Coast Guard leases VC-4 aircraft for $22.6M, a fixed-price incentive contract with 5 options

Contract Overview

Contract Amount: $22,573,771 ($22.6M)

Contractor: Truestone, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2005-09-16

End Date: 2010-09-15

Contract Duration: 1,825 days

Daily Burn Rate: $12.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE INCENTIVE

Sector: Other

Official Description: VC-4 REPLACEMENT LEASE. BASE W/FIVE OPTIONS.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20593

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $22.6 million to TRUESTONE, LLC for work described as: VC-4 REPLACEMENT LEASE. BASE W/FIVE OPTIONS. Key points: 1. The contract's fixed-price incentive structure aims to balance cost control with performance incentives. 2. With a base period and five options, the contract offers flexibility for long-term needs. 3. The award to TRUESTONE, LLC suggests a competitive process that yielded a selected vendor. 4. The contract duration of 1825 days indicates a significant commitment for aircraft leasing. 5. The absence of small business set-aside suggests the primary competition was not specifically targeted towards small businesses.

Value Assessment

Rating: fair

The total contract value of $22.6 million over approximately five years for aircraft leasing requires careful benchmarking. Without specific details on the aircraft model, age, and included services, a precise value-for-money assessment is challenging. However, the fixed-price incentive (FPI) contract type suggests an expectation of cost control, with potential for shared savings if costs are below target. Comparing this to similar long-term aircraft leases for government agencies would provide a clearer picture of its competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically leads to a more robust selection process and potentially better pricing due to a wider range of offers. The presence of 5 bids suggests a reasonable level of interest from the market for this type of requirement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation from multiple vendors.

Public Impact

The U.S. Coast Guard is the primary beneficiary, securing essential aircraft for its operations. The contract supports the Coast Guard's mission readiness and operational capabilities. The services delivered include the leasing of VC-4 aircraft, likely for surveillance, transport, or other operational duties. The geographic impact is likely national, supporting Coast Guard operations across various regions. The contract may have implications for the aviation maintenance and leasing workforce, depending on service requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if incentive targets are not met or if scope creeps.
Dependence on a single contractor for critical aircraft assets could pose a risk.
The long-term nature of the lease requires careful monitoring to ensure continued value.
Aircraft availability and maintenance schedules could impact operational continuity.

Positive Signals

Fixed-price incentive contract structure encourages cost efficiency.
Multiple options provide flexibility to adapt to changing needs.
Full and open competition suggests a well-vetted selection process.
The award to TRUESTONE, LLC indicates a qualified vendor was selected.

Sector Analysis

The aviation leasing sector is a critical component of government logistics and operational support. This contract fits within the broader category of government procurement for specialized equipment and services. The market for government aircraft leases is competitive, with various providers offering tailored solutions. Benchmarking this lease against similar government contracts for fixed-wing aircraft would provide context on pricing and terms.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false. This indicates that the competition was open to all eligible businesses, and there was no specific requirement for small business participation or subcontracting. The impact on the small business ecosystem is therefore minimal, as the primary contract was not designed to directly benefit them.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices. The fixed-price incentive structure includes mechanisms for monitoring performance against targets and costs. Transparency would be facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Coast Guard Aviation Programs
Department of Homeland Security Aircraft Procurement
Government Aircraft Leasing Contracts
Fixed-Price Incentive Contracts

Risk Flags

Long-term contract duration requires ongoing monitoring for value.
Fixed-price incentive contracts can have complex cost-sharing mechanisms.
Dependence on a single vendor for critical assets.
Aircraft performance and availability are key to mission success.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $22.6 million to TRUESTONE, LLC. VC-4 REPLACEMENT LEASE. BASE W/FIVE OPTIONS.

Who is the contractor on this award?

The obligated recipient is TRUESTONE, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2005-09-16. End: 2010-09-15.

What is the specific model and age of the VC-4 aircraft being leased, and what are the key performance specifications?

The provided data does not specify the exact model or age of the VC-4 aircraft. The 'na' field indicates '336411', which is likely a National Stock Number (NSN) or internal identifier, but does not detail the aircraft type. Performance specifications are also not included in the summary data. To fully assess the value and suitability of this lease, understanding the aircraft's capabilities, such as range, payload, speed, and operational readiness, is crucial. This information would allow for a comparison against mission requirements and alternative aircraft solutions.

How does the per-hour or per-flight-hour cost of this lease compare to market rates for similar aircraft, considering the lease duration and included services?

The provided data does not include per-hour or per-flight-hour cost breakdowns, nor does it detail the specific services included in the lease (e.g., maintenance, crew, insurance). The total contract value of $22.6 million over 1825 days (approximately 5 years) averages to about $4.5 million per year. Without knowing the number of flight hours anticipated or the specific services bundled, a direct comparison to market rates is not feasible. To perform this analysis, one would need to obtain the contract's detailed schedule of services and pricing, and then benchmark against industry data for similar aircraft leases, adjusting for factors like utilization rates and service inclusions.

What were the key performance targets and incentive structures defined in the Fixed Price Incentive (FPI) contract, and how were they measured?

The summary data indicates the contract type is 'FIXED PRICE INCENTIVE' (pt: 'FIXED PRICE INCENTIVE'), but it does not detail the specific performance targets or incentive mechanisms. FPI contracts typically establish a target cost, a target profit, and a price ceiling. If the final cost is below the target cost, both the contractor and the government share in the savings according to a predetermined formula. Conversely, if the final cost exceeds the target cost, the contractor assumes a greater share of the overrun up to the price ceiling. Performance targets could relate to factors like aircraft availability, maintenance response times, or mission completion rates. A thorough review of the contract's 'Special Contract Requirements' or 'Performance Work Statement' would be necessary to understand these details.

What is TRUESTONE, LLC's track record with similar government aviation leasing contracts, particularly with the U.S. Coast Guard or Department of Homeland Security?

The provided data identifies TRUESTONE, LLC as the contractor but does not offer insights into their specific track record with aviation leasing or government contracts. To assess their performance history, one would need to consult federal procurement databases (like SAM.gov or FPDS) for past awards, contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any reported disputes or terminations. Understanding their experience with similar aircraft types, contract values, and agency clients would help gauge their reliability and capability in fulfilling this VC-4 replacement lease.

How does the $22.6 million total contract value compare to historical spending on similar aircraft leasing or acquisition by the U.S. Coast Guard over the past decade?

The total contract value of $22.6 million for the VC-4 replacement lease over approximately five years represents an average annual commitment of around $4.5 million. To compare this to historical spending, one would need to analyze the U.S. Coast Guard's budget and contract awards for aircraft leasing and acquisition over the last ten years. This would involve searching procurement databases for contracts with similar aircraft types (if applicable), lease durations, and total values. Understanding the trend in Coast Guard aviation spending—whether it's increasing, decreasing, or stable—and how this specific contract fits within that trend would provide valuable context on its relative scale and significance.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HSCG23-05-R-DAV334

Offers Received: 5

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nana Regional Corporation Inc (UEI: 079253761)

Address: 711 H STREET SUITE 510B, ANCHORAGE, AK, 99501

Business Categories: 8(a) Program Participant, Category Business, Emerging Small Business, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $66,527,401

Exercised Options: $22,573,771

Current Obligation: $22,573,771

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline