DoD's $93.7M Aircraft Production Support Services contract awarded to Vertex Aerospace LLC shows fair value with 8 bidders

Contract Overview

Contract Amount: $93,693,979 ($93.7M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2011-04-29

End Date: 2014-10-28

Contract Duration: 1,278 days

Daily Burn Rate: $73.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: LABOR HOURS

Sector: Defense

Official Description: AIRCRAFT PRODUCTION SUPPORT SERVICES (INDIRECT LABOR)

Place of Performance

Location: CORPUS CHRISTI, NUECES County, TEXAS, 78419

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $93.7 million to VERTEX AEROSPACE LLC for work described as: AIRCRAFT PRODUCTION SUPPORT SERVICES (INDIRECT LABOR) Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Vertex Aerospace LLC, the awardee, has a track record in aerospace support services. 3. The contract duration of 1278 days suggests a significant, long-term need for these services. 4. The contract focuses on indirect labor for aircraft production, a critical but often overlooked area. 5. The number of bidders (8) suggests healthy market interest and potential for competitive pricing. 6. The contract's value is substantial, reflecting the complexity and scale of aircraft production support.

Value Assessment

Rating: good

The contract's value of approximately $93.7 million over roughly 3.5 years appears reasonable given the scope of indirect labor support for aircraft production. Benchmarking against similar large-scale aerospace support contracts suggests that pricing for labor hours in this sector typically falls within a certain range. The fact that it was awarded under full and open competition with multiple bidders further supports the notion that the pricing achieved was competitive and reflects market rates. Without specific line-item details, a precise value-for-money assessment is challenging, but the overall award value seems aligned with industry standards for such extensive support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The solicitation attracted 8 bidders, indicating a healthy level of competition for this requirement. A higher number of bidders generally leads to better price discovery and can drive down costs for the government. The competitive nature of this award suggests that the government likely received competitive proposals and selected the best value offering.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it fosters a competitive environment, which typically results in more favorable pricing and better overall value for the government's investment.

Public Impact

The Department of the Army benefits from essential indirect labor support for its aircraft production programs. This contract ensures the continuity and efficiency of aircraft manufacturing and maintenance operations. The services provided are critical for maintaining the readiness and operational capabilities of military aircraft. The contract supports skilled labor jobs within the aerospace sector, primarily in Texas. The successful execution of this contract contributes to national defense readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if indirect labor hours are not managed efficiently.
Dependence on a single contractor for critical support services could pose a risk if performance falters.
The long duration of the contract may lead to less flexibility in adapting to changing technological needs or production strategies.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing structure.
Vertex Aerospace LLC's experience in the aerospace sector provides a degree of confidence in their ability to perform.
The contract's focus on indirect labor highlights a commitment to supporting the foundational elements of aircraft production.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on support services for aircraft production. The administrative management and general management consulting services (NAICS 541611) category encompasses a wide range of professional services. The market for aircraft production support is substantial, driven by government defense spending and commercial aviation needs. Comparable spending benchmarks would typically be assessed against other large-scale government contracts for similar indirect labor and support services within the defense industrial base.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a specific small business set-aside. While the prime contractor is Vertex Aerospace LLC, there is no explicit information provided regarding subcontracting plans or targets for small businesses. The impact on the small business ecosystem would depend on whether Vertex Aerospace actively seeks to engage small businesses for subcontracting opportunities related to this large contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of the Army) through contract officers and administrative contracting officers. Performance monitoring, quality assurance, and compliance checks are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Manufacturing Support
Aerospace Logistics Services
Defense Production Support
Indirect Labor Services
Government Contracting
Department of Defense Procurement

Risk Flags

Potential for cost creep in indirect labor categories.
Contractor performance risk impacting production schedules.
Long-term contract dependency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $93.7 million to VERTEX AEROSPACE LLC. AIRCRAFT PRODUCTION SUPPORT SERVICES (INDIRECT LABOR)

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 $93.7 million.

What is the period of performance?

Start: 2011-04-29. End: 2014-10-28.

What is Vertex Aerospace LLC's track record with the Department of Defense, particularly on similar large-scale support contracts?

Vertex Aerospace LLC has a history of performing contracts for the Department of Defense, often related to aviation support, maintenance, and logistics. While specific details on past performance for contracts of this exact magnitude and scope (indirect labor for aircraft production) would require deeper analysis of contract databases, their presence as an awardee on this significant contract suggests they have met the necessary qualifications and demonstrated capability. Their experience in the aerospace sector generally positions them as a capable provider for such services. Further investigation into their past performance ratings, any past disputes, or contract modifications on previous DoD contracts would provide a more comprehensive understanding of their track record.

How does the awarded value of $93.7 million compare to similar indirect labor support contracts for aircraft production within the DoD?

Benchmarking the $93.7 million award requires comparing it to contracts with similar scopes of work, duration, and complexity. Indirect labor support for aircraft production is a critical but often variable cost component. Contracts of this size are typically awarded for extensive, long-term support requirements. Without access to a detailed breakdown of labor hours, rates, and specific services rendered, a precise comparison is difficult. However, given the duration (over 3 years) and the nature of supporting aircraft production, this value appears to be within a reasonable range for a large-scale federal contract. The fact that it was competitively bid with 8 bidders suggests the pricing was scrutinized against market alternatives.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Primary risks include potential cost overruns due to inefficient management of indirect labor hours, performance deficiencies that could impact aircraft production schedules, and contractor viability over the contract's duration. Mitigation strategies likely involve robust contract oversight by the Army, including performance metrics, regular progress reviews, and audits. The contract may also include clauses for incentives or penalties related to performance and cost control. The competitive award process itself serves as a risk mitigation tool by selecting a capable contractor. Furthermore, the government typically maintains options to address performance issues, up to and including termination for default.

How effective is the 'full and open competition' approach in ensuring value for money for this specific type of service?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money, especially for services like indirect labor support where market competition exists. By allowing all responsible sources to bid, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. The presence of 8 bidders in this case strongly suggests that the market was receptive and that competition likely drove down prices. This approach allows the government to select the best value proposal, which may not always be the lowest price but offers the optimal balance of cost, performance, and risk.

What is the historical spending pattern for aircraft production support services by the Department of the Army, and how does this contract fit?

Historical spending on aircraft production support services by the Department of the Army is substantial, reflecting the ongoing need to maintain and modernize its vast aircraft fleet. This spending encompasses a wide range of activities, from direct manufacturing support to indirect services like labor management, logistics, and administrative functions. This specific contract for indirect labor support fits into the broader category of sustainment and readiness programs. Analyzing historical spending patterns would reveal trends in outsourcing these support functions, the average contract values, and the key contractors involved. This $93.7 million award represents a significant, but likely typical, investment in ensuring the operational readiness and production capabilities of Army aviation assets.

Are there any specific performance indicators or metrics that are crucial for assessing the success of this contract?

Crucial performance indicators for this contract would likely revolve around the efficiency and effectiveness of the indirect labor provided. Key metrics could include on-time delivery of support services, adherence to labor hour budgets, quality of work performed (e.g., minimal rework or errors), and impact on aircraft production timelines. For example, metrics related to the availability of skilled personnel when needed, the cost-effectiveness of labor deployment, and the successful integration of support staff into production workflows would be vital. The government would monitor these indicators to ensure Vertex Aerospace is meeting its contractual obligations and contributing positively to the overall aircraft production goals.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W912NW11T0007

Offers Received: 8

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vertex Aerospace Services Corp.

Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $93,732,896

Exercised Options: $93,732,896

Current Obligation: $93,693,979

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS10F0328N

IDV Type: FSS

Timeline