Navy awards $47.7M for helicopter vertical replenishment services to Air Center Helicopters, Inc

Contract Overview

Contract Amount: $47,706,211 ($47.7M)

Contractor: AIR Center Helicopters, Inc

Awarding Agency: Department of Defense

Start Date: 2021-08-18

End Date: 2026-07-24

Contract Duration: 1,801 days

Daily Burn Rate: $26.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: N102B - J. DYER - PM6 - VERTREP SERVICE

Place of Performance

Location: HAGATNA, GUAM County, GUAM, 96910

Plain-Language Summary

Department of Defense obligated $47.7 million to AIR CENTER HELICOPTERS, INC for work described as: N102B - J. DYER - PM6 - VERTREP SERVICE Key points: 1. Contract value appears reasonable given the duration and service type. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. Contract duration of nearly 5 years indicates a need for sustained service. 4. Service is critical for logistical support in the Pacific theater. 5. Fixed-price contract type shifts performance risk to the contractor. 6. Geographic location in Guam presents unique logistical and operational challenges.

Value Assessment

Rating: good

The contract value of $47.7 million over approximately 5 years for vertical replenishment services is within a reasonable range for specialized aviation support. Benchmarking against similar contracts for aerial logistics in remote Pacific locations suggests this pricing is competitive. The firm fixed-price structure indicates that the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were likely solicited and evaluated. The presence of two bids suggests a moderate level of competition for this specialized service. While not a large number of bidders, the open competition process generally promotes price discovery and ensures fair market value.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it aims to secure the best possible price through a structured bidding process, preventing potential overcharges associated with sole-source or limited competition awards.

Public Impact

Provides essential vertical replenishment services for U.S. Navy operations in the Western Pacific. Supports the logistical readiness and operational effectiveness of naval forces stationed in or transiting through Guam. Ensures timely delivery of supplies, equipment, and personnel to vessels at sea. Contributes to the economic activity in Guam through contractor operations and personnel support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs if unforeseen operational challenges arise in Guam's remote environment.
Dependence on a single contractor for a critical logistical function could pose a risk if performance issues emerge.

Positive Signals

Firm fixed-price contract structure limits the government's exposure to cost overruns.
Full and open competition suggests a competitive award process.
Contract duration provides stability for essential logistical support.

Sector Analysis

This contract falls within the broader aerospace and defense services sector, specifically focusing on aviation support and logistics. The market for specialized aerial logistics, particularly in remote or strategically important locations like Guam, is often characterized by a limited number of highly capable providers. Spending in this area is driven by the operational tempo and geographic requirements of military branches.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the specialized nature of vertical replenishment services and the requirement for significant aviation assets and operational expertise, it is likely that larger, established aerospace and defense contractors would be the primary participants. Further analysis would be needed to determine if small business subcontracting opportunities exist.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The Department of the Navy is responsible for monitoring contractor performance and ensuring compliance with contract terms. Transparency is generally maintained through contract databases like FPDS. The Inspector General for the Department of Defense would have jurisdiction over any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Naval Aviation Logistics Command Management Information System (NALCOMIS)
Fleet Logistics Support
Expeditionary Logistics

Risk Flags

Contract duration is long, requiring sustained performance monitoring.
Geographic isolation of Guam may present logistical and cost challenges.
Limited number of bidders could indicate potential market concentration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.7 million to AIR CENTER HELICOPTERS, INC. N102B - J. DYER - PM6 - VERTREP SERVICE

Who is the contractor on this award?

The obligated recipient is AIR CENTER HELICOPTERS, 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 $47.7 million.

What is the period of performance?

Start: 2021-08-18. End: 2026-07-24.

What is the track record of Air Center Helicopters, Inc. with similar government contracts?

Air Center Helicopters, Inc. has a history of performing aviation services for government entities. A review of federal procurement data indicates they have held contracts for various aviation support, including charter services and aerial support. While specific details on past performance for vertical replenishment are not immediately available in this summary, their existing portfolio suggests experience in operating under government contracts. Further investigation into past performance reviews and any documented issues on prior contracts would be necessary for a comprehensive assessment of their track record.

How does the awarded price compare to market rates for similar services in the region?

The awarded price of approximately $47.7 million over 1801 days (roughly 5 years) for vertical replenishment services in Guam represents an average annual cost of about $9.54 million. Benchmarking this against similar contracts for specialized aviation logistics in the Pacific theater is challenging due to the unique operational environment and limited number of providers. However, considering the costs associated with maintaining aircraft, specialized crews, and operating in a remote location like Guam, the price appears to be within a reasonable range. The firm fixed-price nature also suggests the government has secured a predictable cost.

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

The primary risks include operational challenges in Guam's remote location, potential for unforeseen maintenance issues with aircraft, and the contractor's ability to consistently meet demanding performance schedules. Mitigation strategies are embedded in the contract structure. The firm fixed-price nature shifts financial risk to the contractor. The full and open competition process likely selected a vendor with demonstrated capability. Performance standards and reporting requirements within the contract allow the Navy to monitor and address any emerging issues proactively, potentially including penalties for non-performance.

How effective is this contract in ensuring the Navy's logistical support in the Western Pacific?

This contract is designed to be highly effective in ensuring the Navy's logistical support in the Western Pacific by providing a dedicated and specialized service for vertical replenishment. This capability is crucial for maintaining operational readiness, allowing ships to receive essential supplies, ordnance, and personnel without needing to return to port. The long-term nature of the contract (nearly 5 years) suggests a strategic commitment to this support function, indicating its importance to the Navy's mission in the region. The use of a capable contractor under competitive terms further enhances its expected effectiveness.

What is the historical spending trend for vertical replenishment services in this region?

Historical spending data for vertical replenishment services specifically in the Guam region is not readily available in this summary. However, overall U.S. Department of Defense spending on aviation logistics and support services is substantial and fluctuates based on operational tempo, geopolitical priorities, and fleet readiness requirements. Contracts for such specialized services are often long-term and awarded periodically. Analyzing broader trends in naval aviation support spending and contracts awarded to similar service providers would provide context for this specific award's place within historical patterns.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Freight Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N3220521R4135

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 308 EAST RENFRO STE. 104, BURLESON, TX, 76028

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $53,546,873

Exercised Options: $53,032,705

Current Obligation: $47,706,211

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline