Air Force awards $23.2M for KC-46 initial spare parts, with delivery expected by April 2028

Contract Overview

Contract Amount: $23,183,431 ($23.2M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-11

End Date: 2028-04-01

Contract Duration: 933 days

Daily Burn Rate: $24.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KC-46 INITIAL SPARE PARTS FOR TINKER AFB 424TH (UNRESTRICTED). DELIVERY ORDER WILL BE PLACED OFF OF THE KC-46 INITIAL SPARES (KIS) MULTIPLE AWARD PROGRAM.

Place of Performance

Location: HAVELOCK, CRAVEN County, NORTH CAROLINA, 28532

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to AAR GOVERNMENT SERVICES, INC. for work described as: KC-46 INITIAL SPARE PARTS FOR TINKER AFB 424TH (UNRESTRICTED). DELIVERY ORDER WILL BE PLACED OFF OF THE KC-46 INITIAL SPARES (KIS) MULTIPLE AWARD PROGRAM. Key points: 1. Value for money assessed against comparable aircraft parts contracts. 2. Competition dynamics indicate a robust bidding process for this critical supply. 3. Risk indicators include potential supply chain disruptions for specialized parts. 4. Performance context tied to maintaining operational readiness of the KC-46 fleet. 5. Sector positioning within aerospace manufacturing and defense logistics. 6. Contract type is firm-fixed-price, shifting cost risk to the contractor.

Value Assessment

Rating: good

The contract value of $23.2 million for initial spare parts for the KC-46 tanker appears reasonable when benchmarked against similar large-scale aircraft component procurements. The firm-fixed-price structure suggests a degree of cost certainty for the Air Force. However, a detailed comparison with per-unit costs of specific components would provide a more granular assessment of value. The duration of the contract (over 3 years) also suggests a significant quantity of parts are anticipated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of 10 bidders suggests a healthy level of competition for this requirement. This broad competition is generally favorable for price discovery and ensures the government receives competitive offers.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers by leveraging market forces to drive down costs.

Public Impact

The primary beneficiaries are the U.S. Air Force and its KC-46 Pegasus tanker fleet, ensuring operational readiness. Services delivered include the provision of essential initial spare parts critical for aircraft maintenance and repair. Geographic impact is primarily national, supporting Air Force bases and maintenance depots across the United States. Workforce implications include supporting jobs in aerospace manufacturing and logistics within the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long-term sustainment costs to exceed initial estimates if not managed proactively.
Reliance on a single contractor for specific, hard-to-source components could create future supply chain vulnerabilities.
Ensuring timely delivery of all parts to meet operational tempo is a constant challenge in defense logistics.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing and a wide vendor pool.
Firm-fixed-price contract type transfers cost overrun risk to the contractor.
The contract supports a critical, modernizing asset for the U.S. Air Force, enhancing national security capabilities.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for military aircraft spare parts is substantial, driven by the need to maintain aging fleets and modernize new ones. This procurement is a component of the broader sustainment strategy for the KC-46 program, which represents a significant investment in air refueling capabilities. Comparable spending benchmarks would involve analyzing other major aircraft spare parts contracts within the Department of Defense.

Small Business Impact

This contract was not specifically set aside for small businesses, and there is no indication of significant subcontracting opportunities for small businesses based on the provided data. The primary contractor, AAR Government Services, Inc., is a large business. Further analysis would be needed to determine if any specific components or services were required to be sourced from small businesses.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force, likely through contracting officers and program management offices responsible for the KC-46 sustainment. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified parts by a certain date. Transparency is generally maintained through contract award databases, though specific performance metrics may not be publicly disclosed.

Related Government Programs

KC-46 Pegasus Program
Air Mobility Command Logistics
DoD Aircraft Parts Procurement
Defense Logistics Agency (DLA) Support

Risk Flags

Supply Chain Vulnerability
Potential for Cost Overruns (mitigated by FFP)
Delivery Schedule Adherence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to AAR GOVERNMENT SERVICES, INC.. KC-46 INITIAL SPARE PARTS FOR TINKER AFB 424TH (UNRESTRICTED). DELIVERY ORDER WILL BE PLACED OFF OF THE KC-46 INITIAL SPARES (KIS) MULTIPLE AWARD PROGRAM.

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 $23.2 million.

What is the period of performance?

Start: 2025-09-11. End: 2028-04-01.

What is the historical spending pattern for KC-46 initial spare parts?

Historical spending on initial spare parts for new aircraft programs like the KC-46 is typically concentrated in the early years of fleet introduction and sustainment. This contract, valued at approximately $23.2 million, represents a significant portion of the initial spares requirement. Prior to this, spending would have been focused on development and initial fielding. Future spending will likely shift towards sustainment spares as the fleet matures. Analyzing past procurements for similar tanker aircraft (e.g., KC-135, KC-10) could provide a comparative baseline, though the KC-46 represents a newer generation of technology and operational requirements.

How does the pricing of these spare parts compare to market rates for similar commercial aircraft components?

Directly comparing the pricing of specialized military aircraft spare parts to commercial aircraft components can be challenging due to differences in certification, manufacturing standards, volume, and proprietary technology. However, the firm-fixed-price nature of this contract and the full and open competition suggest that the pricing was vetted against market expectations. Benchmarking would ideally involve comparing specific part numbers and quantities against publicly available catalogs or industry price indices for comparable military or commercial platforms. Without access to detailed part-level cost data, a precise market rate comparison is difficult, but the competitive award process provides some assurance of reasonable pricing.

What are the primary risks associated with the supply chain for these KC-46 initial spare parts?

The primary risks associated with the supply chain for these KC-46 initial spare parts include potential delays in manufacturing from specialized suppliers, geopolitical disruptions affecting raw material availability, and transportation logistics challenges. Given that these are 'initial' spare parts, some may be sourced from newer production lines or require specific tooling, increasing lead times. The reliance on a limited number of qualified manufacturers for certain high-tech components could also pose a risk if those suppliers face production issues or financial instability. The Air Force's mitigation strategies likely involve close monitoring of supplier performance, maintaining safety stock levels, and potentially qualifying alternative sources where feasible.

What is the expected impact of this contract on the operational readiness of the KC-46 fleet?

This contract is crucial for ensuring the operational readiness of the KC-46 fleet. By providing essential initial spare parts, it directly supports the Air Force's ability to perform scheduled maintenance, unscheduled repairs, and flight operations. Having these parts readily available minimizes aircraft downtime, allowing the KC-46 to meet its mission requirements for air refueling and aeromedical evacuation. Insufficient or delayed availability of critical spares could lead to aircraft being grounded, impacting training schedules and operational deployments, thus directly affecting the fleet's overall readiness posture.

What is the contractor's track record in supplying similar aircraft parts to the Department of Defense?

AAR Government Services, Inc. has a significant track record in providing aviation support services and parts to the Department of Defense and other government agencies. They are known for their expertise in logistics, supply chain management, and maintenance, repair, and overhaul (MRO) services for various aircraft platforms. While specific performance details for this exact contract are not yet available as it's an award, their history suggests they possess the capabilities and experience necessary to manage the supply of complex aircraft components. Past performance evaluations and contract databases would offer more granular insights into their reliability and quality of service on previous DoD contracts.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 10

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: $23,183,431

Exercised Options: $23,183,431

Current Obligation: $23,183,431

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA860922DB001

IDV Type: IDC

Timeline