State Department awards $331.7M contract for overseas air transportation support to DynCorp International

Contract Overview

Contract Amount: $331,679,794 ($331.7M)

Contractor: Dyncorp International LLC

Awarding Agency: Department of State

Start Date: 2013-09-17

End Date: 2014-10-31

Contract Duration: 409 days

Daily Burn Rate: $811.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OVERSEAS CONTRACT

Plain-Language Summary

Department of State obligated $331.7 million to DYNCORP INTERNATIONAL LLC for work described as: OVERSEAS CONTRACT Key points: 1. Contract value represents significant investment in essential logistical support for overseas operations. 2. Full and open competition suggests a potentially competitive bidding process, aiming for best value. 3. Fixed-price contract type shifts performance risk to the contractor, potentially stabilizing costs. 4. Contract duration of over a year indicates a substantial, ongoing need for these services. 5. The nature of the services points to critical infrastructure and operational support for government functions abroad.

Value Assessment

Rating: good

The contract value of $331.7 million for overseas air transportation support is substantial. Benchmarking against similar contracts for logistical support in complex overseas environments is crucial. While specific per-unit costs are not provided, the firm fixed-price nature suggests an expectation of cost control by the contractor. Further analysis would involve comparing DynCorp's pricing structure to historical data for similar services and assessing the overall value delivered against the investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this method generally fosters a competitive environment, which can lead to more favorable pricing and better service offerings for the government. The open nature of the competition suggests that the agency sought to maximize value and innovation by considering a wide range of potential contractors.

Taxpayer Impact: Taxpayers benefit from the potential for cost savings and improved service quality that can arise from a competitive bidding process. Full and open competition increases the likelihood that the government secures the best possible deal for essential services.

Public Impact

Provides critical air transportation support services, likely facilitating personnel and cargo movement for U.S. government operations overseas. Benefits U.S. diplomatic and operational missions abroad by ensuring reliable logistical capabilities. Geographic impact is global, supporting activities in various overseas locations where air transport is essential. Supports a workforce involved in aviation logistics, maintenance, and operational management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen operational challenges arise, despite fixed-price structure.
Dependence on a single contractor for critical overseas logistical functions could pose a risk if performance falters.
Geopolitical instability in operating regions could impact service delivery and costs.

Positive Signals

DynCorp International has extensive experience in providing aviation and logistical support services globally.
Firm fixed-price contract aligns incentives for contractor efficiency and cost management.
Full and open competition suggests a robust selection process, likely identifying a capable provider.

Sector Analysis

This contract falls within the broader aerospace and defense services sector, specifically focusing on logistical support for air transportation. This sector is characterized by complex supply chains, high regulatory oversight, and significant government spending. The market size for such specialized support services is substantial, driven by the global operational needs of various government agencies. DynCorp International is a known player in this space, often competing for and winning large-scale government contracts.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. DynCorp International, as a large prime contractor, may engage small businesses for specific components or services, but the primary award is to a large entity. Further investigation into subcontracting plans would be needed to assess the direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of State. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases, though detailed performance metrics and oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Overseas Contingency Operations (OCO) funding
Department of State Logistics and Support Contracts
Air Transportation Services Contracts
Global Operations Support Contracts

Risk Flags

Potential for performance issues in complex overseas environments.
Risk of cost overruns if unforeseen operational challenges arise.
Dependence on contractor's financial stability and operational capacity.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $331.7 million to DYNCORP INTERNATIONAL LLC. OVERSEAS CONTRACT

Who is the contractor on this award?

The obligated recipient is DYNCORP INTERNATIONAL LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $331.7 million.

What is the period of performance?

Start: 2013-09-17. End: 2014-10-31.

What is DynCorp International's track record with similar large-scale overseas support contracts?

DynCorp International has a long history of performing large, complex government contracts, particularly in aviation, logistics, and security support in challenging overseas environments. They have previously held significant contracts with the Department of State, Department of Defense, and other agencies for services such as aviation maintenance, flight operations, and base support. While their extensive experience is a positive indicator, past performance reviews and any significant controversies or contract disputes associated with their previous awards would be critical for a comprehensive assessment. Analyzing their performance on similar firm-fixed-price contracts would provide further insight into their ability to manage costs and deliver services effectively under such terms.

How does the $331.7 million award compare to historical spending on similar overseas air transportation support?

To benchmark this $331.7 million award, one would need to examine historical spending data for similar overseas air transportation support contracts awarded by the Department of State and other agencies over the past 5-10 years. Key comparison points would include contract duration, scope of services, geographic locations, and the prime contractor. If this award is significantly higher or lower than comparable contracts, it warrants further investigation into the reasons, such as changes in operational tempo, inflation, specific service requirements, or market dynamics. Without specific historical data points for direct comparison, it's difficult to definitively assess if this represents an outlier or a standard investment for the services rendered.

What are the primary risks associated with a contract of this magnitude and scope for overseas operations?

Contracts of this magnitude and scope for overseas operations carry several inherent risks. Firstly, geopolitical instability in the operating regions can disrupt service delivery, increase security costs, and potentially lead to contract modifications or terminations. Secondly, logistical challenges in remote or austere environments can complicate supply chains, maintenance, and personnel deployment, impacting operational efficiency. Thirdly, there's a risk of cost escalation due to unforeseen circumstances, even with a firm fixed-price contract, which could lead to claims or disputes. Finally, dependence on a single large contractor for critical functions can create vulnerability if the contractor experiences performance issues, financial instability, or faces sanctions.

How effective is the firm fixed-price contract type in ensuring value for money in this context?

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 risks can be reasonably anticipated. For overseas air transportation support, an FFP contract incentivizes the contractor, DynCorp International, to control costs and operate efficiently to maximize profit. This shifts the risk of cost overruns to the contractor. However, if unforeseen operational complexities or scope changes arise, the FFP structure can sometimes lead to contractor claims for equitable adjustments, potentially negating some of the initial cost certainty. The effectiveness also depends on the government's ability to clearly define requirements and monitor performance to ensure the contracted services are delivered as specified.

What are the implications of 'full and open competition' for taxpayer dollars on this contract?

Awarding this contract through 'full and open competition' is generally positive for taxpayer dollars. This process requires the agency to solicit bids from all responsible sources, thereby maximizing the pool of potential offerors. A larger number of bidders typically leads to more competitive pricing as companies vie for the contract. It also increases the likelihood that the government will receive proposals offering innovative solutions or superior performance at a competitive price. The transparency inherent in this method helps ensure that the selected contractor offers the best overall value, preventing potential overpayment that might occur under less competitive procurement methods.

What is the typical profit margin for contractors on large overseas support contracts like this?

Determining the exact profit margin for a specific contract like this $331.7 million award to DynCorp International is challenging without access to proprietary financial data. However, industry benchmarks for large, complex government support contracts, especially those involving significant operational risk in overseas environments, often see profit margins ranging from 7% to 15% of the contract value. This range accounts for the inherent risks, the specialized nature of the services, and the contractor's investment in personnel, equipment, and infrastructure. The firm fixed-price nature of this contract suggests the contractor aims to capture a defined profit margin by managing costs effectively.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cerberus Capital Management, L.P. (UEI: 014784388)

Address: 13500 HERITAGE PKWY, FORT WORTH, TX, 76177

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

Financial Breakdown

Contract Ceiling: $331,679,881

Exercised Options: $331,679,881

Current Obligation: $331,679,794

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SAQMMA12C1103

IDV Type: IDC

Timeline