Navy awards $25.8M contract for helicopter services in Guam, highlighting firm fixed-price terms

Contract Overview

Contract Amount: $25,854,081 ($25.9M)

Contractor: AIR Center Helicopters, Inc

Awarding Agency: Department of Defense

Start Date: 2024-07-31

End Date: 2026-07-30

Contract Duration: 729 days

Daily Burn Rate: $35.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PM6/N102B/J.CASTELLAT - VERTREP DET C

Place of Performance

Location: SANTA RITA, GUAM County, GUAM, 96915

Plain-Language Summary

Department of Defense obligated $25.9 million to AIR CENTER HELICOPTERS, INC for work described as: PM6/N102B/J.CASTELLAT - VERTREP DET C Key points: 1. Contract value of $25.8 million over approximately two years. 2. Awarded under full and open competition after exclusion of sources. 3. Firm Fixed Price contract type suggests predictable costs for the government. 4. Services are for nonscheduled chartered freight air transportation. 5. Contractor is AIR CENTER HELICOPTERS, INC. 6. Performance period spans from July 31, 2024, to July 30, 2026. 7. The contract is a definitive contract type. 8. Base contract value is $35.4 million, with potential for modifications.

Value Assessment

Rating: good

The contract value of $25.8 million for approximately two years of helicopter services appears reasonable for specialized air transportation in a remote location like Guam. Without specific benchmarks for nonscheduled freight air transportation in the Pacific region, direct comparison is challenging. However, the firm fixed-price structure provides cost certainty, which is a positive indicator for value. The base value of $35.4 million suggests potential for growth or additional services within the contract's scope.

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.' This indicates that while the competition was intended to be broad, specific sources may have been excluded based on predefined criteria. The number of bidders is not specified, but the 'full and open' designation suggests a competitive process was initiated. The exclusion of sources warrants further investigation to understand its impact on the breadth of competition and potential price discovery.

Taxpayer Impact: The 'full and open' competition, even with source exclusions, generally aims to achieve competitive pricing for taxpayers. Understanding the rationale behind source exclusions is crucial to ensure that the most cost-effective solutions were considered.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Navy, receiving essential air transportation services. Services delivered include nonscheduled chartered freight air transportation, crucial for logistics and operational support in Guam. The geographic impact is focused on Guam, a key strategic location in the Pacific. Workforce implications are likely related to the operational and maintenance crews for the helicopters, as well as support staff in Guam.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The exclusion of sources in a 'full and open' competition could limit the pool of potential offerors, potentially impacting price competitiveness.
Lack of specific details on the number of bidders makes it difficult to fully assess the intensity of competition.
The 'definitive contract' type, while flexible, can sometimes lead to scope creep if not managed carefully.

Positive Signals

The 'firm fixed price' contract type provides cost predictability and reduces the government's risk of cost overruns.
Awarding under 'full and open competition' generally promotes a competitive environment, aiming for better value.
The contract duration of approximately two years allows for sustained service delivery.

Sector Analysis

This contract falls within the air transportation services sector, specifically focusing on nonscheduled freight. The market for such specialized services, particularly in strategic locations like Guam, is often characterized by a limited number of qualified providers. The Department of Defense is a significant consumer of these services for logistical support and operational readiness. Comparable spending benchmarks would typically involve analyzing other contracts for similar charter services in the Indo-Pacific region or for military support operations.

Small Business Impact

There is no indication that this contract includes small business set-asides, as the 'sb' field is false. Furthermore, the 'ss' field is also false, meaning it's not a small business set-aside. This suggests that the primary award was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in the provided data. The impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which penalizes the contractor for cost overruns. Transparency is facilitated by the public nature of contract awards, though specific performance metrics and detailed justifications for source exclusions are not always readily available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Nonscheduled Chartered Air Freight Services
Department of Defense Aviation Support Contracts
Pacific Region Logistics Support
Air Mobility Command Contracts

Risk Flags

Potential for limited competition due to source exclusion.
Reliance on a single contractor for critical air transport services.
Geopolitical and environmental risks in the Guam region.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.9 million to AIR CENTER HELICOPTERS, INC. PM6/N102B/J.CASTELLAT - VERTREP DET C

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 $25.9 million.

What is the period of performance?

Start: 2024-07-31. End: 2026-07-30.

What is the track record of AIR CENTER HELICOPTERS, INC. with government contracts, particularly with the Department of Defense?

AIR CENTER HELICOPTERS, INC. has a history of performing services for the U.S. government, including contracts with the Department of Defense. While specific details on past performance quality, on-time delivery rates, and any past disputes or contract terminations are not provided in this data snippet, their ability to secure this $25.8 million contract suggests they have met the necessary qualifications and demonstrated capability. A deeper dive into their contract history, including performance reviews and any reported issues, would be necessary for a comprehensive assessment of their track record. Examining their past awards and completion records can provide insights into their reliability and adherence to contract terms.

How does the pricing of this contract compare to similar nonscheduled chartered freight air transportation services in the region?

Benchmarking the pricing for this $25.8 million contract against similar services in the Guam region is challenging without access to a broader dataset of comparable contracts. Factors such as aircraft type, capacity, flight hours, specific operational requirements (e.g., night operations, specialized cargo handling), and the limited number of qualified providers in remote locations like Guam can significantly influence pricing. The firm fixed-price nature of this contract provides cost certainty for the Navy. However, to assess value-for-money, a detailed analysis comparing the per-hour or per-mile rates against market data or other government contracts for similar services, adjusted for regional economic factors and operational complexities, would be required.

What are the specific risks associated with this contract, and how are they being mitigated?

Key risks associated with this contract include potential operational disruptions due to weather or maintenance issues, the contractor's financial stability, and the possibility of cost increases if the firm fixed-price contract doesn't adequately account for unforeseen operational demands. Mitigation strategies likely include performance clauses within the contract, stringent reporting requirements, and the Navy's oversight capabilities. The firm fixed-price structure itself mitigates the risk of cost overruns for the government, provided the scope is well-defined. The exclusion of sources in the competition process also presents a risk of not achieving the most competitive pricing, which is mitigated by the 'full and open' intent.

What is the expected effectiveness of these helicopter services in supporting the Department of the Navy's mission in Guam?

The effectiveness of these helicopter services is expected to be high, given their role in providing nonscheduled chartered freight air transportation. Guam is a critical strategic hub for the U.S. military in the Indo-Pacific. Reliable air transport is essential for logistical support, rapid deployment of personnel or equipment, and maintaining operational readiness. The contract's duration of approximately two years suggests a need for sustained and consistent service. The effectiveness will depend on the contractor's ability to meet performance standards, maintain aircraft availability, and operate reliably in the challenging Pacific environment.

How does the historical spending on nonscheduled chartered freight air transportation by the Department of the Navy compare to this award?

Analyzing historical spending patterns for nonscheduled chartered freight air transportation by the Department of the Navy is crucial for context. Without specific historical data, it's difficult to definitively state how this $25.8 million award compares. However, the Navy, operating globally and particularly in the Pacific, frequently utilizes such services for logistical support. Awards of this magnitude are not uncommon for sustained operations in key strategic locations. A trend analysis of past awards for similar services, considering inflation and changes in operational tempo, would provide a clearer picture of whether this contract represents an increase, decrease, or stable level of spending in this category.

What is the significance of the 'after exclusion of sources' clause in the competition type?

The 'after exclusion of sources' clause within 'Full and Open Competition' signifies that while the competition was intended to be broad, certain potential offerors were deliberately excluded from the bidding process. The reasons for exclusion must be justifiable and typically relate to factors like capability, security, past performance, or specific technical requirements. This clause can impact the level of competition achieved. If the exclusions were too broad or not well-justified, it could limit price discovery and potentially lead to higher costs for the government. Conversely, if exclusions were narrowly tailored to ensure only highly qualified vendors participated, it could lead to better technical solutions.

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: N3220524R2261

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 308 E RENFRO ST, BURLESON, TX, 76028

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

Financial Breakdown

Contract Ceiling: $77,287,278

Exercised Options: $27,129,022

Current Obligation: $25,854,081

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline