Vertex Aerospace LLC contract for air transportation support awarded at $140.9M, with 2 bids received

Contract Overview

Contract Amount: $140,940,630 ($140.9M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2011-10-01

End Date: 2012-09-30

Contract Duration: 365 days

Daily Burn Rate: $386.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST NO FEE

Sector: Defense

Official Description: ADDRFT NASM

Place of Performance

Location: MADISON, MADISON County, MISSISSIPPI, 39110

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $140.9 million to VERTEX AEROSPACE LLC for work described as: ADDRFT NASM Key points: 1. The contract value of $140.9 million represents a significant investment in air transportation support services. 2. Competition dynamics indicate a moderate level of interest with two bids submitted. 3. Risk indicators are moderate, given the contract type and duration. 4. Performance context suggests a focus on 'Other Support Activities for Air Transportation'. 5. Sector positioning places this contract within the broader Defense and Aerospace industry.

Value Assessment

Rating: fair

The contract's total value of $140.9 million for a 365-day period needs further benchmarking against similar support contracts. Without specific performance metrics or detailed cost breakdowns, assessing value for money is challenging. The 'COST NO FEE' contract type suggests the government bears the cost risk, which can sometimes lead to less price sensitivity from the contractor. Comparing the per-unit cost of services rendered against industry standards or previous contracts would provide a clearer picture of its economic efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with two bids received. While this indicates some level of market engagement, the low number of bidders could suggest potential barriers to entry or limited market capacity for these specific services. A higher number of bids typically correlates with more competitive pricing and a broader range of innovative solutions.

Taxpayer Impact: The limited number of bidders may have resulted in a less competitive price than could have been achieved with broader participation, potentially impacting taxpayer value.

Public Impact

The primary beneficiaries are likely military aviation units requiring specialized support activities. Services delivered include essential support for air transportation operations. The geographic impact is centered around the Mississippi region, where the contract is managed. Workforce implications may involve skilled technicians and support personnel within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to 'COST NO FEE' contract type.
Limited competition may reduce pressure on Vertex Aerospace to optimize costs.
Dependence on a single contractor for critical support activities could pose a risk.

Positive Signals

Awarded through full and open competition, indicating adherence to procurement regulations.
Contractor 'VERTEX AEROSPACE LLC' has a track record in aerospace support.
The contract duration of 365 days allows for sustained support.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on support activities for air transportation. This sector is characterized by high technological demands, stringent regulatory requirements, and significant government spending. Comparable spending benchmarks would involve analyzing other contracts for aviation maintenance, logistics, and operational support within the Department of Defense and other federal agencies. The market size for such specialized services is substantial, driven by the continuous need for operational readiness of air fleets.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, Vertex Aerospace LLC may engage small businesses as subcontractors, depending on their own supply chain strategy and the nature of the services required. The absence of a small business set-aside means opportunities for small businesses are indirect, relying on the prime contractor's procurement decisions.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractors meet contractual requirements and performance standards. Accountability measures would be embedded within the contract's terms and conditions, including reporting requirements and performance metrics. Transparency is generally facilitated through contract award databases, though detailed operational data may be restricted. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance Services
Aerospace Logistics Support
Air Mobility Command Contracts
Defense Aviation Support Programs

Risk Flags

Potential for cost escalation due to 'COST NO FEE' contract type.
Limited competition may result in suboptimal pricing.
Dependence on a small number of bidders for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $140.9 million to VERTEX AEROSPACE LLC. ADDRFT NASM

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $140.9 million.

What is the period of performance?

Start: 2011-10-01. End: 2012-09-30.

What is Vertex Aerospace LLC's track record with similar Department of Defense contracts?

Vertex Aerospace LLC has a history of performing contracts within the aerospace and defense sector. While specific details on past performance for 'Other Support Activities for Air Transportation' are not provided in this data snippet, their presence as a contractor suggests experience in areas relevant to aviation support. A deeper dive into their contract history, including past performance reviews and any reported issues on previous DoD contracts, would be necessary to fully assess their reliability and capability for this specific award. Examining contract close-out data and any disputes or claims filed could also offer insights into their operational execution and financial management.

How does the awarded amount compare to similar air transportation support contracts?

The awarded amount of $140.9 million for a 365-day contract requires careful benchmarking. Without specific details on the scope of 'Other Support Activities for Air Transportation,' direct comparison is difficult. However, contracts for aviation maintenance, logistics, and operational support can vary widely in cost based on the type of aircraft, the complexity of services, and the geographic location. To assess value, this contract's cost per day ($386,139) should be compared against the average cost per day for similar services awarded by the DoD or other federal agencies over the past few years. Factors like inflation, market demand, and the specific technical requirements of this contract would need to be considered in such a comparison.

What are the primary risks associated with a 'COST NO FEE' contract type in this context?

A 'COST NO FEE' (CNF) contract type, while less common for services, places the financial risk primarily on the government. This means the contractor is reimbursed for all allowable costs incurred, but receives no fee or profit. The primary risk for the government is that the contractor may have less incentive to control costs rigorously, as their profit is not directly tied to cost savings. This can potentially lead to higher overall expenditures than anticipated. For this specific contract, it implies that Vertex Aerospace is expected to perform the defined support activities, and the government will cover all legitimate expenses associated with that performance without an additional profit margin for the contractor. Oversight is crucial to ensure costs are reasonable and allocable.

How effective is the 'full and open competition' with only two bidders in ensuring optimal pricing?

Full and open competition is designed to maximize the number of potential bidders and foster robust price discovery. However, receiving only two bids suggests that the market for these specific services might be limited, or that other potential contractors faced barriers to entry. While two bidders still represent competition, it is less robust than if multiple firms had participated. This could mean that the government did not achieve the most competitive pricing possible. Further analysis would involve understanding why only two bids were submitted – was it due to specialized requirements, limited contractor pool, or other factors? If the requirements were highly specialized, two competitive bids might be considered adequate.

What are the historical spending patterns for 'Other Support Activities for Air Transportation' by the Department of Defense?

Historical spending on 'Other Support Activities for Air Transportation' by the Department of Defense is likely substantial, reflecting the continuous operational needs of military aviation. This category can encompass a wide range of services, from ground support and maintenance to specialized logistical functions. Analyzing past spending trends would involve examining contract awards over several fiscal years, identifying key contractors, and understanding the average contract values and durations. Significant fluctuations in spending could be attributed to changes in operational tempo, fleet modernization programs, or shifts in defense strategy. Understanding these patterns provides context for the current $140.9 million award and helps in forecasting future budgetary needs.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 555 INDUSTRIAL DR S, MADISON, MS, 03

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $140,940,630

Exercised Options: $140,940,630

Current Obligation: $140,940,630

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001908D0014

IDV Type: IDC

Timeline