, a ceiling price, and a sharing ratio for cost variances. Measuring these metrics requires robust data collection and verification processes, likely involving government personnel on the ground or automated tracking systems. Without the specific contract details, it's impossible to know the exact metrics and measurement methods, which are critical for evaluating the contract's value and the contractor's performance.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 63066 OLD HWY 93 STE B, SAINT IGNATIUS, MT, 59865

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Government, Native American Tribal Government, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $510,383,848

Exercised Options: $200,455,130

Current Obligation: $200,455,130

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA850517D0005

IDV Type: IDC

Timeline