DoD awards $38M for P-8A airframe depot maintenance, with AAR Government Services Inc. securing the contract

Contract Overview

Contract Amount: $38,075,183 ($38.1M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-10-14

End Date: 2025-03-31

Contract Duration: 1,264 days

Daily Burn Rate: $30.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DEPOT MAINTENANCE AND REPAIR OF P-8A AIRFRAMES

Place of Performance

Location: WOOD DALE, DUPAGE County, ILLINOIS, 60191

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $38.1 million to AAR GOVERNMENT SERVICES, INC. for work described as: DEPOT MAINTENANCE AND REPAIR OF P-8A AIRFRAMES Key points: 1. Contract focuses on depot maintenance and repair for P-8A airframes, a critical component of naval aviation. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. A firm-fixed-price contract type indicates that the contractor bears the risk of cost overruns. 4. The contract duration spans over three years, ensuring sustained support for the P-8A fleet. 5. The awarded amount of $38 million represents a significant investment in maintaining advanced military aircraft. 6. The contractor, AAR Government Services, Inc., has experience in aviation maintenance and support services.

Value Assessment

Rating: good

The contract value of $38 million for depot maintenance of P-8A airframes over approximately three years appears reasonable given the complexity and specialized nature of military aircraft maintenance. Benchmarking against similar contracts for depot-level support of advanced aircraft suggests that this pricing is within expected ranges. The firm-fixed-price structure further supports value by transferring cost overrun risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. While the number of bidders is not specified, this method generally fosters price discovery and encourages competitive pricing. The open nature of the competition suggests that the Department of the Navy sought the best value through a broad solicitation process.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most cost-effective solution for essential P-8A airframe maintenance, potentially leading to lower overall program costs.

Public Impact

The primary beneficiaries are the U.S. Navy's aviation units operating the P-8A Poseidon aircraft, ensuring fleet readiness. Services delivered include depot maintenance and repair, crucial for extending the operational life and performance of the aircraft. The geographic impact is primarily within the United States, where depot facilities are located and aircraft are serviced. Workforce implications include skilled technicians and support staff involved in complex aircraft maintenance and repair operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if unforeseen maintenance issues arise beyond the initial contract scope.
Dependence on a single contractor for a critical maintenance function could pose supply chain risks.
Ensuring consistent quality and adherence to stringent military specifications throughout the contract duration.

Positive Signals

Firm-fixed-price contract mitigates cost overrun risk for the government.
Full and open competition suggests a robust selection process and potential for competitive pricing.
Long-term contract provides stability and predictability for P-8A maintenance planning.
Contractor's experience in government services likely ensures familiarity with requirements.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft maintenance and repair services. The P-8A Poseidon is a maritime patrol and reconnaissance aircraft, a specialized platform requiring significant upkeep. The market for military aircraft depot maintenance is characterized by high barriers to entry due to specialized facilities, skilled labor, and stringent regulatory requirements. Spending in this area is driven by the need to maintain the operational readiness and longevity of aging and advanced military fleets.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, the prime contractor, AAR Government Services, Inc., may engage small businesses as subcontractors for specific components or services, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Navy's contracting and program management offices, ensuring compliance with terms and specifications. Accountability measures are embedded in the firm-fixed-price structure, performance metrics, and quality assurance provisions. Transparency is facilitated through contract award announcements and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

P-8A Poseidon Aircraft Program
Naval Aviation Maintenance Programs
Defense Contract Management Agency (DCMA) Oversight
Aircraft Depot Maintenance Services

Risk Flags

Potential for extended downtime if maintenance issues are more complex than anticipated.
Reliance on a single awardee for critical maintenance could create single-source dependency risks.
Ensuring adequate surge capacity within the contractor's facilities to meet unexpected fleet demands.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.1 million to AAR GOVERNMENT SERVICES, INC.. DEPOT MAINTENANCE AND REPAIR OF P-8A AIRFRAMES

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $38.1 million.

What is the period of performance?

Start: 2021-10-14. End: 2025-03-31.

What is AAR Government Services, Inc.'s track record with similar Department of Defense contracts, particularly for aircraft depot maintenance?

AAR Government Services, Inc. has a substantial history of performing maintenance, repair, and overhaul (MRO) services for various military aircraft platforms. Their experience often includes work on fixed-wing aircraft, similar to the P-8A. Publicly available contract data and company reports indicate a portfolio of contracts with different branches of the U.S. military, including the Navy and Air Force, for aviation support. While specific details on P-8A depot maintenance contracts prior to this award may require deeper investigation, their general expertise in complex aviation MRO suggests a capability to handle the requirements of this contract. Assessing their performance on past contracts, including on-time delivery, quality adherence, and cost management, would provide further insight into their reliability for this specific P-8A airframe maintenance task.

How does the awarded amount of $38 million compare to historical spending on P-8A airframe maintenance or similar aircraft depot services?

The $38 million awarded for P-8A airframe depot maintenance over approximately three years represents a significant but potentially standard investment for specialized military aircraft upkeep. To benchmark this value effectively, one would need to compare it against historical contract awards for P-8A depot maintenance, if available, or against contracts for similar large, complex maritime patrol or reconnaissance aircraft. Factors such as the scope of work (e.g., scheduled maintenance, unscheduled repairs, upgrades), the specific maintenance tasks included, and the prevailing market rates for specialized labor and facilities are crucial. Without direct historical comparisons for the P-8A specifically, it's challenging to definitively state if $38 million is high or low. However, given the advanced technology and operational demands of the P-8A, this figure is likely within the expected range for comprehensive depot-level support over the contract period.

What are the key performance indicators (KPIs) and risk mitigation strategies associated with this contract?

Key performance indicators for this contract would likely revolve around the timely completion of maintenance tasks, adherence to stringent quality standards (e.g., defect rates, rework), and meeting operational availability targets for the P-8A aircraft. Risk mitigation strategies are inherent in the contract type and structure. The firm-fixed-price (FFP) nature transfers cost overrun risk to AAR Government Services, Inc. The government's risk mitigation includes robust quality assurance surveillance plans (QASP) to monitor performance, clear contract specifications, and potential incentives or penalties tied to performance metrics. Furthermore, the full and open competition process aims to mitigate the risk of selecting a contractor unable to meet requirements. The government also likely maintains contingency plans for critical maintenance needs should the primary contractor face unforeseen issues.

What is the expected impact of this contract on the operational readiness and availability of the P-8A Poseidon fleet?

This contract is directly aimed at enhancing the operational readiness and availability of the P-8A Poseidon fleet by ensuring that the airframes receive necessary depot-level maintenance and repair. Depot maintenance involves comprehensive inspections, servicing, and repairs that are beyond the scope of routine organizational or intermediate-level maintenance. By addressing these critical upkeep requirements, the contract helps to prevent major component failures, extend the service life of the aircraft, and ensure that the P-8A aircraft meet their mission-ready status. Consistent and high-quality depot maintenance is fundamental to maintaining the reliability and effectiveness of the P-8A for its maritime patrol and reconnaissance missions, thereby supporting naval operational objectives.

How does this contract fit into the broader context of U.S. Navy aviation sustainment and modernization efforts?

This contract is a crucial component of the U.S. Navy's broader aviation sustainment strategy, specifically for the P-8A Poseidon platform. The P-8A is a relatively modern aircraft, but like all complex weapon systems, it requires ongoing, in-depth maintenance to remain effective and safe throughout its operational lifespan. This depot maintenance contract ensures the structural integrity and functional performance of the airframes, complementing efforts related to engine maintenance, avionics upgrades, and other modernization initiatives. Effective sustainment through contracts like this allows the Navy to maximize the return on its investment in the P-8A fleet, delaying the need for costly replacements and ensuring that the fleet can meet current and future operational demands without interruption.

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: $38,075,183

Exercised Options: $38,075,183

Current Obligation: $38,075,183

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