DoD awards $8.4M for air transportation support, with a 181-day duration

Contract Overview

Contract Amount: $8,436,783 ($8.4M)

Contractor: AAR Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-01-31

End Date: 2025-07-31

Contract Duration: 181 days

Daily Burn Rate: $46.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CY5 MONTHLY SERVICES

Place of Performance

Location: WOOD DALE, DUPAGE County, ILLINOIS, 60191

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $8.4 million to AAR GOVERNMENT SERVICES, INC. for work described as: CY5 MONTHLY SERVICES Key points: 1. Value for money appears fair given the fixed-price nature and duration, but detailed cost breakdowns are needed for a definitive assessment. 2. Full and open competition suggests a healthy market, potentially leading to competitive pricing. 3. Risk indicators are moderate, with performance dependent on contractor execution and government oversight. 4. The contract is for essential air transportation support services, aligning with broader defense logistics. 5. This contract fits within the broader Defense sector's spending on operational support.

Value Assessment

Rating: fair

The contract's fixed-price nature provides some cost certainty. However, without a detailed breakdown of the $8.4 million, it's difficult to benchmark the value against similar services. The price per day is approximately $46,612, which needs to be compared against industry standards for air transportation support to determine if it represents good value. The duration of 181 days is relatively short, suggesting a specific, time-bound need.

Cost Per Unit: Approximately $46,612 per day. Benchmarking against similar contracts for air transportation support is recommended for a precise value assessment.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is generally expected to yield competitive pricing and a wider selection of qualified contractors. The specific number of bidders is not provided, which would offer further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically drives down costs through market forces, ensuring the government receives the best possible price.

Public Impact

The Department of Defense benefits from the provision of essential air transportation support services. Services delivered are critical for maintaining operational readiness and logistical capabilities. The geographic impact is likely concentrated around the operational areas served by the contract, with Illinois noted as the state. Workforce implications may include direct employment by the contractor and indirect support for military personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed cost breakdown makes precise value assessment challenging.
Specific performance metrics and quality assurance procedures are not detailed, posing potential execution risks.
Dependence on a single delivery order for a significant amount could indicate a concentrated risk if issues arise.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm Fixed Price contract type limits the government's exposure to cost overruns.
Clear end date (2025-07-31) provides defined project scope and timeline.

Sector Analysis

The defense sector relies heavily on support services to maintain operational effectiveness. Contracts for air transportation support are crucial for logistics, personnel movement, and equipment deployment. Spending in this area is often driven by mission requirements and geopolitical factors. Benchmarking this contract's value requires comparison with other DoD contracts for similar services, considering factors like aircraft types, routes, and service levels.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not available for this contract. Further analysis would be needed to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight is likely managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures would be tied to the contract's performance work statement and delivery terms. Transparency is facilitated by the contract award notice, but detailed operational oversight mechanisms are not publicly specified.

Related Government Programs

Defense Logistics Agency Support Contracts
Air Mobility Command Services
Department of Defense Transportation Contracts

Risk Flags

Performance Risk: Success hinges on contractor's ability to meet service level agreements.
Cost Management: While fixed-price, detailed cost breakdown is absent for thorough value analysis.
Dependency Risk: Reliance on a single delivery order for a substantial amount.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.4 million to AAR GOVERNMENT SERVICES, INC.. CY5 MONTHLY SERVICES

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 $8.4 million.

What is the period of performance?

Start: 2025-01-31. End: 2025-07-31.

What is the historical spending pattern for similar air transportation support services by the Department of Defense?

Analyzing historical spending for similar air transportation support services by the Department of Defense requires access to extensive contract databases. Generally, DoD spending in this category fluctuates based on operational tempo, global deployments, and specific mission requirements. Contracts can range from short-term, localized support to long-term, global logistics agreements. Factors such as the type of aircraft supported, the scope of services (e.g., maintenance, refueling, ground handling), and the geographic location significantly influence costs. Without specific historical data points for this particular type of service and duration, it's challenging to establish a precise trend. However, consistent spending in this area indicates a persistent need for reliable air transportation support within the DoD's operational framework.

How does the daily cost of this contract compare to industry benchmarks for air transportation support?

The daily cost for this contract is approximately $46,612. Benchmarking this figure against industry standards for air transportation support requires detailed knowledge of the specific services rendered, the types of aircraft involved, and the geographic operational area. General aviation support services can vary widely in price. For instance, fixed-base operator (FBO) services, aircraft maintenance, and specialized logistical support all have different cost structures. If this contract includes comprehensive services like flight operations, ground handling, and potentially specialized cargo or passenger support, the daily rate might be within a reasonable range for high-demand military operations. However, a direct comparison to commercial airline operational costs or smaller-scale private aviation support would likely show significant differences due to the scale and specific requirements of military operations.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

The provided data does not specify the key performance indicators (KPIs) used to evaluate AAR Government Services, Inc.'s performance under this contract. Typically, for air transportation support, KPIs would focus on aspects such as on-time performance for flights, aircraft availability, response times for ground support, adherence to safety protocols, and the quality of maintenance or logistical services provided. The contract's performance work statement (PWS) would detail these requirements and the metrics for measuring success. Government contract officers and quality assurance representatives would monitor these KPIs throughout the contract period. Failure to meet established KPIs could result in contract deficiencies, penalties, or even termination.

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

AAR Government Services, Inc. has a significant track record in providing aviation support services to government and defense clients. As a subsidiary of AAR Corp., the company has experience in areas such as aircraft maintenance, repair, and overhaul (MRO), supply chain management, and fleet support. Their past performance often includes contracts with various branches of the U.S. military, including the Air Force and Navy. Evaluating their specific performance on similar air transportation support contracts would involve reviewing past performance evaluations, any documented contract disputes or awards, and their overall history of meeting delivery schedules and quality standards. Generally, companies with extensive experience in the defense sector are expected to have established processes for managing complex government contracts.

What is the potential impact of this contract on the broader defense logistics and supply chain?

This contract for air transportation support services contributes to the overall efficiency and effectiveness of the Department of Defense's logistics and supply chain operations. By ensuring reliable air transport, it facilitates the movement of personnel, equipment, and supplies, which is critical for maintaining operational readiness and supporting global missions. The specific impact depends on the nature of the services provided – whether it's routine transport, emergency response, or specialized cargo handling. A well-executed contract can enhance the agility of the defense supply chain, reducing transit times and improving resource allocation. Conversely, any performance issues could create bottlenecks and negatively affect mission timelines and costs.

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

Solicitation ID: N0001920R0013

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: $8,436,783

Exercised Options: $8,436,783

Current Obligation: $8,436,783

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $384,843

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001921D0004

IDV Type: IDC

Timeline