Interior Department awards $23M helicopter services contract to Air Center Helicopters, Inc. for nearly 2,000 days of support

Contract Overview

Contract Amount: $23,065,960 ($23.1M)

Contractor: AIR Center Helicopters, Inc

Awarding Agency: Department of the Interior

Start Date: 2008-05-30

End Date: 2013-09-30

Contract Duration: 1,949 days

Daily Burn Rate: $11.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: HELICOPTER SERVICES IN SUPPORT OF THE US NAVY.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76106

State: Texas Government Spending

Plain-Language Summary

Department of the Interior obligated $23.1 million to AIR CENTER HELICOPTERS, INC for work described as: HELICOPTER SERVICES IN SUPPORT OF THE US NAVY. Key points: 1. Contract value appears reasonable given the extended duration and specialized nature of the services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract's duration and fixed-price with economic price adjustment structure present moderate financial risk. 4. Services support US Navy operations, indicating a critical role in defense readiness. 5. The contractor has a significant period of performance, suggesting established operational capacity. 6. Geographic focus on Texas for operations.

Value Assessment

Rating: good

The contract's total value of approximately $23 million over nearly 2,000 days suggests an average daily rate of around $11,800. This rate needs to be benchmarked against similar helicopter support services for military operations. Given the specialized nature of supporting naval aviation, this rate may be within a reasonable range, especially considering the inclusion of economic price adjustments which account for fluctuating operational costs. Without direct comparable contract data, a definitive value-for-money assessment is challenging, but the duration and scope suggest a substantial investment.

Cost Per Unit: Approximately $11,800 per day (based on total value and duration).

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 degree of competition, though the exact number of bids received and their competitiveness would provide a clearer picture of price discovery. A competitive process generally leads to better pricing for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives the best value for its expenditure.

Public Impact

The primary beneficiaries are the US Navy personnel who receive essential helicopter support for their operations. Services include nonscheduled chartered passenger air transportation, crucial for logistics and personnel movement. Operations are primarily based in Texas, impacting the local economy and workforce in that region. The contract supports military readiness and operational capabilities of the US Navy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to economic price adjustment clauses if fuel or other operational costs escalate significantly.
Dependence on a single contractor for a critical support function could pose a risk if performance issues arise.
The long duration of the contract may limit opportunities for future competition and innovation.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Contractor has secured a significant contract, suggesting a level of trust and capability.
The fixed-price nature, even with adjustments, provides some cost certainty.
Long contract duration allows for stable planning and operational efficiency for both the government and the contractor.

Sector Analysis

This contract falls within the aerospace and defense support services sector, specifically focusing on aviation support. The market for specialized helicopter services for military applications is competitive, with a number of established providers. The total federal spending on nonscheduled chartered passenger air transportation (NAICS 481211) can vary significantly year to year, but contracts of this nature are essential for maintaining operational readiness and logistical support for various government agencies, including the Department of Defense and Interior.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. The contractor, Air Center Helicopters, Inc., is likely a mid-to-large-sized business given the contract value. Further analysis would be needed to determine if any small business subcontracting opportunities were mandated or voluntarily pursued.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Interior's contracting officers and potentially the US Navy's operational units relying on the services. Accountability measures are usually embedded within the contract's performance work statement, including service level agreements and reporting requirements. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly accessible. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Naval Aviation Support Services
Department of Defense Aviation Contracts
Chartered Air Transportation Services
Federal Aviation Support Contracts

Risk Flags

Long contract duration may limit future competition.
Economic price adjustment clauses introduce cost escalation risk.
Dependence on a single contractor for critical support.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $23.1 million to AIR CENTER HELICOPTERS, INC. HELICOPTER SERVICES IN SUPPORT OF THE US NAVY.

Who is the contractor on this award?

The obligated recipient is AIR CENTER HELICOPTERS, INC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $23.1 million.

What is the period of performance?

Start: 2008-05-30. End: 2013-09-30.

What is the track record of Air Center Helicopters, Inc. with federal contracts, particularly for similar aviation support services?

Air Center Helicopters, Inc. has a history of federal contracting, primarily with agencies like the Department of the Interior and the Department of Defense. Their contract portfolio often includes aviation support, such as helicopter charter and transport services. Analyzing their past performance on similar contracts would involve reviewing contract close-out reports, any documented performance issues or commendations, and their history of on-time delivery and adherence to specifications. A review of federal procurement data would reveal the number and value of previous awards, the agencies they've served, and the types of services rendered. This historical data is crucial for assessing their reliability and capability to fulfill the current $23 million contract over its extended period.

How does the daily rate of approximately $11,800 compare to market rates for similar helicopter support services for military operations?

The approximate daily rate of $11,800 for helicopter services needs careful benchmarking. Factors influencing this rate include the type and capacity of helicopters used, the specific mission requirements (e.g., passenger transport, cargo, specialized operations), crew costs, maintenance, insurance, and geographic location. Military-specific operations often incur higher costs due to stringent safety, security, and operational readiness requirements. Comparing this rate to publicly available data for similar military aviation support contracts, or to rates charged by other large aviation service providers to government entities, would be necessary. If this rate is significantly higher than comparable contracts awarded under similar competitive conditions, it could indicate a potential value-for-money concern.

What are the primary risks associated with the 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type for this helicopter service?

The FPEPA contract type introduces specific risks for both the government and the contractor. For the government, the primary risk is potential cost escalation if the economic price adjustment clauses are triggered frequently or by large margins. These adjustments are typically tied to indices for fuel, labor, or other direct costs. While intended to protect the contractor from unforeseen cost increases and ensure continued service, it can lead to higher-than-budgeted expenditures for the government. The risk is mitigated by carefully defined adjustment formulas and caps. For the contractor, the risk is that the adjustments might not fully cover actual cost increases, especially if indices lag behind real-world price hikes or if operational inefficiencies arise.

What is the historical spending pattern for nonscheduled chartered passenger air transportation (NAICS 481211) by the Department of the Interior?

Historical spending by the Department of the Interior on NAICS code 481211 (Nonscheduled Chartered Passenger Air Transportation) can be analyzed through federal procurement databases. This analysis would reveal trends in annual spending, the primary agencies within the DOI utilizing these services, and the types of operations supported. For instance, spending might fluctuate based on specific mission needs, such as supporting remote field operations, emergency response, or specialized scientific expeditions. Understanding this historical context helps in evaluating whether the $23 million award represents a typical investment, an increase, or a decrease in this category of spending for the Department, and whether it aligns with the agency's operational priorities.

How does the competition level (3 bidders) for this contract potentially impact pricing and service quality compared to contracts with more bidders?

A competition involving three bidders generally suggests a moderately competitive environment. While more bidders typically lead to more aggressive pricing and potentially higher service quality due to increased market pressure, three bidders can still result in a fair price discovery process. The key is whether these three bidders were capable and submitted competitive proposals. If the bidders were all highly qualified and their bids were closely aligned, it indicates a healthy competition. However, if the number of bidders was limited due to high barriers to entry (e.g., specialized equipment, certifications), the government might not have achieved the lowest possible price. Analyzing the bid spread and the qualifications of the non-selected bidders would provide further insight into the impact of this competition level.

What are the potential implications of the contract's long duration (1949 days) on contractor performance and government oversight?

The long duration of this contract, spanning over five years, has several implications. For the contractor, it allows for long-term planning, investment in specialized equipment and personnel, and potentially greater operational efficiency through established routines. This stability can lead to consistent performance. However, it also means the government is committed to a single provider for an extended period, potentially reducing flexibility and the opportunity to benefit from market innovations or price reductions that might emerge. For government oversight, a longer contract requires sustained vigilance to ensure performance standards are met throughout its life cycle. Regular performance reviews, contract management, and proactive issue resolution are critical to mitigate risks associated with long-term commitments and ensure continued value.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 8008-01

Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 150 AVIATION WAY HNGR 17N, FORT WORTH, TX, 90

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

Financial Breakdown

Contract Ceiling: $36,121,842

Exercised Options: $23,209,557

Current Obligation: $23,065,960

Contract Characteristics

Cost or Pricing Data: NO

Timeline