DoD's $257.6M contract for aviation logistics support services awarded to King Aerospace Inc. shows potential value concerns

Contract Overview

Contract Amount: $257,623,117 ($257.6M)

Contractor: King Aerospace, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-06-30

End Date: 2024-11-08

Contract Duration: 7,071 days

Daily Burn Rate: $36.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200509!004946!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0302 !A!N! !N! ! !20050630!20141231!796520807!796520807!877470385!N!KING AEROSPACE INC !4444 WESTGROVE DR STE 250 !ADDISON !TX!75001!01240!113!48!ADDISON !DALLAS !TEXAS !+000007100000!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !A1A!AIRFRAMES AND SPARES !000 !* !488190!E! !3! ! ! ! ! !20200930!B! ! !A! !A!Y!J!2!003!K! !C!N!A! ! !N!B!N!N! ! !A! !B!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ADDISON, DALLAS County, TEXAS, 75001

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $257.6 million to KING AEROSPACE, INC. for work described as: 200509!004946!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0302 !A!N! !N! ! !20050630!20141231!796520807!796520807!877470385!N!KING AEROSPACE INC !4444 WESTGROVE DR STE 250 !ADDISON !TX!75001!01240!113!48!ADDISON !DALLAS !TEXAS !+000007100000!N!N!000000000000!R706!LOGIST… Key points: 1. The contract's total value of $257.6 million over its extended period raises questions about cost-effectiveness. 2. Full and open competition was utilized, suggesting a potentially competitive bidding environment. 3. The contract's duration and potential for modifications warrant close monitoring for scope creep and cost overruns. 4. Performance context is limited, making it difficult to assess the contractor's efficiency and effectiveness. 5. The contract falls within the broader Defense sector, specifically focusing on aviation readiness and support. 6. The absence of small business set-asides indicates a focus on larger prime contractors for this requirement.

Value Assessment

Rating: fair

The total contract value of $257.6 million over nearly 10 years suggests a significant investment in aviation logistics. Benchmarking this against similar contracts for aircraft maintenance and support services is crucial. Without specific performance metrics or detailed cost breakdowns, it's challenging to definitively assess value for money. However, the extended duration and the nature of logistics support often involve substantial costs, necessitating careful oversight to ensure efficiency and prevent overspending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of three bidders suggests a degree of competition, which can contribute to price discovery and potentially more favorable terms for the government. However, the specific details of the bidding process, including the number of proposals received and the evaluation criteria, are not provided, limiting a full assessment of the competitive landscape.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where providers compete on price and performance, potentially leading to lower overall costs for essential services.

Public Impact

The primary beneficiaries are the U.S. Army aviation units relying on timely and effective logistics support for their aircraft. The contract delivers critical services including airframe and spare parts support, ensuring operational readiness. The geographic impact is likely widespread, supporting aviation assets across various military installations. Workforce implications include the potential for direct and indirect employment opportunities within King Aerospace and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration could lead to price escalation or scope creep if not managed tightly.
Lack of detailed performance metrics makes it difficult to assess contractor efficiency and value.
Potential for sole-source modifications if competition is not re-established for future phases.
Reliance on a single prime contractor for critical logistics functions could pose a risk if performance falters.

Positive Signals

Awarded under full and open competition, indicating a structured procurement process.
Contractor has a track record with the Department of Defense, suggesting familiarity with requirements.
The contract aims to ensure the operational readiness of vital aviation assets.

Sector Analysis

This contract operates within the aerospace and defense sector, specifically focusing on aviation support services. The market for these services is substantial, driven by the U.S. military's extensive fleet of aircraft. Companies like King Aerospace play a crucial role in maintaining the readiness and operational capability of these assets. Comparable spending benchmarks would involve analyzing other large-scale contracts for aircraft maintenance, repair, and overhaul (MRO) services across different branches of the military.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. This suggests the contract was not specifically set aside for small businesses. While King Aerospace, Inc. is a significant entity, the implications for subcontracting to small businesses are not detailed in the provided data. Further analysis would be needed to determine if subcontracting opportunities exist and are being utilized to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be embedded in the contract's terms and conditions, including performance standards and payment schedules. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance and Repair Services
Aviation Logistics Support
Defense Readiness Contracts
Airframe and Component Support
Military Aviation Sustainment

Risk Flags

Extended contract duration
Large total contract value
Potential for cost overruns
Limited public performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $257.6 million to KING AEROSPACE, INC.. 200509!004946!2100!W58RGZ!USA AVIATION AND MISSILE COMMAND!W58RGZ05C0302 !A!N! !N! ! !20050630!20141231!796520807!796520807!877470385!N!KING AEROSPACE INC !4444 WESTGROVE DR STE 250 !ADDISON !TX!75001!01240!113!48!ADDISON !DALLAS !TEXAS !+000007100000!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !A1A!AIRFRAMES AND SPARES !000 !* !488190!E! !3! ! ! ! ! !20200930!B! ! !A! !A!Y!J!2!003!K! !C!N!A! ! !N!B!N!N! ! !A! !B!A!000!A!B!N! ! ! ! ! ! !0001! !

Who is the contractor on this award?

The obligated recipient is KING AEROSPACE, 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 $257.6 million.

What is the period of performance?

Start: 2005-06-30. End: 2024-11-08.

What is King Aerospace, Inc.'s track record with the Department of Defense, particularly on similar aviation support contracts?

King Aerospace, Inc. has a history of contracting with the Department of Defense. While the provided data indicates this specific contract (W58RGZ05C0302) is substantial, a deeper dive into their past performance on similar aviation logistics, maintenance, and repair contracts would be beneficial. This includes reviewing past contract awards, performance evaluations (e.g., CPARS reports if available), and any history of disputes or contract terminations. Understanding their experience with complex aviation support requirements and their ability to meet delivery schedules and quality standards is crucial for assessing their capability to fulfill this current large-scale requirement effectively.

How does the per-unit cost or overall value of this contract compare to industry benchmarks for similar aviation logistics services?

Benchmarking the value of this $257.6 million contract against industry standards for aviation logistics support services is challenging without more granular data. Key metrics for comparison would include cost per flight hour, cost per maintenance action, or cost per pound of material managed. The provided data lacks this level of detail. However, the contract's duration (nearly 10 years) and its 'firm fixed price' nature suggest an attempt to control costs over the long term. A comprehensive comparison would require access to data on similar contracts awarded to other providers for comparable aircraft types and service scopes, as well as an understanding of the specific technical requirements and operational tempo driving the demand for these services.

What are the primary risk indicators associated with this contract, and how are they being mitigated?

Primary risk indicators for this contract include its significant total value ($257.6 million) and extended duration (nearly 10 years), which increase the potential for cost overruns, scope creep, and contractor performance issues. The reliance on a single prime contractor for critical logistics functions also presents a risk if performance falters. Mitigation strategies likely involve robust contract management by the Defense Contract Management Agency (DCMA), including regular performance reviews, adherence to defined milestones, and strict change control processes. The 'firm fixed price' contract type aims to cap cost risks for the government, but requires careful management to ensure the contractor remains incentivized to perform efficiently without compromising quality.

How effective has this contract been in ensuring the operational readiness of U.S. Army aviation assets, based on available performance data?

The provided data does not include specific performance metrics or effectiveness reports for this contract. Therefore, a direct assessment of its effectiveness in ensuring the operational readiness of U.S. Army aviation assets cannot be made. The contract's objective is to provide logistics support services, which inherently contribute to readiness. However, to gauge effectiveness, one would need access to data such as aircraft availability rates, mission capable rates, turnaround times for repairs, and the timeliness of spare parts delivery. Without such performance indicators, the assessment remains qualitative, based on the assumption that the contracted services are fulfilling their intended purpose.

What are the historical spending patterns for aviation logistics support services within the Department of Defense, and how does this contract fit within that trend?

Historical spending on aviation logistics support services within the Department of Defense is substantial, reflecting the continuous need to maintain a large and complex fleet of aircraft. This contract, valued at $257.6 million over nearly a decade, represents a significant, long-term investment. It aligns with a broader trend of outsourcing specialized support functions to private industry to leverage expertise and potentially achieve cost efficiencies. Analyzing historical spending would involve examining aggregate data for similar contracts across different military branches and fiscal years to identify trends in contract values, durations, and types of services procured. This specific contract appears to be a substantial component of the DoD's ongoing commitment to aviation sustainment.

What is the potential impact of this contract on the broader aviation support services market, including competition and innovation?

This contract, awarded under full and open competition to King Aerospace, Inc., likely influences the broader aviation support services market by validating the capabilities of mid-to-large sized contractors in securing significant government contracts. The presence of three bidders suggests a competitive environment, which can spur innovation and efficiency among participants. However, the long duration of the contract might limit opportunities for other firms to enter or expand their market share during its term. The government's reliance on established players for such critical functions can sometimes create barriers to entry for newer or smaller companies, potentially impacting the overall dynamism and innovation landscape within the sector.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4444 WESTGROVE DR STE 250, ADDISON, TX, 75001

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $263,065,219

Exercised Options: $263,065,219

Current Obligation: $257,623,117

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline