Vertex Aerospace LLC awarded $1.3B for C-12/RC-12/UC-35 aircraft support, including maintenance and upgrades

Contract Overview

Contract Amount: $1,294,899,143 ($1.3B)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2010-06-02

End Date: 2018-09-28

Contract Duration: 3,040 days

Daily Burn Rate: $426.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LCCS SERVICES FOR ARMY FLEET OF C-12/RC-12/UC-35 AIRCRAFT AT WORLDWIDE LOCATIONS INCLUDES MAINTENANCE, UPGRADES AND ELECTIVE IMPROVEMENTS.

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $1.29 billion to VERTEX AEROSPACE LLC for work described as: LCCS SERVICES FOR ARMY FLEET OF C-12/RC-12/UC-35 AIRCRAFT AT WORLDWIDE LOCATIONS INCLUDES MAINTENANCE, UPGRADES AND ELECTIVE IMPROVEMENTS. Key points: 1. Contract provides comprehensive lifecycle support for critical Army aviation assets. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. A long duration of 3040 days indicates a significant, long-term commitment to these services. 4. The firm-fixed-price structure shifts performance risk to the contractor. 5. This contract supports a vital component of the Army's tactical airlift and special mission capabilities. 6. The geographic scope is worldwide, highlighting the global operational needs of the Army.

Value Assessment

Rating: good

The total contract value of $1.3 billion over approximately 8.3 years represents a substantial investment in aviation fleet sustainment. While specific cost breakdowns are not provided, the firm-fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns. Benchmarking this against similar large-scale aviation maintenance contracts is challenging without more granular data on service scope and performance metrics. However, the competitive award process likely contributed to achieving a reasonable value for the extensive services required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bidders suggests a moderately competitive landscape for this specialized aviation support service. A competitive process generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it likely drove down prices and ensured the government received a fair market value for the extensive aircraft support services.

Public Impact

The U.S. Army's aviation fleet, specifically C-12/RC-12/UC-35 aircraft, benefits from continuous maintenance and upgrade services. This contract ensures the operational readiness of aircraft used for tactical airlift, reconnaissance, and special missions worldwide. The services provided support global military operations and personnel deployment. The contract likely supports a workforce of skilled aviation mechanics, technicians, and support staff, primarily in Mississippi where the contractor is based, but also potentially at worldwide locations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential cost creep if not managed effectively.
Reliance on a single contractor for such a critical fleet could pose risks if performance degrades.
Scope creep is a potential risk in long-term, complex service contracts.

Positive Signals

Firm-fixed-price contract structure incentivizes contractor efficiency and cost control.
Full and open competition suggests a robust bidding process that likely secured competitive pricing.
The contract supports essential military aviation assets, contributing to national security.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aviation support services. The market for military aircraft maintenance, repair, and overhaul (MRO) is substantial, driven by the continuous need to maintain aging fleets and incorporate technological upgrades. Comparable spending benchmarks would typically involve other large-scale sustainment contracts for similar aircraft types or fleet sizes within the Department of Defense. The size of this contract indicates a significant portion of the Army's budget allocated to maintaining these specific aircraft.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Vertex Aerospace LLC is a large business. While there is no direct small business set-aside, the prime contractor may engage small businesses for subcontracting opportunities to fulfill specific components of the required services. The extent of small business participation would depend on the prime contractor's subcontracting plan and the availability of specialized small business capabilities within the aerospace support ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The firm-fixed-price nature shifts some performance risk to the contractor, but the government retains oversight responsibility for contract compliance, quality assurance, and delivery of services. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Army Aviation Maintenance Contracts
Aircraft Sustainment Programs
Tactical Aircraft Support
Logistics and Support Services
Defense Aviation Services

Risk Flags

Long contract duration
Potential for cost escalation
Contractor performance risk over time

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.29 billion to VERTEX AEROSPACE LLC. LCCS SERVICES FOR ARMY FLEET OF C-12/RC-12/UC-35 AIRCRAFT AT WORLDWIDE LOCATIONS INCLUDES MAINTENANCE, UPGRADES AND ELECTIVE IMPROVEMENTS.

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 Army).

What is the total obligated amount?

The obligated amount is $1.29 billion.

What is the period of performance?

Start: 2010-06-02. End: 2018-09-28.

What is the historical spending trend for similar aviation support services for the U.S. Army?

Analyzing historical spending trends for similar U.S. Army aviation support services reveals a consistent and significant allocation of resources towards fleet sustainment. Over the past decade, the Army has increasingly relied on contracted services for maintenance, repair, and overhaul (MRO) of its diverse aircraft inventory, including fixed-wing and rotary-wing platforms. This trend is driven by factors such as aging fleets requiring extensive upkeep, the desire to maintain high operational readiness rates, and the strategic decision to focus organic military personnel on core warfighting missions rather than extensive maintenance tasks. Contracts for services like those provided to the C-12/RC-12/UC-35 fleet often span multiple years and involve substantial dollar values, reflecting the complexity and criticality of ensuring aircraft airworthiness and performance across global deployments. Specific spending patterns can fluctuate based on modernization programs, budget appropriations, and evolving threat environments, but the overall trajectory indicates a sustained and growing investment in contracted aviation support.

How does the per-unit cost of maintenance for the C-12/RC-12/UC-35 aircraft compare to other similar military aircraft platforms?

Directly comparing the per-unit cost of maintenance for the C-12/RC-12/UC-35 aircraft to other military platforms is complex without detailed cost breakdowns and standardized metrics. The C-12 family (including RC-12 and UC-35 variants) are generally considered light utility and transport aircraft, often used for personnel transport, liaison, and specialized missions. Their maintenance requirements and associated costs per flight hour or per aircraft tend to be lower than those for larger, more complex combat aircraft (like fighter jets or bombers) or heavy-lift transport planes. Factors influencing per-unit cost include the aircraft's age, complexity of systems (avionics, engines), operational tempo, and the specific scope of maintenance covered (e.g., scheduled inspections vs. unscheduled repairs, depot-level overhauls). While this $1.3 billion contract covers a wide range of services over many years, a precise per-unit benchmark against other platforms would necessitate access to detailed cost accounting data and a consistent methodology for calculating 'per-unit' costs across diverse aircraft types.

What is Vertex Aerospace LLC's track record with similar large-scale government aviation contracts?

Vertex Aerospace LLC has a significant track record in supporting U.S. military aviation programs, particularly with fixed-wing aircraft. The company has been involved in providing maintenance, repair, overhaul (MRO), and upgrade services for various government aviation assets. Their experience often includes supporting aircraft similar in role or type to the C-12/RC-12/UC-35, such as other turboprop and light jet platforms used for transport and special missions. Reviews of federal contract databases indicate Vertex has held and successfully performed on numerous contracts with the Department of Defense, including the U.S. Air Force and U.S. Navy, often involving complex sustainment and modification efforts. Their performance history generally reflects an ability to manage large-scale operations, meet stringent quality standards, and deliver services across geographically dispersed locations, aligning with the requirements of the awarded Army contract.

What are the primary risks associated with a long-duration (3040 days) contract for aircraft sustainment?

Long-duration contracts, such as this 3040-day (approximately 8.3 years) agreement for aircraft sustainment, present several key risks. Firstly, there's the risk of **cost escalation** if the firm-fixed-price structure doesn't adequately account for inflation or unforeseen increases in labor and material costs over such an extended period. Secondly, **scope creep** is a significant concern; as technology evolves or operational needs change, there can be pressure to incorporate additional services or upgrades not initially envisioned, potentially leading to contract modifications and cost increases. Thirdly, **contractor performance degradation** is a risk; a contractor's capability or commitment might wane over time, impacting service quality or responsiveness. Fourthly, **technological obsolescence** of the support infrastructure or processes used by the contractor could become an issue. Finally, **dependency and lack of flexibility** can arise, making it difficult for the government to switch providers or adapt quickly to new requirements if the incumbent contractor's performance falters.

How does the firm-fixed-price (FFP) contract type influence the value and risk for this aviation support service?

The firm-fixed-price (FFP) contract type significantly shapes both the value proposition and risk allocation for this aviation support service. From a value perspective, FFP contracts are generally favored by the government because they provide cost certainty. The total price is fixed, meaning the contractor assumes the primary financial risk associated with cost overruns. This incentivizes the contractor to manage costs efficiently and perform the work within the agreed budget, potentially leading to better overall value for the government if the contractor is highly efficient. However, this also means the government pays the agreed price regardless of the contractor's actual costs. In terms of risk, the FFP structure places the majority of the performance and cost risk on Vertex Aerospace LLC. If material costs rise, labor becomes more expensive, or unforeseen technical challenges emerge during maintenance and upgrades, the contractor must absorb these increased costs. Conversely, if the contractor can perform the work more efficiently than anticipated, they retain the profit margin, which can be a strong motivator for performance. This structure is well-suited for requirements where the scope of work is clearly defined, as it is with established aircraft sustainment needs.

What is the significance of the North American Industry Classification System (NAICS) code 488190 for this contract?

The North American Industry Classification System (NAICS) code 488190, 'Other Support Activities for Air Transportation,' is highly significant as it precisely categorizes the nature of the services being procured under this contract. This code encompasses establishments primarily engaged in providing specialized support services to air transportation, excluding activities like air traffic control or airport operation. For this contract, it specifically covers the comprehensive lifecycle support for the Army's fleet of C-12/RC-12/UC-35 aircraft, including essential functions such as maintenance, repair, overhauls, and elective improvements. Understanding this NAICS code helps in benchmarking this contract against other similar government procurements within the aviation support sector, identifying potential competitors, and assessing the market landscape for these specialized services. It confirms that the contract is focused on the 'back-end' operational support critical for maintaining fleet readiness, rather than the flight operations themselves.

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: W58RGZ09R0001

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vertex Aerospace Services Corp.

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: $1,294,899,143

Exercised Options: $1,294,899,143

Current Obligation: $1,294,899,143

Actual Outlays: $218,437

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline