Aviation Contracts: Everything You Need to Know
Aviation contracts involve federal government bids on equipment and companies offering employment opportunities.3 min read
2. Finding Bids for the Federal Government
3. Liability Coverage of Insurance
4. Before you Sign an Insurance Contract
5. Pros and Cons of Pilot Training Contracts
6. The Pros and Cons of Contract Aviation Careers
7. The Pros of Contract Aviation Careers
8. The Cons of Contract Aviation Careers
Aviation contracts involve federal government bids on equipment and companies offering employment opportunities.
Federal Government Bids: Aircraft and Aviation Contracts
The federal government awards several million contracts a year. Most of these contracts have to do with aircraft and aviation. Each day in the United States, there are hundreds of aircraft bids that occur. Most of these bids come from the military and involve landing and launching aircraft and handling ground equipment. Most of the contracts are based in Washington, D.C., followed by Maryland, North Carolina, Pennsylvania, and Virginia.
In Washington D.C. and Virginia, most of these contracts are with the Defense Logistics Agency (DLA). Maryland has many contracts with the Navy, and North Carolina has many contracts with the Department of Homeland Security.
Finding Bids for the Federal Government
Locating federal bids is more difficult than finding local or state contracts because there are not as many federal agencies and they are not as accessible as smaller agencies.
Federal bids are specific to industry sub-sections. During the bidding process, vendors can make proposals for several contracts. This is because some companies have more than one product or department. Federal contracts last more than five years while local or state contracts have a maximum of five years.
In order to make a federal bid, register with FedBizOpps to help find and bid on federal contracts. Look to the General Services Administration (GSA) to get a contract schedule for federal bids.
Liability Coverage of Insurance
For contractual liability coverage, your insurer accepts the contracted party's obligations. Most policies give the insurer the chance to approve or disapprove of the contract. If they aren't approved, you wouldn't have coverage. Insurers could also accept the contract but charge an extra premium. Once agreed upon, send the signed contract to your broker and insurer.
Before you Sign an Insurance Contract
Aviation attorneys can help you understand the contract and advocate for a lower required liability limit. They can also make changes to liability limits because some contracts require large liability limits for parts, even if the part isn't necessary to the aircraft's function or safety.
You should also make vendors have product liability insurance so you're not responsible. If you outsource repairs or use a vendor to give you spare parts, make sure they have proper insurance.
Pros and Cons of Pilot Training Contracts
Certain operators use training contracts and paid training programs for their pilots. In exchange, the pilots promise to stay with the company for a specific timeframe. If the pilots leave, they must reimburse the company for the cost of training, with some courses ranging between $10,000 and $100,000.
The downside of using training contracts is that disgruntled pilots may only stay because they don't want to pay back training costs. The number of pilots in the industry also factors into training costs: a shortage of pilots means there are more career opportunities, and companies have to compete for the best pilots.
The Pros and Cons of Contract Aviation Careers
Not all pilots and technicians are full-time, salaried employees. Some choose to freelance or work per diem. Pursuing a career in contract aviation allows qualified individuals to work in the aviation industry without holding a full-time job. You can find several different types of contract-based aviation careers, each with their own pros and cons.
The Pros of Contract Aviation Careers
- Flexibility: pilots can have contracts that last a few weeks or years. This is ideal for those who want a varied lifestyle.
- Pay: pilots can make quite a bit of money with a contract since they get paid hourly instead of by salary.
- Immediate Work: many times, it's easier for pilots to get a contract job than full-time. It takes longer for full-time pilots to get a job since it's a more involved process.
The Cons of Contract Aviation Careers
- Lack of Benefits: most aviation companies don't give contract workers health insurance or retirement plan access. Considered exempt employees, they might not have sick leave or vacation time.
- Uncertainty: even with a contract, workers run the risk of not knowing what will happen once the contract ends. The company might let the workers go.
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