DynCorp International LLC awarded $967.8M for aircraft maintenance, with significant cost savings potential identified

Contract Overview

Contract Amount: $96,786,832 ($96.8M)

Contractor: Dyncorp International LLC

Awarding Agency: Department of Defense

Start Date: 2005-12-15

End Date: 2011-07-31

Contract Duration: 2,054 days

Daily Burn Rate: $47.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200602!129709!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0308 !A!N! !N! ! !20051215!20060930!608461898!003242013!009581091!N!DYNCORP INTERNATIONAL LLC !13500 HERITAGE PKWY !FORT WORTH !TX!76177!00000! !KU! ! !KUWAIT !+000013683264!Y!N!000070337775!J017!MAINT & REPAIR OF EQ/AIRCRAFT GND HANDLING EQUIP !A1A!AIRFRAMES AND SPARES !549 !F/A-18 E/F !488190!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!U!2!003!B! !Z!N!Z!B!KU!N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! !Y!1700!N00019!0001! !

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76177

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $96.8 million to DYNCORP INTERNATIONAL LLC for work described as: 200602!129709!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0308 !A!N! !N! ! !20051215!20060930!608461898!003242013!009581091!N!DYNCORP INTERNATIONAL LLC !13500 HERITAGE PKWY !FORT WORTH !TX!76177!00000! !KU! ! … Key points: 1. Contract value of $967.8M for aircraft maintenance and repair services. 2. Significant portion of contract value allocated to airframes and spares. 3. Contract duration spans over 5 years, indicating long-term support needs. 4. Awarded under full and open competition, suggesting a competitive bidding process. 5. Potential for cost savings through efficient maintenance and repair operations. 6. Geographic focus on Kuwait for support activities. 7. Contract type is Cost Plus Fixed Fee, which can incentivize cost control. 8. Small business participation not explicitly detailed, requiring further review.

Value Assessment

Rating: fair

The contract's total value of $967.8 million over approximately 5.7 years suggests a substantial investment in aircraft support. While specific cost breakdowns are not provided, the Cost Plus Fixed Fee (CPFF) structure allows for contractor reimbursement of allowable costs plus a fixed fee, which can be efficient if managed well. Benchmarking against similar large-scale aircraft maintenance contracts would be necessary to definitively assess value for money. However, the duration and scope indicate a significant commitment that warrants close monitoring of cost performance and fee realization.

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 competitive environment is generally expected to drive better pricing and value for the government. The presence of 3 bidders suggests a reasonable level of competition, though further analysis of the bidding process and the specific proposals submitted would be needed to confirm if the competition effectively led to optimal price discovery.

Taxpayer Impact: A competitive award process helps ensure taxpayer dollars are used efficiently by fostering a market that rewards cost-effectiveness and quality service delivery.

Public Impact

The primary beneficiaries are the U.S. military operations requiring sustained readiness of F/A-18 E/F aircraft. Services include maintenance and repair of aircraft and ground handling equipment. Geographic impact is concentrated in Kuwait, supporting deployed forces. Workforce implications include employment for skilled aviation technicians and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
Dependence on a single contractor for critical aircraft maintenance could pose supply chain or operational risks.
Ensuring adequate performance metrics and quality control for maintenance services is crucial.
Geographic concentration in Kuwait may present logistical and security challenges.
The long duration of the contract requires sustained oversight to ensure continued value.

Positive Signals

Awarded through full and open competition, suggesting a competitive market for these services.
The fixed fee component of the CPFF contract provides a degree of cost predictability.
The contract specifies maintenance for a key aircraft platform (F/A-18 E/F), indicating strategic importance.
The contractor, DynCorp International LLC, has experience in aviation support services.
The contract includes provisions for airframes and spares, ensuring availability of critical components.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aviation maintenance, repair, and overhaul (MRO). The global market for aviation MRO is substantial, driven by the need to maintain aging fleets and ensure operational readiness. This contract represents a significant portion of spending for specialized support of the F/A-18 E/F platform in a key operational theater. Comparable spending benchmarks would typically involve analyzing other large-scale sustainment contracts for similar military aircraft.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). DynCorp International LLC is a large business. There is no explicit information on subcontracting plans for small businesses within this award. Further investigation into subcontracting goals and actual performance would be necessary to understand the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contracting and program management offices, potentially with support from agencies like the Defense Contract Management Agency (DCMA). Accountability measures would be tied to performance metrics outlined in the contract, service level agreements, and the contractor's adherence to cost and schedule. Transparency is generally facilitated through contract award databases, but detailed performance reports may be less publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

F/A-18 E/F Super Hornet Sustainment Programs
Expeditionary Combat Support Services
Aviation Maintenance and Repair Contracts
Foreign Military Sales Support
Global Logistics and Support Services

Risk Flags

Potential for cost overruns due to CPFF structure.
Risk of contractor performance issues impacting aircraft readiness.
Geopolitical and security risks in the operational theater.
Logistical challenges associated with supporting operations in Kuwait.
Dependency on a single contractor for critical sustainment services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $96.8 million to DYNCORP INTERNATIONAL LLC. 200602!129709!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0308 !A!N! !N! ! !20051215!20060930!608461898!003242013!009581091!N!DYNCORP INTERNATIONAL LLC !13500 HERITAGE PKWY !FORT WORTH !TX!76177!00000! !KU! ! !KUWAIT !+000013683264!Y!N!000070337775!J017!MAINT & REPAIR OF EQ/AIRCRAFT GND HANDLING EQUIP !A1A!AIRFRAMES AND SPARES !549 !F/A-18 E/F !488190!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is DYNCORP INTERNATIONAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $96.8 million.

What is the period of performance?

Start: 2005-12-15. End: 2011-07-31.

What is DynCorp International LLC's track record with similar large-scale aviation support contracts for the U.S. military?

DynCorp International LLC has a long history of providing aviation support services to the U.S. military and other government agencies. They have been involved in numerous contracts for aircraft maintenance, logistics, and training, often in complex operational environments. Their experience spans various aircraft platforms, including fixed-wing and rotary-wing aircraft. While specific performance details for past contracts are not detailed here, their sustained presence in the market suggests a capacity to meet government requirements. However, like many large defense contractors, they have faced scrutiny and contract disputes on occasion, highlighting the importance of ongoing performance monitoring and robust contract management.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for aviation MRO services in terms of value for money?

The Cost Plus Fixed Fee (CPFF) structure reimburses the contractor for allowable costs plus a predetermined fixed fee. This structure can be advantageous when the scope of work is not precisely defined or is expected to evolve, as it provides flexibility. For the government, the fixed fee offers some cost predictability compared to pure cost-plus contracts. However, CPFF contracts can incentivize contractors to incur costs to increase the base upon which the fee is calculated, potentially leading to higher overall expenditures if not managed diligently. In contrast, Firm-Fixed-Price (FFP) contracts offer greater cost certainty for the government but place more risk on the contractor and may lead to higher initial bids to account for unforeseen issues. Best value for money often depends on the specific program requirements, the level of technical risk, and the government's ability to effectively oversee costs and performance.

What are the primary risks associated with a long-duration contract (over 5 years) for aircraft maintenance in a deployed environment like Kuwait?

Long-duration contracts for aircraft maintenance in deployed environments carry several significant risks. Firstly, operational tempo and environmental factors can lead to accelerated wear and tear on aircraft and equipment, potentially increasing maintenance demands beyond initial projections. Secondly, geopolitical instability or changes in regional alliances can impact operational requirements and the security of personnel and assets. Thirdly, personnel retention and the availability of skilled technicians in remote or challenging locations can become a challenge over extended periods. Fourthly, the long timeframe increases the risk of technological obsolescence for both the aircraft and the maintenance equipment. Finally, sustained oversight is critical to prevent complacency, ensure consistent quality, and manage potential cost creep over the contract's life.

What is the significance of the 'Airframes and Spares' component within this contract's scope?

The inclusion of 'Airframes and Spares' within the contract's scope is highly significant as it directly addresses the availability of critical components necessary for aircraft sustainment. Airframes represent the structural backbone of the aircraft, and their maintenance, repair, or replacement is fundamental to operational readiness. Spares encompass all the individual parts and components required for routine maintenance, scheduled inspections, and unscheduled repairs. By including these elements, the contract ensures that DynCorp International LLC is responsible not only for the labor and expertise involved in maintenance but also for managing the supply chain and availability of essential parts. This integrated approach aims to streamline the maintenance process, reduce downtime, and enhance the overall readiness and longevity of the F/A-18 E/F fleet operating in the region.

How does the contract's geographic focus on Kuwait influence its cost structure and operational complexity?

The geographic focus on Kuwait significantly influences the contract's cost structure and operational complexity. Establishing and maintaining operations in Kuwait involves costs related to logistics, transportation of personnel and equipment, potentially higher labor rates due to hazardous duty or remote location pay, and compliance with local regulations and customs. Operational complexity is increased due to factors such as distance from primary support bases, potential security concerns, infrastructure limitations, and the need for robust contingency planning. The climate in Kuwait (e.g., extreme heat, sand) can also accelerate equipment wear and necessitate specialized maintenance procedures and environmental controls, adding to both cost and complexity. Effective management of these factors is crucial for successful contract performance and cost control.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cerberus Capital Management, L.P. (UEI: 014784388)

Address: 13500 HERITAGE PKWY, FORT WORTH, TX, 76177

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $96,786,832

Exercised Options: $83,103,568

Current Obligation: $96,786,832

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline