Vertex Aerospace awarded $127.7M for F-5 aircraft maintenance, highlighting significant defense sustainment spending

Contract Overview

Contract Amount: $127,737,026 ($127.7M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2023-11-30

End Date: 2025-11-29

Contract Duration: 730 days

Daily Burn Rate: $175.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-5 AIRCRAFT MAINTENANCE

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $127.7 million to VERTEX AEROSPACE LLC for work described as: F-5 AIRCRAFT MAINTENANCE Key points: 1. Contract value represents a substantial investment in maintaining aging but critical F-5 fighter jet fleets. 2. The award to Vertex Aerospace suggests a competitive landscape for specialized aviation maintenance services. 3. Long-term contract duration (730 days) indicates a need for sustained, reliable support. 4. Fixed-price contract type aims to control costs and provide predictable spending for the Navy. 5. Geographic concentration in Mississippi points to a key hub for this specific maintenance activity. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: good

The $127.7 million contract for F-5 aircraft maintenance appears to be a significant investment in defense sustainment. Benchmarking against similar contracts for aircraft maintenance requires detailed analysis of scope, duration, and specific aircraft types. However, the firm fixed-price structure suggests an effort to manage costs effectively. The contract value, while substantial, needs to be evaluated in the context of the specialized nature of maintaining older aircraft systems and the overall defense budget for aviation readiness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The specific number of bidders is not provided, but this approach generally fosters price discovery and encourages competitive pricing. The Navy's decision to use full and open competition suggests confidence in the market's ability to provide qualified contractors for this specialized service.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of offers, potentially leading to lower prices and higher quality services.

Public Impact

The U.S. Navy benefits from the continued operational readiness of its F-5 aircraft fleet. Specialized maintenance and repair services are delivered to ensure aircraft airworthiness. The primary geographic impact is concentrated in Mississippi, supporting local economies and jobs. The contract supports a skilled workforce in aviation maintenance and repair.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise beyond the scope of the fixed-price agreement.
Dependence on a single contractor for critical F-5 maintenance could pose a risk if performance falters.
Limited visibility into the specific breakdown of costs within the firm fixed-price structure.

Positive Signals

Firm fixed-price contract provides cost certainty for the Navy.
Full and open competition suggests a robust selection process and potential for competitive pricing.
Long-term contract duration ensures sustained support for a critical defense asset.

Sector Analysis

The aerospace and defense sector is characterized by high-value, long-term contracts for aircraft manufacturing, maintenance, and support. This contract falls within the defense sustainment sub-sector, focusing on keeping existing platforms operational. The market for specialized aircraft maintenance is competitive, with companies like Vertex Aerospace playing a key role in supporting military aviation readiness. Spending in this area is crucial for maintaining national security and projecting air power.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a larger entity, Vertex Aerospace. Further investigation would be needed to determine if small businesses are involved as subcontractors and to what extent they contribute to the overall service delivery. The impact on the small business ecosystem would depend on the subcontracting opportunities created.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, which stipulate deliverables and performance standards. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

F-5 Fighter Jet Modernization Programs
Department of Defense Aviation Maintenance Contracts
Air Force Sustainment Services
Naval Air Systems Command (NAVAIR) Support Contracts

Risk Flags

Aging Aircraft Fleet
Supply Chain Risk for Legacy Parts
Potential for Cost Overruns in Fixed-Price Contracts
Contractor Performance Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $127.7 million to VERTEX AEROSPACE LLC. F-5 AIRCRAFT MAINTENANCE

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $127.7 million.

What is the period of performance?

Start: 2023-11-30. End: 2025-11-29.

What is Vertex Aerospace's track record with similar Department of Defense maintenance contracts?

Vertex Aerospace has a history of performing various aviation maintenance, repair, and overhaul (MRO) services for the Department of Defense. Their portfolio often includes support for different aircraft types, ranging from fixed-wing to rotary-wing platforms. Analyzing their past performance on contracts of similar size, scope, and duration, particularly those involving legacy aircraft like the F-5, would provide insight into their reliability, technical expertise, and ability to meet stringent military requirements. Past performance reviews and contract award data from sources like SAM.gov can offer a more detailed picture of their operational history and client satisfaction.

How does the value of this contract compare to other F-5 maintenance contracts or similar aircraft sustainment efforts?

The $127.7 million award for F-5 maintenance is a significant sum, reflecting the specialized and ongoing nature of supporting aging aircraft. To benchmark its value, one would compare it against historical contracts for F-5 sustainment, if available, or against contracts for maintaining other legacy fighter jets within the DoD inventory. Factors such as the number of aircraft supported, the specific maintenance tasks included (e.g., depot-level, line maintenance), the contract duration, and the geographic location of services all influence cost. A higher value might be justified by a larger fleet size, more comprehensive service requirements, or higher labor and operational costs in the performance region.

What are the primary risks associated with maintaining the F-5 aircraft fleet under this contract?

The primary risks associated with maintaining the F-5 fleet revolve around the age of the aircraft and the availability of parts and expertise. As the F-5 is an older platform, sourcing specialized components can become increasingly difficult and expensive, potentially leading to supply chain disruptions or increased costs. Furthermore, finding and retaining personnel with the specific skills required to maintain these legacy systems can be challenging. The firm fixed-price nature of the contract also introduces risk for the contractor if unforeseen technical issues or cost escalations occur that exceed the contract value.

How effective is the firm fixed-price contract type in ensuring program effectiveness for F-5 maintenance?

The firm fixed-price (FFP) contract type is intended to ensure program effectiveness by providing cost certainty to the government and incentivizing the contractor to manage costs efficiently. For F-5 maintenance, an FFP contract means Vertex Aerospace is responsible for completing the specified work within the agreed-upon price, regardless of their actual costs. This encourages the contractor to optimize their processes, manage resources effectively, and minimize waste. However, effectiveness can be impacted if the initial price was set too low, leading the contractor to cut corners, or if unforeseen technical challenges arise that significantly increase costs beyond what was reasonably anticipated, potentially impacting the quality or timeliness of the maintenance.

What are the historical spending patterns for F-5 aircraft maintenance within the Department of the Navy?

Historical spending patterns for F-5 aircraft maintenance within the Department of the Navy would likely show a fluctuating but consistent requirement for sustainment, especially as the F-5 serves in roles such as aggressor training and adversary support. Spending levels would be influenced by the number of F-5s in the fleet, their operational tempo, and the availability of newer platforms. Over time, as aircraft age, maintenance costs per unit tend to increase due to wear and tear, obsolescence of parts, and the need for more specialized repairs. Analyzing past contract awards for F-5 maintenance would reveal trends in annual spending, contractor choices, and the evolution of support requirements.

What is the strategic importance of the F-5 aircraft to the U.S. Navy's current operations?

The F-5 Tiger II, while an older aircraft, continues to hold strategic importance for the U.S. Navy primarily in its role as an adversary or aggressor aircraft. These aircraft simulate enemy threats during training exercises, allowing Navy pilots to practice combat maneuvers against realistic aerial opponents. Maintaining a fleet of F-5s ensures that training environments are robust and that pilots are adequately prepared for potential real-world engagements. The Navy relies on these platforms to provide cost-effective, yet challenging, training scenarios that are crucial for maintaining combat readiness across its fighter and strike aircraft communities.

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: N0042122R0006

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $127,737,026

Exercised Options: $127,737,026

Current Obligation: $127,737,026

Actual Outlays: $1,625,635

Subaward Activity

Number of Subawards: 48

Total Subaward Amount: $7,231,519

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042124D0003

IDV Type: IDC

Timeline