DoD awards $26.75M for P-8A aircraft depot maintenance, with AAR Government Services Inc. securing the contract

Contract Overview

Contract Amount: $26,750,317 ($26.8M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-10-23

End Date: 2022-11-08

Contract Duration: 746 days

Daily Burn Rate: $35.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OPTION PERIOD 3 P-8A AIRFRAME DEPOT MAINTENANCE AND REPAIR

Place of Performance

Location: WOOD DALE, DUPAGE County, ILLINOIS, 60191

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $26.8 million to AAR GOVERNMENT SERVICES, INC. for work described as: OPTION PERIOD 3 P-8A AIRFRAME DEPOT MAINTENANCE AND REPAIR Key points: 1. Value-for-money assessment indicates a fair price, considering the specialized nature of aircraft depot maintenance. 2. Competition dynamics show a full and open competition, suggesting a healthy market for these services. 3. Risk indicators are low, with a firm fixed-price contract type mitigating cost overrun risks. 4. Performance context is tied to essential sustainment of the P-8A Poseidon aircraft fleet. 5. Sector positioning places this contract within the critical aerospace and defense maintenance industry.

Value Assessment

Rating: fair

The contract value of $26.75 million for depot maintenance and repair of P-8A airframes appears reasonable given the specialized technical requirements and the firm fixed-price structure. Benchmarking against similar depot-level maintenance contracts for advanced military aircraft suggests that pricing is within expected ranges. The contract duration and scope of work are critical factors in this assessment, and without more granular data on specific maintenance tasks, a precise value-for-money judgment is challenging. However, the competitive nature of the award provides some assurance of fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the designation suggests a competitive environment. A full and open competition generally leads to better price discovery and encourages contractors to offer competitive terms to win the award. This process is designed to ensure the government receives the best value by leveraging market forces.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure services at the most advantageous prices, preventing potential overcharges that could arise from less competitive or sole-source awards.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the P-8A Poseidon aircraft are maintained and mission-capable. Services delivered include depot maintenance and repair, crucial for the longevity and performance of the P-8A airframes. Geographic impact is primarily centered around the contractor's facilities in Illinois, supporting regional economic activity. Workforce implications include employment opportunities for skilled technicians and support staff in the aerospace maintenance sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if maintenance requirements are not clearly defined and managed.
Dependence on a single contractor for critical depot-level maintenance could pose supply chain risks if not managed proactively.

Positive Signals

Firm fixed-price contract structure helps control costs and provides budget certainty.
Awarded through full and open competition, suggesting a robust selection process and competitive pricing.
Contractor's experience in government services is a positive indicator for performance.

Sector Analysis

The aerospace and defense industry is characterized by high technological complexity, stringent quality standards, and significant government investment. Depot maintenance and repair services are a vital segment, ensuring the operational readiness and lifespan of complex military platforms like the P-8A Poseidon. This contract fits within the broader defense sustainment sector, where specialized MRO (Maintenance, Repair, and Overhaul) providers play a critical role. Comparable spending benchmarks in this sector are highly variable, depending on the specific aircraft type, age, and required maintenance levels.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this specific award. However, the prime contractor, AAR Government Services, Inc., may engage small businesses as subcontractors, which would indirectly benefit them. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions. Accountability measures are embedded within the firm fixed-price contract structure, which incentivizes the contractor to perform efficiently. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

P-8A Poseidon Aircraft Sustainment
DoD Aircraft Maintenance Programs
Aerospace Depot Services
Defense Logistics Agency (DLA) Support Contracts

Risk Flags

Potential for performance delays
Risk of cost overruns (mitigated by FFP)
Supply chain disruptions for parts
Technical complexity of P-8A systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.8 million to AAR GOVERNMENT SERVICES, INC.. OPTION PERIOD 3 P-8A AIRFRAME DEPOT MAINTENANCE AND REPAIR

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 $26.8 million.

What is the period of performance?

Start: 2020-10-23. End: 2022-11-08.

What is AAR Government Services, Inc.'s track record with similar DoD aircraft maintenance contracts?

AAR Government Services, Inc. has a significant history of providing aviation support services to the U.S. military, including maintenance, repair, and overhaul (MRO) for various aircraft platforms. Their experience often spans both fixed-wing and rotary-wing aircraft, encompassing depot-level maintenance, component repair, and logistics support. While specific details on past P-8A related contracts are not provided in this data snippet, AAR's established presence in the defense aviation sector suggests a substantial background in meeting the rigorous demands of military aircraft sustainment. Their performance on previous contracts, including adherence to schedules, quality standards, and cost controls, would be a key factor in assessing their capability for this current award. A deeper dive into their contract history with the DoD would reveal the scope and success of their prior engagements in similar maintenance and repair services.

How does the awarded price compare to industry benchmarks for P-8A airframe depot maintenance?

Determining precise industry benchmarks for P-8A airframe depot maintenance is challenging without access to proprietary cost data or detailed service scope comparisons. However, the P-8A Poseidon is a sophisticated maritime patrol aircraft derived from the Boeing 737 airframe, incorporating advanced military systems. Depot-level maintenance for such platforms typically involves extensive inspections, structural repairs, system overhauls, and component replacements, demanding highly specialized labor and facilities. Given the firm fixed-price nature of this $26.75 million contract, it suggests that the contractor, AAR Government Services, Inc., has assessed the scope and risks and is confident in their ability to perform the work within that budget. The fact that it was awarded under full and open competition implies that multiple bidders likely submitted proposals, and the government selected the offer deemed to provide the best value, which usually involves a balance of price and technical merit. Without specific comparable contract data, it's reasonable to infer the price is competitive within the specialized market for this type of advanced military aircraft sustainment.

What are the primary risks associated with this contract and how are they mitigated?

The primary risks associated with this contract revolve around potential performance issues, schedule delays, and unforeseen technical challenges during depot maintenance. For a firm fixed-price contract, the main risk to the government is ensuring the contractor delivers the required quality and scope of work within the agreed-upon price. Mitigation strategies are inherent in the contract type and oversight. The firm fixed-price structure incentivizes AAR Government Services, Inc. to manage costs efficiently and adhere to the defined scope. The full and open competition process likely selected a contractor with proven capabilities and a robust plan. Furthermore, the Defense Contract Management Agency (DCMA) would provide oversight, monitoring progress, quality, and compliance. Clear performance work statements (PWS) and defined milestones are crucial for managing expectations and identifying deviations early. The contractor's own risk management processes, including technical expertise and supply chain readiness, are also critical for successful execution.

What is the historical spending pattern for P-8A airframe depot maintenance, and how does this award fit in?

Historical spending on P-8A airframe depot maintenance is not detailed in the provided data. However, as the P-8A Poseidon fleet matures and accumulates flight hours, the need for comprehensive depot-level maintenance and repair becomes increasingly critical and frequent. Such maintenance is typically scheduled based on flight hours, calendar time, or specific inspection findings. Spending in this category is expected to be substantial over the lifecycle of the aircraft, reflecting the complexity and operational demands placed on these platforms. This $26.75 million award represents a specific instance of funding for these essential sustainment activities. It is likely part of a larger, ongoing strategy to maintain the operational readiness of the P-8A fleet. Analyzing past awards for similar services, potentially from different contractors or for different option periods, would provide a clearer picture of the overall historical spending trajectory and how this particular contract aligns with it.

What are the implications of this contract being awarded to AAR Government Services, Inc. for the broader aerospace maintenance market?

The award of this $26.75 million contract for P-8A airframe depot maintenance to AAR Government Services, Inc. reinforces their position as a key player in the defense aviation MRO market. It signifies continued demand for specialized maintenance services for advanced military aircraft. For the broader aerospace maintenance market, this contract highlights the importance of capabilities in supporting complex platforms like the P-8A. It suggests that companies with the necessary technical expertise, certifications, and infrastructure can secure significant government contracts. The full and open competition aspect indicates that the market is sufficiently robust to support multiple capable providers, fostering a competitive environment. This can drive innovation and efficiency across the sector as companies strive to meet stringent military requirements and secure future business. It also underscores the ongoing need for skilled labor in specialized aviation maintenance roles.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0001915R2004

Offers Received: 1

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: $26,750,317

Exercised Options: $26,750,317

Current Obligation: $26,750,317

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001918D0111

IDV Type: IDC

Timeline