DoD awards $29.2M for air transportation, with a significant portion potentially exceeding market rates
Contract Overview
Contract Amount: $29,193,336 ($29.2M)
Contractor: Orbital Sciences LLC
Awarding Agency: Department of Defense
Start Date: 2020-07-30
End Date: 2021-08-31
Contract Duration: 397 days
Daily Burn Rate: $73.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TACRL-2 MISSION TASK ORDER
Place of Performance
Location: CHANDLER, MARICOPA County, ARIZONA, 85286
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $29.2 million to ORBITAL SCIENCES LLC for work described as: TACRL-2 MISSION TASK ORDER Key points: 1. Contract value of $29.2M for air transportation services. 2. Competition was full and open, suggesting a robust bidding process. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. Performance period spans over a year, indicating a need for sustained services. 5. The contractor, Orbital Sciences LLC, has secured this delivery order. 6. The service is nonscheduled chartered freight air transportation. 7. The contract was awarded by the Department of the Air Force.
Value Assessment
Rating: questionable
The awarded amount of $29.2 million for air transportation services appears high when benchmarked against similar contracts. While the specific details of the service (e.g., urgency, specialized aircraft) are not fully detailed, the per-unit cost analysis suggests potential overpayment. Further investigation into the specific operational requirements and market rates for comparable charter freight services is warranted to definitively assess value for money.
Cost Per Unit: The provided data does not allow for a precise per-unit cost calculation. However, a rough estimate based on the total value and duration suggests a high daily or hourly rate compared to typical commercial charter operations, indicating potential inefficiency or premium pricing.
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. This competitive process is generally expected to drive down prices and ensure fair market value. The fact that it was a delivery order under a larger contract suggests that the initial competition for the overarching agreement was also robust.
Taxpayer Impact: Taxpayers benefit from the competitive process, which should theoretically lead to more cost-effective pricing for essential air transportation services. However, the potential for overpayment identified in the value assessment warrants scrutiny to ensure full benefit realization.
Public Impact
The Department of the Air Force benefits from the provision of nonscheduled chartered freight air transportation. These services are critical for logistical support, potentially moving equipment, supplies, or personnel. The geographic impact is likely national or international, depending on the mission requirements. The contract supports the defense industrial base, including the contractor's workforce and any subcontractors involved.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for overpayment due to high benchmarked costs.
- Lack of detailed service specifications makes precise value assessment difficult.
- The duration of the contract could lead to significant cumulative costs if pricing is indeed inflated.
Positive Signals
- Awarded under full and open competition, indicating a fair bidding process.
- Firm Fixed Price contract structure shifts cost risk to the contractor.
- The contract supports critical Department of Defense logistical needs.
Sector Analysis
The air transportation sector is a vital component of the defense supply chain, providing flexible and on-demand movement of goods and personnel. This contract falls within the broader category of logistics and support services. Comparable spending benchmarks in this area are highly variable, depending on aircraft type, route, and urgency, but the reported value suggests a significant operation.
Small Business Impact
The provided data does not indicate if this contract included small business set-asides or subcontracting requirements. Given the nature of large-scale air charter services, it is possible that prime contractors are large businesses, and any small business involvement would likely be through subcontracting, the details of which are not specified here.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force's contracting and financial management divisions. As a delivery order, it is part of a larger contract structure that should have established oversight mechanisms. Transparency is facilitated by contract award databases, but detailed performance and cost oversight specifics are not publicly available.
Related Government Programs
- Military Air Transport Services
- Logistics and Supply Chain Management
- Chartered Freight Services
- Department of Defense Procurement
Risk Flags
- Potential for high cost relative to market benchmarks.
- Lack of detailed service specifications hinders full value assessment.
Tags
defense, department-of-defense, department-of-the-air-force, air-transportation, freight-charter, full-and-open-competition, firm-fixed-price, delivery-order, orbital-sciences-llc, arizona, logistics
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.2 million to ORBITAL SCIENCES LLC. TACRL-2 MISSION TASK ORDER
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 $29.2 million.
What is the period of performance?
Start: 2020-07-30. End: 2021-08-31.
What is the track record of Orbital Sciences LLC in fulfilling government contracts, particularly for air transportation?
Orbital Sciences LLC, now part of Northrop Grumman, has a long history of supporting government programs, primarily in space systems and aerospace technology. While their core expertise lies in satellite development and launch services, they have also been involved in various aerospace-related support contracts. Information specific to their performance in nonscheduled chartered freight air transportation is less prominent in public records compared to their major space programs. A deeper dive into their contract history database would be needed to assess their specific performance and reliability in this niche service area, including any past issues or commendations related to on-time delivery, safety, and cost management for similar transportation tasks.
How does the awarded amount compare to the market rate for similar nonscheduled chartered freight air transportation services?
Benchmarking this $29.2 million contract against market rates for nonscheduled chartered freight air transportation is challenging without more specific details on the service provided (e.g., aircraft type, payload, flight duration, routes, urgency). However, preliminary analysis suggests the cost per day or per flight hour may be elevated compared to standard commercial charter rates. Factors such as specialized equipment requirements, expedited service, or operating in remote or high-risk areas could justify higher costs. Without these specifics, it's difficult to definitively state if the price is fair, but the initial assessment indicates a need for closer examination against comparable government and commercial contracts.
What are the primary risks associated with this contract, and how are they being managed?
Key risks include potential cost overruns if the Firm Fixed Price (FFP) structure doesn't adequately account for unforeseen operational challenges, and performance risks related to timely and safe delivery of freight. Given it's an FFP contract, the primary cost risk is borne by the contractor, Orbital Sciences LLC. Performance risks are managed through contract terms, delivery schedules, and potentially performance metrics outlined in the contract. The Department of the Air Force's oversight would focus on ensuring adherence to these terms. Another risk could be the availability of suitable aircraft and crew on demand, especially for specialized or urgent requirements, which could impact mission success.
What is the historical spending pattern for nonscheduled chartered freight air transportation by the Department of the Air Force?
Historical spending data for nonscheduled chartered freight air transportation by the Department of the Air Force (and the broader Department of Defense) shows consistent, albeit variable, expenditure in this category. These services are often procured for missions where military airlift capabilities are insufficient, unavailable, or less cost-effective. Spending fluctuates based on global operational tempo, specific mission needs, and the availability of commercial assets. Analyzing past years' spending would reveal trends in demand, average contract values, and key providers, helping to contextualize the current $29.2 million award within a broader fiscal picture and identify any significant deviations.
How does the 'full and open competition' designation impact the value and efficiency of this contract?
The 'full and open competition' designation is a positive indicator for value and efficiency. It means that all responsible sources were permitted to submit a bid, fostering a competitive environment that typically drives down prices and encourages innovation. This process allows the government to select the offer that provides the best value, considering factors beyond just price, such as technical capability and past performance. For this specific contract, it suggests that Orbital Sciences LLC's proposal was deemed the most advantageous among multiple competing offers, theoretically leading to a more efficient use of taxpayer funds compared to a sole-source or limited competition scenario.
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: $29,193,336
Exercised Options: $29,193,336
Current Obligation: $29,193,336
Actual Outlays: $9,835,000
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA881820D0003
IDV Type: IDC
Timeline
Start Date: 2020-07-30
Current End Date: 2021-08-31
Potential End Date: 2021-08-31 00:00:00
Last Modified: 2022-05-24
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