DoD awards $120M for C-40A aircraft support, with AAR Government Services Inc. securing the deal

Contract Overview

Contract Amount: $120,315,411 ($120.3M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-07-26

End Date: 2023-08-31

Contract Duration: 1,497 days

Daily Burn Rate: $80.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-40A AIRCRAFT N743A

Place of Performance

Location: WOOD DALE, DUPAGE County, ILLINOIS, 60191

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $120.3 million to AAR GOVERNMENT SERVICES, INC. for work described as: C-40A AIRCRAFT N743A Key points: 1. Contract value of $120.3M for aircraft support services. 2. AAR Government Services, Inc. is the primary contractor. 3. The contract is a firm-fixed-price definitive contract. 4. Services are expected to be delivered over approximately 1500 days. 5. The contract was awarded by the Department of Defense. 6. The North American Industry Classification System (NAICS) code is 336411 (Aircraft Manufacturing).

Value Assessment

Rating: fair

The contract value of $120.3 million for C-40A aircraft support appears to be within a reasonable range for specialized aviation services. However, without specific details on the scope of work, duration, and performance metrics, a precise value-for-money assessment is challenging. Benchmarking against similar contracts for aircraft maintenance, repair, and overhaul (MRO) for comparable aircraft types would provide a clearer picture of whether the pricing is competitive.

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 two bids suggests a moderate level of competition for this requirement. While two bidders are better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of offers, potentially leading to more competitive pricing and better value.

Public Impact

The Department of Defense benefits from the continued operational readiness of its C-40A aircraft fleet. This contract ensures the availability of critical support services for military aviation assets. The contract's impact is primarily within the defense sector, supporting military operations. The workforce implications include employment opportunities within AAR Government Services, Inc. and its supply chain, likely in specialized aviation maintenance roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work expands beyond initial estimates.
Dependence on a single contractor for critical aircraft support could lead to supply chain vulnerabilities.
Ensuring consistent quality and timely delivery of services over the contract's duration requires robust oversight.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent procurement process.
Firm-fixed-price contract type helps to control costs and provides budget certainty for the government.
The contractor, AAR Government Services, Inc., likely possesses specialized expertise in aircraft support.

Sector Analysis

The aerospace and defense industry is a significant sector for federal spending, encompassing aircraft manufacturing, maintenance, repair, and overhaul (MRO) services. This contract falls within the MRO segment, which is crucial for maintaining the operational readiness of military fleets. Spending in this area is often driven by the need for specialized technical skills and certifications required for military aircraft.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (sb: false). While the prime contractor is AAR Government Services, Inc., there is no explicit information on subcontracting plans with small businesses. Further analysis would be needed to determine if subcontracting opportunities were offered or utilized, and their impact on the small business ecosystem.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration services to ensure compliance with terms and conditions. Oversight mechanisms would include performance monitoring, quality assurance, and financial reviews. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Aircraft Maintenance and Repair Services
Defense Logistics Agency Contracts
Air Mobility Command Support Contracts
Fixed-Wing Aircraft Procurement and Support

Risk Flags

Contract Duration
Contract Value
Contract Type
Competition Level

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $120.3 million to AAR GOVERNMENT SERVICES, INC.. C-40A AIRCRAFT N743A

Who is the contractor on this award?

The obligated recipient is AAR GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $120.3 million.

What is the period of performance?

Start: 2019-07-26. End: 2023-08-31.

What is the historical spending pattern for C-40A aircraft support by the Department of Defense?

Analyzing historical spending for C-40A aircraft support requires access to detailed federal procurement data over several fiscal years. Typically, such contracts are awarded periodically to ensure continued operational readiness. Spending patterns can fluctuate based on aircraft age, maintenance requirements, fleet size, and the availability of competing contractors. Without specific historical data for this particular aircraft type and its support services, it's difficult to establish a precise trend. However, it's common for the DoD to invest significant sums in maintaining its aviation assets, with contracts often ranging from tens to hundreds of millions of dollars over their lifecycle, depending on the scope and duration.

How does the awarded amount compare to similar contracts for aircraft support services?

Comparing the $120.3 million award for C-40A aircraft support requires identifying contracts with similar scope, aircraft type, duration, and service level. Contracts for MRO (Maintenance, Repair, and Overhaul) of military aircraft can vary widely. For example, contracts for larger, more complex aircraft like transport planes or bombers might command higher values due to extensive systems and airframe requirements. Conversely, support for smaller or less complex aircraft might be less expensive. The firm-fixed-price nature of this contract suggests a defined scope, which aids in cost control. A benchmark comparison would ideally look at contracts awarded within the last 1-3 years for similar aircraft platforms by the DoD or other military branches to assess if the pricing is competitive.

What are the key performance indicators (KPIs) expected under this contract?

Key performance indicators (KPIs) for aircraft support contracts typically focus on ensuring the operational readiness and safety of the aircraft. These often include metrics such as aircraft availability rates, turnaround times for maintenance and repairs, adherence to scheduled maintenance, quality of work performed (e.g., defect rates), and compliance with safety regulations. For the C-40A aircraft, specific KPIs might relate to mission capable rates, response times for unscheduled maintenance, and the successful completion of required inspections and overhauls. The firm-fixed-price contract structure implies that the contractor is incentivized to meet these KPIs efficiently to maintain profitability.

What is the track record of AAR Government Services, Inc. in fulfilling similar defense contracts?

AAR Government Services, Inc. has a substantial track record in providing aviation support services to government and defense clients. As a subsidiary of AAR Corp., it has experience in areas such as aircraft maintenance, repair, overhaul (MRO), logistics, and supply chain management for various military platforms. Reviewing past performance evaluations, contract awards, and any reported issues or successes in fulfilling similar contracts would provide insight into their capabilities and reliability. Their history with the Department of Defense and other government agencies would be a key indicator of their ability to meet the requirements of this C-40A aircraft support contract.

What are the potential risks associated with this contract, and how are they being mitigated?

Potential risks in this contract include scope creep, where the required services expand beyond the initial agreement, potentially leading to cost overruns. Technical risks related to the complexity of aircraft maintenance and the availability of specialized parts are also present. Furthermore, contractor performance issues, such as delays or quality deficiencies, could impact aircraft readiness. Mitigation strategies typically involve robust contract management by the DCMA, clear definition of scope and deliverables, performance monitoring, and contingency planning. The firm-fixed-price structure itself acts as a risk mitigation tool for the government by capping costs for defined services.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001919R0041

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1100 N WOOD DALE RD, WOOD DALE, IL, 60191

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

Financial Breakdown

Contract Ceiling: $120,315,411

Exercised Options: $120,315,411

Current Obligation: $120,315,411

Actual Outlays: $48,737,656

Subaward Activity

Number of Subawards: 44

Total Subaward Amount: $10,486,078

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline