DHS awarded $42M for air charter services, with 2 bids received under full and open competition

Contract Overview

Contract Amount: $42,010,603 ($42.0M)

Contractor: CSI Aviation, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2013-03-28

End Date: 2014-04-01

Contract Duration: 369 days

Daily Burn Rate: $113.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: UNSCHEDULED AIR CHARTER SERVICES ORIGINATING OUT OF MESA, ARIZONA. IGF::OT::IGF

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87107

State: New Mexico Government Spending

Plain-Language Summary

Department of Homeland Security obligated $42.0 million to CSI AVIATION, INC for work described as: UNSCHEDULED AIR CHARTER SERVICES ORIGINATING OUT OF MESA, ARIZONA. IGF::OT::IGF Key points: 1. Value for money appears fair given the firm fixed-price contract type and duration. 2. Competition dynamics show a limited number of bidders, potentially impacting price discovery. 3. Risk indicators are moderate, with a fixed-price contract mitigating cost overrun risks. 4. Performance context is for unscheduled air charter services, a niche but essential requirement. 5. Sector positioning is within travel arrangement and reservation services, supporting operational needs.

Value Assessment

Rating: fair

The contract value of approximately $42 million over roughly one year for unscheduled air charter services is difficult to benchmark without more specific operational details. However, the firm fixed-price structure suggests an attempt to control costs. Compared to other government contracts for similar specialized air transport, the pricing appears within a reasonable range, though a detailed cost-benefit analysis would require more granular data on flight hours, routes, and aircraft types utilized.

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 offers. However, only two bids were received. This limited number of bidders suggests that the market for these specific unscheduled air charter services originating from Mesa, Arizona, may be concentrated among a few specialized providers, or that the solicitation requirements were highly specific.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the low number of bids could mean that the government did not achieve the most competitive pricing possible. Further analysis would be needed to determine if the pricing reflects optimal market value.

Public Impact

Benefits U.S. Immigration and Customs Enforcement (ICE) by providing essential unscheduled air charter services. Facilitates the movement of personnel or assets for critical operational needs. Geographic impact is centered around operations originating from Mesa, Arizona, with potential reach across various destinations. Workforce implications are indirect, supporting government operations rather than directly employing a large civilian workforce for this specific contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have reduced price negotiation leverage.
Potential for high per-flight costs given the specialized nature of unscheduled charters.
Dependence on a single contractor for critical, unscheduled transport could pose operational risks if not managed carefully.

Positive Signals

Firm fixed-price contract helps control overall expenditure.
Full and open competition, despite few bidders, adheres to procurement principles.
Contract duration provides a period of stable service provision.

Sector Analysis

The contract falls within the 'Travel Arrangement and Reservation Services' industry, specifically focusing on specialized air charter operations. This sector is characterized by high operational costs, stringent safety regulations, and a need for flexibility. Government spending in this area is often driven by unique logistical requirements that cannot be met by standard commercial air travel. Benchmarking this contract against others in the same niche is challenging due to the 'unscheduled' nature and specific origin point.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, and there is no explicit mention of subcontracting goals for small businesses. Given the specialized nature of air charter services, it is possible that larger, more established aviation companies were the primary participants in the bidding process. Further investigation into subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Immigration and Customs Enforcement (ICE) within the Department of Homeland Security. Accountability measures would be embedded in the contract's performance work statement, requiring adherence to flight schedules, safety standards, and reporting requirements. Transparency is generally maintained through contract award databases, though specific operational details of charter usage may be sensitive.

Related Government Programs

Department of Homeland Security - Travel Services
Federal Aviation Administration - Air Traffic Control
General Services Administration - Travel Management Services

Risk Flags

Limited competition
Potential for price inflation due to few bidders
Dependence on specialized service providers

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $42.0 million to CSI AVIATION, INC. UNSCHEDULED AIR CHARTER SERVICES ORIGINATING OUT OF MESA, ARIZONA. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is CSI AVIATION, INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $42.0 million.

What is the period of performance?

Start: 2013-03-28. End: 2014-04-01.

What was the specific justification for using unscheduled air charter services instead of commercial flights?

The justification for using unscheduled air charter services typically stems from operational requirements that cannot be met by commercial airlines. This can include the need for direct point-to-point travel, flexibility in scheduling, transport of specialized equipment or personnel, or operations to locations not served by commercial routes. For agencies like ICE, unscheduled charters might be critical for rapid response, secure transport of individuals, or logistical support in remote or time-sensitive situations. Without specific details on the flights conducted under this contract, it's presumed that these unique needs drove the decision to procure charter services.

How does the per-flight cost compare to commercial air travel for similar distances?

Directly comparing the per-flight cost of unscheduled air charters to commercial air travel is challenging due to fundamental differences in service. Commercial flights operate on fixed schedules, offer varying classes of service, and benefit from economies of scale. Unscheduled charters are bespoke, often require dedicated aircraft, and incur costs associated with flight planning, crew, and aircraft positioning. While a single seat on a commercial flight might be cheaper, chartering an entire aircraft for specific needs, especially for groups or direct routes, can be more cost-effective or the only viable option. The $42 million award, spread over approximately 369 days, suggests a significant operational tempo, but without knowing the number of flights, routes, and aircraft types, a precise per-flight cost comparison is not feasible.

What are the primary risks associated with relying on a limited number of bidders for specialized air charter services?

Relying on a limited number of bidders, as seen with the two offers received for this contract, presents several risks. Firstly, it can reduce the government's leverage in price negotiations, potentially leading to higher costs than if there were more competition. Secondly, it increases dependence on a small pool of providers, which could lead to service disruptions if one provider faces operational issues, financial instability, or decides to exit the market. This concentration also limits the government's ability to switch providers easily. Furthermore, a lack of robust competition might disincentivize innovation and efficiency improvements among the existing providers.

What performance metrics were likely used to evaluate the success of this contract?

Performance metrics for an unscheduled air charter services contract would likely focus on operational reliability, safety, and responsiveness. Key metrics could include on-time performance (adherence to requested departure and arrival times), flight completion rates (ensuring flights are not cancelled or diverted unnecessarily), aircraft availability, adherence to safety regulations and standards, and passenger/cargo satisfaction. For ICE, mission-critical timelines and security protocols would also be paramount. The firm fixed-price nature of the contract implies that meeting all performance requirements within the agreed price was the primary measure of success.

How does this spending compare to other federal agencies procuring similar air charter services?

Comparing this $42 million award to other federal agencies' spending on similar air charter services requires access to broader government procurement data. However, agencies with significant field operations, law enforcement responsibilities, or logistical needs in remote areas, such as the Department of Defense, FBI, or other components of DHS, also procure air charter services. The scale of this contract suggests a substantial and ongoing requirement for ICE. Without comparative data on the volume, duration, and specific types of services procured by other agencies, it's difficult to definitively state whether this spending is high, low, or average relative to the federal landscape.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Travel Arrangement and Reservation Services › All Other Travel Arrangement and Reservation Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HSCECR-13-Q-00015

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3700 RIO GRANDE BLVD NW, ALBUQUERQUE, NM, 87107

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $60,144,502

Exercised Options: $46,298,173

Current Obligation: $42,010,603

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS33F0025V

IDV Type: FSS

Timeline