DoD's $81.5M rotary wing airlift contract awarded to Construction Helicopters, Inc. for Afghanistan operations

Contract Overview

Contract Amount: $81,512,525 ($81.5M)

Contractor: Construction Helicopters, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-05-03

End Date: 2021-03-31

Contract Duration: 1,428 days

Daily Burn Rate: $57.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF ROTARY WING AIRLIFT SERVICES IN AFGHANISTAN

Plain-Language Summary

Department of Defense obligated $81.5 million to CONSTRUCTION HELICOPTERS, INC. for work described as: IGF::OT::IGF ROTARY WING AIRLIFT SERVICES IN AFGHANISTAN Key points: 1. Contract value represents significant investment in critical airlift support. 2. Full and open competition suggests a potentially competitive bidding environment. 3. Contract duration of 1428 days indicates a long-term need for services. 4. Fixed-price contract type aims to control costs for the government. 5. Awarded by USTRANSCOM, highlighting strategic logistical importance. 6. Services provided under NAICS code 481211 (Nonscheduled Chartered Passenger Air Transportation).

Value Assessment

Rating: fair

The contract value of $81.5 million over approximately four years for rotary wing airlift services in Afghanistan appears substantial. Benchmarking against similar large-scale airlift contracts in contingency operations is difficult without more specific service details and performance metrics. The firm fixed-price structure provides some cost certainty, but the overall value for money depends heavily on the operational effectiveness and efficiency of the services rendered in a challenging environment. The award amount is within a range expected for such specialized services, but a detailed cost breakdown would be needed for a more precise assessment.

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. The presence of 3 bidders suggests a moderate level of competition for this specialized service. While multiple bidders are positive, the specific nature of rotary wing airlift services in a complex operational theater like Afghanistan may limit the pool of qualified and willing contractors. The competition level is adequate but could potentially be enhanced with broader outreach or by breaking down the requirement into smaller, more accessible lots.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering price discovery and potentially leading to lower costs. The fact that three bids were received suggests that the government received multiple offers, which is a positive sign for achieving a fair market price.

Public Impact

Provides essential rotary wing airlift services for Department of Defense operations in Afghanistan. Supports military personnel and equipment movement within the operational theater. Contributes to the logistical backbone of U.S. military presence in the region. Potentially impacts local Afghan workforce through indirect employment opportunities. Ensures continuity of critical transportation services for mission success.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Geopolitical instability in Afghanistan could impact service delivery and costs.
Reliance on a single prime contractor for critical airlift raises performance risk.
Potential for cost overruns if operational demands exceed initial projections.
Limited visibility into subcontractor performance and adherence to standards.

Positive Signals

Firm fixed-price contract provides cost predictability.
Awarded through full and open competition, suggesting a competitive process.
Long contract duration indicates a stable, ongoing requirement.
Experienced contractor likely possesses specialized knowledge for the mission.

Sector Analysis

Rotary wing airlift services, particularly in support of defense operations, represent a niche but critical segment within the broader aerospace and defense industry. The market for specialized aviation services in complex environments is often characterized by high barriers to entry due to regulatory, safety, and operational requirements. This contract fits within the defense logistics and transportation sector, where demand is driven by military operational needs. Comparable spending benchmarks are difficult to establish without detailed service scope, but large-scale airlift contracts in support of overseas operations can range from tens to hundreds of millions of dollars.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the prime contractor is Construction Helicopters, Inc., and there is no explicit mention of small business set-asides or subcontracting goals. While the contract itself was competed fully and openly, the prime contractor's size and the nature of the service may limit opportunities for small businesses to directly participate as subcontractors unless they offer highly specialized niche services. Further investigation into subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the U.S. Transportation Command (USTRANSCOM) and potentially the Department of Defense's Inspector General. Mechanisms likely include performance monitoring, regular reporting requirements from the contractor, and site visits to ensure compliance with contract terms and safety regulations. Transparency is generally limited for defense contracts of this nature, with specific operational details often classified or sensitive. The Inspector General would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Afghanistan Security Forces Fund (ASFF)
Theater Express
Expeditionary Air Wing Operations
Contingency Contracting
Military Sealift Command (MSC) Contracts

Risk Flags

Operational Environment Risk
Contractor Performance Risk
Logistical Complexity
Security Threats

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.5 million to CONSTRUCTION HELICOPTERS, INC.. IGF::OT::IGF ROTARY WING AIRLIFT SERVICES IN AFGHANISTAN

Who is the contractor on this award?

The obligated recipient is CONSTRUCTION HELICOPTERS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $81.5 million.

What is the period of performance?

Start: 2017-05-03. End: 2021-03-31.

What is the track record of Construction Helicopters, Inc. in performing similar large-scale airlift contracts, particularly in challenging operational environments?

Assessing the track record of Construction Helicopters, Inc. requires a review of their past performance on similar contracts. Information regarding their experience with large-scale rotary wing airlift services, especially in contingency operations or complex geopolitical regions like Afghanistan, is crucial. This would involve examining past contract awards, performance evaluations (e.g., CPARS reports), and any history of disputes or contract terminations. A contractor's ability to consistently meet performance standards, safety requirements, and delivery schedules in demanding environments is a key indicator of their capability and reliability for future contracts. Without specific performance data for Construction Helicopters, Inc., it is difficult to definitively assess their suitability for this $81.5 million contract.

How does the awarded price compare to market rates for similar rotary wing airlift services in comparable operational theaters?

Determining if the $81.5 million contract represents good value requires benchmarking against prevailing market rates for similar rotary wing airlift services. This comparison should consider factors such as the type of helicopters used, crew costs, maintenance, insurance, operational tempo, and the specific risks associated with the operating environment in Afghanistan. Data from other government contracts or commercial aviation providers offering similar services in comparable theaters would be essential for this analysis. The firm fixed-price nature of the contract provides some cost certainty, but understanding the underlying cost structure and comparing it to industry benchmarks is vital to assess whether the government secured competitive pricing for these critical services.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

The primary risks associated with this contract likely stem from the challenging operational environment in Afghanistan, including security threats, logistical complexities, and potential political instability, which could impact service delivery and increase costs. There's also a risk associated with reliance on a single prime contractor for critical airlift functions. Mitigation strategies would typically involve robust security protocols for aircraft and personnel, contingency planning for disruptions, close monitoring of contractor performance by USTRANSCOM, and potentially pre-defined surge capabilities or alternative support plans. The firm fixed-price contract aims to mitigate cost overrun risks, but performance failures could still lead to mission impacts. Detailed risk assessments and mitigation plans are standard components of such defense contracts.

How effective has USTRANSCOM been in managing similar large-scale aviation support contracts in overseas contingency operations?

The effectiveness of USTRANSCOM in managing large-scale aviation support contracts in overseas contingency operations is generally considered high, given their mandate and extensive experience. They are responsible for a significant portion of the military's global logistics and transportation. Success is typically measured by the reliability of airlift services, cost-efficiency, and the ability to adapt to changing operational requirements. While specific performance metrics for all past contracts are not publicly available, USTRANSCOM's continued role in awarding and overseeing such critical contracts suggests a level of competence. However, like any large organization managing complex procurements, there can be instances of challenges or areas for improvement identified through contract performance reviews or IG audits.

What has been the historical spending trend for rotary wing airlift services by the Department of Defense in Afghanistan over the past decade?

Historical spending on rotary wing airlift services by the Department of Defense in Afghanistan has likely fluctuated significantly over the past decade, influenced by troop levels, mission objectives, and the evolving security situation. During peak operational periods, spending would have been considerably higher to support extensive troop movements, cargo transport, and casualty evacuation. As U.S. military presence has shifted and drawdown occurred, spending on such services would have decreased. Analyzing specific annual expenditures would require access to detailed budget data and contract award histories for this specific service category within the Afghanistan theater. It's probable that spending peaked in the earlier years of the conflict and has since trended downwards, though specific figures are not readily available in this dataset.

Industry Classification

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

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: HTC71117RR001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3679 BOWEN RD, HOWELL, MI, 48855

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

Financial Breakdown

Contract Ceiling: $81,512,525

Exercised Options: $81,512,525

Current Obligation: $81,512,525

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71117DR017

IDV Type: IDC

Timeline