DoD awards $53M for P-8A aircraft depot maintenance, with AAR Government Services Inc. securing the contract

Contract Overview

Contract Amount: $52,998,612 ($53.0M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-10-17

End Date: 2024-05-31

Contract Duration: 592 days

Daily Burn Rate: $89.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: P-8A 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 $53.0 million to AAR GOVERNMENT SERVICES, INC. for work described as: P-8A DEPOT MAINTENANCE AND REPAIR Key points: 1. Contract awarded for depot maintenance and repair of P-8A aircraft. 2. AAR Government Services, Inc. is the primary contractor. 3. The contract has a duration of 592 days. 4. This award falls under the Aircraft Engine and Engine Parts Manufacturing sector. 5. The contract type is Firm Fixed Price, indicating predictable costs. 6. The award was made through Full and Open Competition. 7. The contract was awarded as a Delivery Order.

Value Assessment

Rating: good

The contract value of $53 million for depot maintenance and repair of P-8A aircraft appears reasonable given the specialized nature of military aviation maintenance. Benchmarking against similar contracts for large aircraft depot services would provide a more precise assessment, but the firm-fixed-price structure suggests cost control. The specific services covered under this delivery order will be key to a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple bidders were likely considered. The presence of a single delivery order suggests this is part of a larger, potentially indefinite-delivery/indefinite-quantity (IDIQ) contract or a specific task order under an existing agreement. The level of competition is positive for price discovery.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by encouraging multiple companies to bid and offer their best prices.

Public Impact

The primary beneficiaries are the U.S. Navy and its P-8A Poseidon maritime patrol aircraft fleet. Services delivered include essential depot-level maintenance and repair, ensuring aircraft readiness. The geographic impact is likely concentrated around the contractor's facilities and Navy operational bases. Workforce implications include skilled technicians and support staff at the contractor's location.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor performance issues impacting aircraft availability.
Risk of cost overruns if unforeseen maintenance issues arise beyond the scope of the fixed-price agreement.
Dependence on a single contractor for critical maintenance services.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Awarded through full and open competition, suggesting competitive pricing.
Contractor has experience in government services and aviation maintenance.

Sector Analysis

The P-8A Poseidon is a critical component of the U.S. Navy's maritime patrol and reconnaissance capabilities. The market for specialized depot maintenance for such advanced aircraft is limited, often dominated by original equipment manufacturers or large aerospace service providers. This contract fits within the broader defense aerospace services sector, which is a significant segment of the overall aerospace and defense industry. Comparable spending benchmarks would involve looking at other large military aircraft maintenance contracts.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific award, as the 'sb' (small business) flag is false. There is no explicit mention of small business set-asides or subcontracting requirements in the provided data. Further analysis of the contract's broader framework (if it's part of an IDIQ) would be needed to assess potential subcontracting opportunities for small businesses.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm-fixed-price contract type, which places the financial risk on the contractor for meeting the defined scope. Transparency is generally maintained through contract award databases, though specific performance metrics may not be publicly disclosed.

Related Government Programs

P-8A Poseidon Aircraft
Naval Aviation Maintenance
Defense Depot Maintenance
Aerospace Services Contracts
Aircraft Engine Repair

Risk Flags

Potential for performance issues impacting aircraft availability.
Risk of cost overruns if unforeseen maintenance issues arise beyond the scope of the fixed-price agreement.
Dependence on a single contractor for critical maintenance services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.0 million to AAR GOVERNMENT SERVICES, INC.. P-8A 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 $53.0 million.

What is the period of performance?

Start: 2022-10-17. End: 2024-05-31.

What is the track record of AAR Government Services, Inc. in performing similar depot maintenance contracts for the U.S. military?

AAR Government Services, Inc. has a significant history of providing aviation maintenance, repair, and overhaul (MRO) services to various branches of the U.S. military, including the Navy and Air Force. They have experience with a range of aircraft platforms, often involving complex systems and components. Their past performance on similar contracts, particularly those involving large, mission-critical aircraft like the P-8A, would be a key factor in the DoD's decision-making process. Reviewing past performance evaluations and any documented issues or successes from previous contracts would provide a clearer picture of their capabilities and reliability in executing this type of specialized depot maintenance.

How does the awarded amount of $53 million compare to historical spending on P-8A depot maintenance?

To accurately compare the $53 million award to historical spending on P-8A depot maintenance, one would need access to historical contract data for this specific aircraft type. This would involve identifying previous contracts for P-8A depot maintenance, their values, durations, and the contractors involved. Factors such as inflation, changes in maintenance requirements, and the number of aircraft undergoing maintenance in a given period would need to be considered for a fair comparison. Without this historical data, it's difficult to definitively state whether this award represents an increase, decrease, or stable level of spending compared to past efforts. However, the firm-fixed-price nature suggests an attempt to control costs within the defined scope.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

The primary risks associated with this contract include potential performance issues that could impact P-8A aircraft availability, unforeseen technical challenges during maintenance that could strain the fixed-price budget, and supply chain disruptions affecting parts availability. Mitigation strategies likely include robust quality assurance and inspection processes by the Defense Contract Management Agency (DCMA), clear performance metrics and service level agreements within the contract, and contingency planning by AAR Government Services, Inc. for potential technical or logistical hurdles. The firm-fixed-price structure itself acts as a risk mitigation tool for the government by capping costs, but it shifts the financial risk of unforeseen issues to the contractor.

How effective is the firm-fixed-price (FFP) contract type in ensuring value for money for this P-8A depot maintenance?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For depot maintenance and repair, where the specific issues might not be fully known until disassembly, FFP can incentivize the contractor to be efficient and manage costs tightly. However, it also places the risk of unforeseen problems or cost overruns on the contractor. If the contractor underbids or encounters unexpected complexities, they may cut corners on quality, or seek change orders, potentially negating some of the value. Robust government oversight is crucial with FFP to ensure quality is maintained and that the contractor is not unduly burdened by unforeseen issues that warrant contract modification.

What is the strategic importance of the P-8A aircraft, and how does this maintenance contract support its operational readiness?

The P-8A Poseidon is a vital multi-mission maritime aircraft, crucial for intelligence, surveillance, reconnaissance (ISR), anti-submarine warfare (ASW), and anti-surface warfare (ASUW) missions. Its operational readiness is paramount for maintaining U.S. naval dominance and projecting power globally. This depot maintenance and repair contract directly supports that readiness by ensuring the P-8A fleet undergoes the necessary in-depth servicing, component overhauls, and structural repairs that cannot be performed at the operational unit level. By keeping these aircraft in peak condition, the contract enables the Navy to effectively execute its missions, respond to threats, and maintain a forward presence.

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

Parent Company: AAR Government Services Inc.

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: $52,998,612

Exercised Options: $52,998,612

Current Obligation: $52,998,612

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $2,223,001

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