DoD's $39.9M Air Transport Contract Awarded to Orbital Sciences LLC for Arizona Operations

Contract Overview

Contract Amount: $39,943,500 ($39.9M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2016-12-08

End Date: 2021-10-28

Contract Duration: 1,785 days

Daily Burn Rate: $22.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF L-111 TO

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85286

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $39.9 million to ORBITAL SCIENCES LLC for work described as: IGF::CT::IGF L-111 TO Key points: 1. Contract value of $39.9M over 5 years suggests significant, ongoing demand for air transport services. 2. Full and open competition indicates a potentially healthy market for these services, though only one bid was received. 3. The fixed-price contract type offers cost certainty for the government, shifting performance risk to the contractor. 4. Delivery order award type implies this is part of a larger indefinite-delivery contract, common for flexible service needs. 5. The contract's duration of 1785 days (approx. 4.9 years) aligns with typical long-term service agreements. 6. Focus on nonscheduled chartered freight air transportation points to specialized logistical needs within the Air Force.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services provided and the routes covered. The $39.9 million award over nearly five years averages to approximately $8 million annually. This figure needs to be compared against similar nonscheduled chartered freight air transportation contracts awarded by the Department of Defense or other agencies for comparable services and geographic areas to assess value for money. The fixed-price nature of the contract provides cost predictability, but the absence of multiple bids raises questions about whether the most competitive pricing was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that all responsible sources were permitted to submit bids. However, only one bid was received. This could indicate a lack of interest from other potential contractors, a highly specialized service where few companies can compete, or that the solicitation terms may have inadvertently limited the pool of bidders. The low number of bids warrants further investigation into the competitive landscape for this specific type of air transportation service.

Taxpayer Impact: While full and open competition is generally favorable for taxpayers, receiving only one bid may have limited the government's ability to secure the lowest possible price through robust competition.

Public Impact

The primary beneficiary is the Department of the Air Force, which receives essential air transport services for its operations. Services delivered include nonscheduled chartered freight air transportation, crucial for logistical support and movement of goods. The geographic impact is centered in Arizona (ST: AZ, SN: ARIZONA), indicating a specific operational area for these services. Workforce implications are primarily for the contractor, Orbital Sciences LLC, which will utilize its personnel and assets to fulfill the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (one bid received) despite full and open solicitation could indicate market concentration or barriers to entry.
Lack of detailed performance metrics in the provided data makes it difficult to assess the quality and efficiency of services rendered.
The specific nature of 'nonscheduled chartered freight air transportation' may involve unique risks related to aircraft availability, maintenance, and regulatory compliance.

Positive Signals

Award under full and open competition aligns with government procurement best practices.
Firm Fixed Price contract type provides budget certainty and transfers cost overrun risk to the contractor.
The contract duration of nearly five years suggests a stable, long-term requirement, allowing for efficient resource planning by the contractor.

Sector Analysis

The contract falls within the broader aerospace and defense services sector, specifically focusing on air transportation and logistics. The market for nonscheduled chartered freight air transportation is specialized, often serving government and military needs that require flexibility beyond standard commercial cargo routes. Comparable spending benchmarks would involve analyzing other DoD or agency contracts for similar charter services, considering factors like aircraft type, payload capacity, and operational tempo. The total value of $39.9 million over its term places it as a significant, though not exceptionally large, contract within this niche.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it specify subcontracting goals. Given the nature of specialized air transportation services and the prime contractor being Orbital Sciences LLC (likely a larger entity), the direct impact on small businesses may be limited unless they are part of the supply chain or subcontracted by Orbital Sciences. Further analysis of subcontracting plans would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Air Force. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally provided through contract databases like FPDS, where this award is recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Air Transport Services
Logistics and Transportation Services
Department of Defense Procurement
Air Force Operational Support Contracts
Chartered Air Services

Risk Flags

Low number of bids received under full and open competition.
Potential for limited market competition in specialized air freight services.
Need for detailed performance monitoring due to fixed-price structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.9 million to ORBITAL SCIENCES LLC. IGF::CT::IGF L-111 TO

Who is the contractor on this award?

The obligated recipient is ORBITAL SCIENCES 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 $39.9 million.

What is the period of performance?

Start: 2016-12-08. End: 2021-10-28.

What is the specific nature of the 'nonscheduled chartered freight air transportation' required by the Air Force under this contract, and what types of cargo are typically moved?

The term 'nonscheduled chartered freight air transportation' implies that the Air Force requires dedicated, on-demand air cargo services rather than utilizing regular commercial flight schedules. This is often used for time-sensitive materials, specialized equipment, or cargo that does not fit standard commercial freight dimensions or handling requirements. While the specific cargo types are not detailed in the provided data, such contracts commonly support military deployments, rapid resupply missions, or the transport of sensitive or classified materials. The flexibility of charter services allows the Air Force to dictate flight schedules, routes, and aircraft configurations to meet unique operational demands, which might include everything from spare parts for aircraft to essential supplies for remote bases.

How does the $39.9 million contract value compare to historical spending on similar air transport services by the Air Force or DoD?

To accurately compare the $39.9 million contract value, one would need to analyze historical spending data for similar 'Nonscheduled Chartered Freight Air Transportation' (NAICS code 481212) contracts awarded by the Department of the Air Force and the broader Department of Defense. This analysis should consider contracts with comparable durations (approximately 5 years) and service scopes. Without access to a comprehensive database query filtering for these specific parameters, a direct comparison is difficult. However, $39.9 million over nearly five years represents an average annual expenditure of roughly $8 million. This figure should be benchmarked against the average annual spending for similar services to determine if it represents a significant increase, decrease, or is in line with historical trends, taking into account inflation and changes in operational tempo.

What are the potential risks associated with a 'full and open competition' resulting in only one bid, and how might this impact contractor performance?

A 'full and open competition' that yields only one bid presents several potential risks. Firstly, it may indicate a lack of robust competition in the market for this specific service, potentially leading to higher prices than might be achieved with multiple bidders. Secondly, it could suggest that the solicitation requirements were overly restrictive, or that potential bidders perceived significant risks or barriers to entry, discouraging participation. From a performance perspective, a sole bidder might have less incentive to excel compared to a situation with strong competitive pressure. While the government still has recourse through contract terms and performance monitoring, the initial lack of competitive tension warrants careful oversight to ensure the contractor remains motivated to deliver high-quality services efficiently throughout the contract's duration.

What is the track record of Orbital Sciences LLC in performing similar government contracts, particularly within the Department of Defense?

Orbital Sciences LLC, now part of Northrop Grumman, has a significant track record with the Department of Defense and other government agencies, primarily in aerospace and defense systems, satellite technology, and launch services. While their core business often involves complex engineering and technology development, they also engage in related services. Information regarding their specific performance on contracts for 'Nonscheduled Chartered Freight Air Transportation' would require a detailed review of their contract history in federal procurement databases. Assessing their past performance on similar logistics or transportation contracts, including on-time delivery, cost control, and adherence to specifications, is crucial for evaluating their capability to successfully execute this $39.9 million award.

How does the fixed-price contract type influence the risk allocation between the government and Orbital Sciences LLC for this air transport service?

The Firm Fixed Price (FFP) contract type significantly shifts risk towards the contractor, Orbital Sciences LLC. Under an FFP agreement, the contractor is obligated to perform the specified services for a predetermined price, regardless of their actual costs incurred. This means that if Orbital Sciences experiences cost overruns due to factors like fuel price increases, unexpected maintenance, or operational inefficiencies, their profit margin will decrease, or they could even incur a loss. Conversely, if they manage their costs effectively and complete the work for less than the fixed price, their profit will be higher. For the government, the primary benefit is cost certainty; the total expenditure is known upfront, simplifying budgeting and financial planning. The main risk for the government is that the contractor might cut corners on quality or service to protect their profit margin if costs escalate unexpectedly, necessitating robust performance monitoring.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Freight Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1575 SOUTH PRICE RD, CHANDLER, AZ, 85286

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

Financial Breakdown

Contract Ceiling: $39,943,500

Exercised Options: $39,943,500

Current Obligation: $39,943,500

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA881813D0001

IDV Type: IDC

Timeline