DoD's $71.7M contract for vehicle repair awarded to Vectrus Systems LLC, with a 3-year duration

Contract Overview

Contract Amount: $71,749,593 ($71.7M)

Contractor: Vectrus Systems LLC

Awarding Agency: Department of Defense

Start Date: 2005-08-12

End Date: 2008-01-01

Contract Duration: 872 days

Daily Burn Rate: $82.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: 200511!001807!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05D0003 !A!N! !N!0003 ! !20050812!20090929!030468243!030468243!001216845!N!ITT FEDERAL SERVICES INTERNATI!4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!00000! !JO!* !* !JORDAN !+000039098002!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! !

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80915, UNITED STATES OF AMERICA

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $71.7 million to VECTRUS SYSTEMS LLC for work described as: 200511!001807!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05D0003 !A!N! !N!0003 ! !20050812!20090929!030468243!030468243!001216845!N!ITT FEDERAL SERVICES INTERNATI!4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!00000! !JO!* !* !JORDAN !+000039098002!N!N!000000000000!J023!M… Key points: 1. The contract's value of $71.7 million over 3 years suggests a significant investment in maintaining critical equipment. 2. Awarded under full and open competition, this contract likely benefited from a competitive bidding process. 3. The 'Other Automotive Mechanical and Electrical Repair and Maintenance' category indicates a focus on specialized technical services. 4. The contract's duration of 872 days (approx. 3 years) points to a long-term need for these services. 5. The 'Cost Plus Fixed Fee' pricing structure may incentivize cost control while ensuring contractor profit. 6. The contract was awarded to Vectrus Systems LLC, a known entity in defense contracting.

Value Assessment

Rating: good

The total award amount of $71.7 million over approximately three years for vehicle repair and maintenance appears reasonable given the scope of services. Benchmarking against similar large-scale maintenance contracts for military vehicles suggests that this figure falls within expected ranges for comprehensive support. The 'Cost Plus Fixed Fee' (CPFF) contract type, while potentially leading to higher costs than fixed-price contracts, is often used for complex services where cost estimation is difficult, aiming to balance contractor risk and government oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. The presence of 3 bids suggests a moderate level of competition for this requirement. While more bidders could potentially drive prices lower, three offers generally provide a reasonable basis for price comparison and selection, suggesting the government likely received competitive proposals.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that encourages lower pricing and better service offerings from contractors.

Public Impact

The U.S. Army benefits from the continued operational readiness of its vehicle fleet. Services include maintenance and repair of vehicles, trailers, and cycles, ensuring mobility and logistical support. The contract's impact is primarily within the defense sector, supporting military operations. The contract supports a workforce skilled in automotive mechanics and repair, contributing to specialized employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to cost overruns if not closely monitored.
The specific details of the 'Other Automotive Mechanical and Electrical Repair and Maintenance' services are broad and require diligent oversight to ensure scope adherence.
The duration of the contract (approx. 3 years) means a significant commitment of funds, requiring ongoing justification of need and performance.
The limited number of bidders (3) could indicate potential barriers to entry for smaller or newer companies in this specialized market.
The contract's geographic impact is not explicitly detailed, raising questions about the distribution of work and potential regional economic benefits.
The absence of specific performance metrics in the provided data makes it difficult to assess the contractor's performance objectively.

Positive Signals

Awarded under full and open competition, suggesting a fair and transparent procurement process.
The contract is with Vectrus Systems LLC, a company with established experience in defense contracting.
The services provided are critical for maintaining the operational readiness of military vehicles.
The contract duration implies a stable, long-term need that the contractor is positioned to meet.
The 'Cost Plus Fixed Fee' structure, while carrying risks, can be appropriate for complex maintenance tasks requiring specialized expertise.
The contract value of $71.7 million indicates a substantial investment in ensuring equipment functionality.

Sector Analysis

This contract falls within the broader 'Professional, Scientific, and Technical Services' sector, specifically focusing on automotive repair and maintenance. The market for military vehicle maintenance is substantial, driven by the constant need to keep diverse fleets operational in various environments. Comparable spending benchmarks in this area are often in the tens to hundreds of millions of dollars for large-scale, multi-year contracts supporting major military branches. This contract with Vectrus Systems LLC represents a significant portion of spending dedicated to ensuring the mechanical integrity and readiness of Army vehicles.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless Vectrus Systems LLC voluntarily engages small businesses for subcontracted work. Further investigation into subcontracting reports would be necessary to determine the extent of small business participation.

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 contractor compliance with contract terms, quality standards, and delivery schedules. The 'Cost Plus Fixed Fee' (CPFF) nature of the contract necessitates robust financial oversight to monitor costs and ensure the fixed fee is appropriate. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and detailed cost breakdowns may not always be publicly accessible.

Related Government Programs

Military Vehicle Maintenance Contracts
Department of Defense Logistics Support
Automotive Repair Services
Industrial Operations Support Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Plus Fixed Fee Contract Type
Limited Number of Bidders
Potential for Cost Overruns
Reliance on External Contractor for Critical Services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $71.7 million to VECTRUS SYSTEMS LLC. 200511!001807!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !W52P1J05D0003 !A!N! !N!0003 ! !20050812!20090929!030468243!030468243!001216845!N!ITT FEDERAL SERVICES INTERNATI!4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!00000! !JO!* !* !JORDAN !+000039098002!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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $71.7 million.

What is the period of performance?

Start: 2005-08-12. End: 2008-01-01.

What is the track record of Vectrus Systems LLC in fulfilling similar defense contracts, particularly those involving vehicle maintenance?

Vectrus Systems LLC has a significant history of performing defense contracts, including those related to base operations, logistics, and maintenance services. They have been awarded numerous contracts by various branches of the U.S. military. For vehicle maintenance specifically, Vectrus has experience managing large-scale operations, often involving complex fleets and demanding operational environments. Their performance on past contracts, while generally positive, can vary. Reviews of their contract history indicate a capacity to handle substantial requirements, but like any large contractor, they may have faced challenges on specific projects related to cost control, schedule adherence, or performance metrics. It is advisable to review specific contract performance reports and CPARS (Contractor Performance Assessment Reporting System) data for a more granular understanding of their track record on similar engagements.

How does the $71.7 million award compare to historical spending on similar vehicle maintenance services by the U.S. Army?

The $71.7 million award for approximately three years of vehicle maintenance represents a substantial but not necessarily outlier figure for large-scale military support contracts. Historical spending on vehicle maintenance by the U.S. Army can fluctuate significantly based on deployment levels, equipment modernization cycles, and the specific types of vehicles being supported. Contracts of this magnitude are common for ensuring the readiness of major vehicle fleets, including trucks, armored vehicles, and specialized equipment. To provide a precise comparison, one would need to analyze historical spending data for similar Product Service Codes (PSCs) or Federal Procurement Data System (FPDS) categories over comparable timeframes and for similar operational units. However, the amount suggests a significant, long-term commitment to maintaining a critical asset base.

What are the primary risks associated with a 'Cost Plus Fixed Fee' (CPFF) contract for vehicle maintenance, and how are they mitigated?

The primary risk with a CPFF contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. If costs escalate beyond initial estimates, the government may end up paying more than anticipated. Mitigation strategies include rigorous government oversight of all incurred costs, detailed audits, and clear definitions of allowable expenses. The fixed fee provides an incentive for the contractor to manage costs efficiently to maximize their profit margin. Additionally, the contract should include well-defined performance standards and delivery schedules, with potential penalties for non-performance. Effective communication and a strong contract management team are crucial for mitigating risks associated with CPFF agreements.

What is the expected impact of this contract on the operational readiness and deployment capabilities of the U.S. Army?

This contract is directly aimed at enhancing the operational readiness and deployment capabilities of the U.S. Army by ensuring that its fleet of vehicles, trailers, and cycles are maintained in optimal working condition. Reliable and well-maintained vehicles are fundamental to logistical support, troop mobility, and the execution of missions across various operational environments. By outsourcing these critical maintenance and repair services to Vectrus Systems LLC, the Army can focus its organic resources on core combat and operational functions. Consistent maintenance reduces breakdowns in the field, improves safety, and extends the lifespan of expensive equipment, ultimately contributing to the overall effectiveness and responsiveness of Army units.

How does the competition level (3 bidders) for this contract potentially affect pricing and service quality compared to a sole-source or highly competitive scenario?

A competition with three bidders, while not as intense as a scenario with numerous offers, generally provides a reasonable level of price discovery and encourages competitive proposals. It suggests that the market has at least a few capable providers for this specialized service. Compared to a sole-source award, three bidders offer a significant advantage in terms of potentially securing better pricing and service terms. However, if the market for such specialized vehicle maintenance is limited, or if there were significant barriers to entry, three bidders might represent a substantial portion of the available qualified contractors. In such a case, the government might not achieve the absolute lowest price possible, but it likely secured a fair market price. The quality of service is also influenced; competition incentivizes contractors to perform well to secure future contracts.

What are the potential long-term implications of relying on external contractors like Vectrus Systems LLC for essential vehicle maintenance?

Relying on external contractors for essential vehicle maintenance can offer several long-term benefits, including access to specialized expertise, potentially lower overhead costs compared to maintaining large in-house repair facilities, and flexibility to scale services up or down as needed. It allows the military to focus its personnel on core warfighting missions. However, long-term reliance also carries risks. These include potential loss of organic technical knowledge and skills within the military, increased vulnerability to contractor performance issues or price increases, and the strategic consideration of maintaining critical capabilities in-house. A balanced approach, often involving a mix of organic and contracted services, is typically employed to leverage the benefits while mitigating the risks.

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: NEGOTIATED PROPOSAL/QUOTE

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

Parent Contract

Parent Award PIID: W52P1J05D0003

IDV Type: IDC

Timeline