Arnold Center issues RFI on operating contract

By Andrea Agardy, Special to The Times 

Although AEDC is dealing with the ramifications of deep cuts in federal funding, officials there are simultaneously looking to the future.

Late last week, AEDC officials issued a Request for Information (RFI) for a new operation, maintenance, information management and support operating contract.

Aerospace Testing Alliance (ATA) holds the current operating contract at AEDC, which is a Cost Plus Award Fee arrangement. Under the terms of the contract, the federal government covers all of the company’s costs and determines what projects the contractor will complete during the fiscal year. The agreement between ATA and AEDC has a maximum length of 12 years and can be worth up to $2.7 billion.

The amount of the contract varies from one year to the next, depending upon the amount of funding Congress allocates for AEDC’s operations. ATA earns its profit – referred to as the award fee – twice a year following a review of the company’s performance by fee/term determining official. The company receives the award fee only if it scores a 90 or above on the evaluation. The maximum profit ATA can earn is 5 percent of the contract amount for that fiscal year.

The contract with ATA was awarded in 2003, with 2004 serving as the base year. Following the base year, the contract called for seven single-year options followed by four award term periods – or one-year merit-based extensions.

ATA received its most recent extension late last year, authorizing the company to operate the base through fiscal year 2014. Assuming ATA is awarded the final award term it is eligible for, the contract between the company and ATA will expire at the end of fiscal year 2015.

Ninety percent of the employees currently working at AEDC are on ATA’s payroll. The company handles a wide array of duties at the base, for example environmental, safety, industrial health and quality assurance; civil engineering; test utility operations; operational maintenance of aerospace test facilities; and custodial services.

Operations at AEDC have been outsourced since it opened in 1951.

“The Air Force knew it wanted the best engineers, but we knew we couldn’t afford that under the government pay structure,” said Jason Austin, AEDC’s director of public affairs.

In the RFI issued last week, AEDC indicates that another Cost Plus Award Fee contract is possible, but that kind of arrangement is not the only option.

“AEDC is assessing all possible strategy options and contract types for the Test Operations and Support acquisition, including single awards, multiple awards and small business set asides,” the RFI reads, in part. In other words, just because ATA is currently the only company with a contract to conduct AEDC’s operations, that does not mean that system will continue in the future. AEDC officials have indicated they are willing to break it up into multiple contracts which could be awarded to several different companies.

However, it is important to note that by issuing the RFI, AEDC has not committed itself to anything. Rather, AEDC is using it as a tool to determine the best course of action moving forward.

“The ATA contract expires and so we must begin the process to have a new contract in place. The RFI does not commit us to a contract, merely seeking to understand how industry has changed since 2003,” said Austin. The deadline for companies interested in responding to the RFI is Friday, April 12. Once the information received through the RFI is processed, AEDC officials will determine their next move. Whatever is determined in terms of the type of contract or contract the Air Force wants to implement at AEDC, no contract will be awarded without the completion of the bidding process.

Posted on Thursday, March 14, 2013 at 2:40 pm