Army awards $1.22B for vehicle maintenance, with VECTRUS Systems LLC as prime contractor

Contract Overview

Contract Amount: $1,220,879,361 ($1.2B)

Contractor: Vectrus Systems LLC

Awarding Agency: Department of Defense

Start Date: 2004-10-29

End Date: 2010-05-29

Contract Duration: 2,038 days

Daily Burn Rate: $599.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200509!000122!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05D0003 !A!N! !N!0001 ! !20041029!20090929!030468243!030468243!001216845!N!ITT FEDERAL SERVICES INTERNATI!4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!00000! !KU!* !* !KUWAIT !+000020354256!N!N!000000000000!J023!MAINT & REPAIR OF EQ/VEHICLES-TRAILERS-CYCLES !S1 !SERVICES !000 !* !811118!E! !5!B!M! !A! !20200930!B! ! !A! !A!N!U!2!003!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $1.22 billion to VECTRUS SYSTEMS LLC for work described as: 200509!000122!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05D0003 !A!N! !N!0001 ! !20041029!20090929!030468243!030468243!001216845!N!ITT FEDERAL SERVICES INTERNATI!4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!00000! !KU!* !* !KUWAIT !+000020354256!N!N!000000000000!J023!M… Key points: 1. Contract value of $1.22B over 5 years indicates significant long-term support needs. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The contract's duration and scope present potential risks related to performance and cost overruns. 4. This contract aligns with broader DoD efforts to maintain operational readiness of vehicle fleets. 5. The ITT Federal Services International prime contractor has a substantial award history. 6. The contract is for maintenance and repair of equipment, vehicles, trailers, and cycles.

Value Assessment

Rating: good

The total award of $1.22B over approximately 5 years for vehicle maintenance appears reasonable given the scope. Benchmarking against similar large-scale maintenance contracts for military equipment is challenging without more granular data on specific services and locations. However, the Cost Plus Fixed Fee (CPFF) contract type suggests that while the contractor is reimbursed for costs, a fixed fee provides some incentive for cost control. The contract's base value and potential for modifications warrant close monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This approach generally fosters a competitive environment, which can lead to more favorable pricing and better service offerings for the government. The presence of multiple bidders suggests that the market for these services is sufficiently developed to support significant competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining services at competitive prices, preventing potential overcharges that could arise from sole-source or limited competition awards.

Public Impact

The U.S. Army benefits from sustained maintenance and repair of its vehicle and equipment fleet, ensuring operational readiness. Services delivered include comprehensive maintenance and repair for a wide range of vehicles, trailers, and cycles. The contract has a geographic impact primarily in Kuwait, supporting U.S. military operations abroad. Workforce implications include potential job creation for skilled mechanics and support personnel, both domestically and potentially in the operational theater.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost overruns are a risk with Cost Plus Fixed Fee contracts if not managed diligently.
Performance degradation over the contract term could impact vehicle readiness.
Geopolitical instability in the region could affect service delivery and costs.
Dependency on a single prime contractor for such a large scope could create vulnerabilities.

Positive Signals

Full and open competition suggests a strong market offering competitive solutions.
The fixed fee component of the CPFF contract provides some cost predictability.
The long-term nature of the contract allows for specialized training and equipment investment by the contractor.
The Army's established procurement processes likely include oversight mechanisms for such significant awards.

Sector Analysis

This contract falls within the broader defense sector, specifically focusing on logistics and maintenance services. The market for military vehicle maintenance is substantial, driven by the constant need to ensure the operational readiness of global fleets. Comparable spending benchmarks would involve analyzing other large-scale maintenance contracts awarded by the Department of Defense for similar equipment and geographic areas. The size of this award suggests it is a significant contract within its niche.

Small Business Impact

While this contract is a large prime award to VECTRUS Systems LLC, the implications for small businesses depend on subcontracting plans. The prime contractor may be required to set aside a portion of the work for small businesses. Analysis of subcontracting reports would be necessary to determine the extent of small business participation and its impact on the small business ecosystem within the defense contracting sector.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Army. Accountability measures are built into the CPFF structure, requiring detailed cost reporting and performance metrics. Transparency is facilitated through contract award databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Maintenance and Repair Contracts
Army Logistics and Support Services
Global Vehicle Fleet Maintenance
Foreign Military Support Contracts
Cost Plus Fixed Fee Service Contracts

Risk Flags

Cost Overrun Potential
Performance Risk
Geopolitical Instability
Contract Type Risk (CPFF)
Dependency on Single Contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.22 billion to VECTRUS SYSTEMS LLC. 200509!000122!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05D0003 !A!N! !N!0001 ! !20041029!20090929!030468243!030468243!001216845!N!ITT FEDERAL SERVICES INTERNATI!4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!00000! !KU!* !* !KUWAIT !+000020354256!N!N!000000000000!J023!MAINT & REPAIR OF EQ/VEHICLES-TRAILERS-CYCLES !S1 !SERVICES !000 !* !811118!E! !5!B!M! !A! !20200930!B! ! !A! !A!N!U!2!003!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Who is the contractor on this award?

The obligated recipient is VECTRUS SYSTEMS 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 $1.22 billion.

What is the period of performance?

Start: 2004-10-29. End: 2010-05-29.

What is the historical performance record of VECTRUS Systems LLC on similar large-scale maintenance contracts with the Department of Defense?

VECTRUS Systems LLC, formerly part of ITT Corporation, has a significant history of performing large-scale logistics and maintenance contracts for the U.S. military, including extensive operations in overseas environments like Kuwait. Their track record includes managing complex vehicle fleets, base operations, and infrastructure support. While specific performance metrics for past contracts are not detailed here, their continued success in winning substantial awards suggests a generally positive performance history. However, like any large contractor, they may have faced challenges or criticisms on specific contracts related to cost control, personnel management, or service delivery, which would be detailed in past performance reviews and contract close-out reports.

How does the per-unit cost for maintenance and repair under this contract compare to industry benchmarks or similar government contracts?

Determining a precise per-unit cost benchmark for this contract is challenging without granular data on the specific types of vehicles, the scope of repairs, and the labor rates involved. The contract is a Cost Plus Fixed Fee (CPFF) award, meaning the government reimburses VECTRUS for actual costs incurred plus a fixed fee. This structure makes direct per-unit cost comparisons difficult as costs can fluctuate based on unforeseen issues and the complexity of repairs. To benchmark effectively, one would need to compare the average cost per vehicle serviced, or per repair hour, against similar contracts for the same or comparable vehicle types, adjusted for geographic location and operational tempo. Publicly available data often aggregates costs, making such specific comparisons difficult.

What are the primary risk indicators associated with this contract, and how are they being mitigated?

Primary risk indicators for this contract include potential cost overruns inherent in CPFF contracts, performance degradation impacting vehicle readiness, geopolitical instability affecting operations in Kuwait, and contractor dependency. Mitigation strategies likely involve robust oversight by the Army contracting officer, performance metrics tied to award fees or penalties, contingency planning for regional instability, and clear communication channels with the contractor. The fixed fee component provides some incentive for cost control, and the full and open competition suggests a competitive market that can exert pressure on performance. Regular performance reviews and audits are standard mitigation tools.

How effective has VECTRUS Systems LLC been in meeting its subcontracting goals for small businesses on previous contracts?

Assessing VECTRUS Systems LLC's effectiveness in meeting small business subcontracting goals requires reviewing their historical subcontracting reports submitted to the Small Business Administration (SBA) and relevant agencies. While this contract award notice does not specify subcontracting goals or performance, large prime contractors are generally encouraged and often mandated to utilize small businesses. VECTRUS's performance would be evaluated based on whether they met or exceeded their stated subcontracting targets, the types of small businesses utilized (e.g., small disadvantaged, women-owned, veteran-owned), and the value of subcontracts awarded. Consistent failure to meet goals could result in penalties or reduced future opportunities.

What is the historical spending trend for vehicle maintenance and repair services by the Department of the Army over the last five fiscal years?

Historical spending trends for vehicle maintenance and repair by the Department of the Army typically show significant and relatively stable investment, reflecting the continuous need to maintain a large and diverse fleet of vehicles. While exact figures fluctuate based on operational tempo, modernization programs, and budget allocations, the Army consistently allocates billions of dollars annually to sustain its equipment. Spending can increase during periods of high deployment or conflict and may decrease during drawdowns or shifts in strategic focus. Analyzing specific line items for 'Maintenance and Repair of Equipment' or 'Vehicle Maintenance' within the Army's annual budget reports would provide precise historical data, often showing multi-billion dollar annual expenditures.

What is the potential impact of this contract on the overall readiness and operational capability of the U.S. Army's vehicle fleet?

This $1.22 billion contract is crucial for maintaining the operational readiness and capability of the U.S. Army's vehicle fleet, particularly in support of operations in Kuwait. By ensuring timely and effective maintenance and repair, the contract directly contributes to the availability and reliability of essential transportation, combat, and support vehicles. A well-executed maintenance program prevents equipment failures, extends the service life of assets, and ensures that vehicles are mission-capable when needed. Conversely, any deficiencies in performance or delays in service could negatively impact readiness, potentially leading to mission compromises and increased costs associated with emergency repairs or premature equipment replacement.

Industry Classification

NAICS: Other Services (except Public Administration) › Automotive Repair and Maintenance › Other Automotive Mechanical and Electrical Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vectrus, Inc. (UEI: 079387563)

Address: 655 SPACE CENTER DR, COLORADO SPRINGS, CO, 80915

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $36,010,465

Exercised Options: $36,010,465

Current Obligation: $1,220,879,361

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W52P1J05D0003

IDV Type: IDC

Timeline