DoD's $353M Amentum contract for services shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $353,317,004 ($353.3M)

Contractor: Amentum Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-05-19

End Date: 2008-09-30

Contract Duration: 1,230 days

Daily Burn Rate: $287.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Plain-Language Summary

Department of Defense obligated $353.3 million to AMENTUM GOVERNMENT SERVICES, INC. for work described as: Key points: 1. Contract awarded to Amentum Government Services, Inc. for services valued at $353.3 million. 2. The contract was awarded under Full and Open Competition, indicating a broad solicitation process. 3. With 3 bidders, the competition level suggests a moderate but not intensely competitive market for these services. 4. The contract type is Cost Plus Fixed Fee (CPFF), which can incentivize cost overruns if not closely monitored. 5. Performance period spans from May 2005 to September 2008, indicating a mature contract. 6. The base value of $28.7 million suggests a significant initial investment for the services provided.

Value Assessment

Rating: fair

The contract's value of $353.3 million over its period of performance appears reasonable given the scope of services typically provided by Amentum Government Services. Benchmarking against similar large-scale service contracts within the Department of Defense suggests that the overall cost is within expected ranges. However, the Cost Plus Fixed Fee (CPFF) contract type warrants careful oversight to ensure costs remain controlled and that the fixed fee remains appropriate for the level of effort and risk undertaken by the contractor. Without specific performance metrics or detailed cost breakdowns, a definitive value-for-money assessment is challenging, but the scale of the award suggests a significant need and commitment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition,' meaning that all responsible sources were permitted to submit a bid. The presence of 3 bidders indicates a degree of competition, suggesting that the government received multiple proposals. While 3 bidders is more than a sole-source award, it may not represent the highest level of market engagement possible for such a significant contract. The level of competition can influence price discovery, and a higher number of bidders typically leads to more competitive pricing for the government.

Taxpayer Impact: The 'Full and Open Competition' with 3 bidders suggests that taxpayers likely benefited from a reasonably competitive bidding process, leading to a more efficient use of funds compared to a sole-source award. However, exploring avenues for increased competition in future procurements could potentially yield even greater cost savings.

Public Impact

The Department of Defense benefits from essential services provided under this contract, supporting its operational readiness and mission objectives. Personnel within the defense sector, including military and civilian staff, likely receive support services that enable them to focus on core duties. The geographic impact is likely widespread, as Department of Defense operations are global, requiring support services across various locations. The contract supports a workforce of individuals employed by Amentum Government Services, contributing to employment within the defense contracting industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently, potentially increasing expenses beyond initial estimates.
With only 3 bidders, there's a risk that the competition was not as robust as it could have been, potentially impacting price competitiveness.
The contract duration and value suggest a long-term commitment, which may reduce flexibility to adapt to changing requirements or market conditions.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's efficiency and effectiveness comprehensively.

Positive Signals

Awarded under 'Full and Open Competition,' ensuring a broad solicitation and allowing all qualified vendors to participate.
The presence of multiple bidders (3) indicates some level of market interest and potential for competitive pricing.
Amentum Government Services, Inc. is a known entity in government contracting, suggesting a level of established capability and experience.
The contract's significant value implies a critical need for the services being procured by the Department of Defense.

Sector Analysis

This contract falls within the broader professional, scientific, and technical services sector, a significant component of federal spending. The market for defense-related services is substantial, with numerous companies competing for contracts that support military operations, logistics, and administrative functions. Amentum Government Services operates within this competitive landscape, often bidding on large-scale, complex service requirements. Comparable spending benchmarks in this sector often involve multi-million dollar contracts for specialized support, making the $353.3 million award size consistent with major defense service procurements.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses stemming from a specific set-aside requirement. However, as a large prime contractor, Amentum Government Services may engage small businesses as subcontractors to fulfill specific aspects of the contract, depending on their own subcontracting strategies and the nature of the services required. The absence of a small business set-aside means that opportunities for small businesses to compete directly for the prime contract were not prioritized in this procurement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial oversight to monitor expenditures and ensure the fixed fee remains justified. Transparency is generally maintained through contract reporting mechanisms, though detailed public access to cost breakdowns may be limited. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Logistics Agency Support Services
Department of Defense IT Services Contracts
Military Base Operations Support
Government Professional Services Contracts
Department of the Army Service Contracts

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Limited Competition (3 Bidders)
Potential for Inadequate Price Discovery

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $353.3 million to AMENTUM GOVERNMENT SERVICES, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is AMENTUM GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $353.3 million.

What is the period of performance?

Start: 2005-05-19. End: 2008-09-30.

What is Amentum Government Services, Inc.'s track record with the Department of Defense?

Amentum Government Services, Inc. (and its predecessor entities) has a significant history of contracting with the Department of Defense (DoD). They are a major provider of a wide range of services, including base operations, logistics, maintenance, IT support, and engineering. Their extensive portfolio with the DoD includes numerous large-value contracts across various branches and agencies. While specific performance details for individual contracts are often proprietary or require deeper analysis, their continued success in winning competitive bids and securing multi-year awards suggests a generally positive track record and established capabilities that meet the DoD's requirements. However, like any large contractor, they may have faced scrutiny or performance issues on specific contracts, which would be detailed in performance evaluations not publicly available in this summary.

How does the $353.3 million contract value compare to similar service contracts awarded by the Department of the Army?

The $353.3 million contract value is substantial and falls within the range of large-scale service contracts typically awarded by the Department of the Army. The Army procures a vast array of services, including base support, maintenance, IT, and professional services, often in multi-hundred-million dollar increments over several years. For instance, contracts for base operations support, facility maintenance, or large IT system integration can easily reach these figures. While this specific award is significant, it is not an outlier when considering the Army's overall spending on outsourced services. Benchmarking against similar contracts for comparable services (e.g., logistics support, facility management) would reveal if the per-unit cost or overall value is competitive, but the total award amount itself is consistent with major Army procurements.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing their profit. While the fixed fee is intended to incentivize efficiency, it does not directly cap the total cost to the government. If the contractor's costs exceed projections, the government still pays those costs, plus the agreed-upon fixed fee. This can lead to the total contract value significantly exceeding initial estimates if cost controls are weak or unforeseen issues arise. Effective oversight, detailed cost tracking, and clear definitions of allowable costs are crucial to mitigate this risk. The fixed fee itself also needs to be carefully negotiated to reflect the contractor's risk and effort.

How effective is 'Full and Open Competition' with only 3 bidders in ensuring optimal value for taxpayers?

Full and Open Competition is the preferred method for maximizing competition and achieving best value for taxpayers. However, the effectiveness is significantly influenced by the number of bidders. While 3 bidders is better than a sole-source or limited competition scenario, it may not represent the full spectrum of market capability or the most aggressive pricing. If the market could realistically support more than 3 capable bidders, then having only 3 submit proposals might indicate barriers to entry, insufficient outreach, or a lack of market awareness. In such cases, taxpayers might not be realizing the full potential cost savings that a more robust competition could yield. The government's goal is typically to encourage as many qualified bidders as possible to drive down prices and improve service offerings.

What are the historical spending patterns for similar services procured by the Department of the Army?

Historical spending patterns for similar services procured by the Department of the Army show a consistent and substantial investment in outsourced support functions. The Army regularly awards large, multi-year contracts for base operations, logistics, maintenance, IT, and professional services, often in the hundreds of millions of dollars. Spending in these categories has generally trended upwards over the years, driven by increasing operational tempo, modernization efforts, and a strategic decision to outsource non-core functions. Analysis of past contracts reveals a mix of contract types, with CPFF being used for complex or uncertain scopes, and fixed-price contracts for more defined requirements. The total annual spending on services by the Army runs into the tens of billions, making individual large contracts like this one a significant but typical component of their overall budget allocation.

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: AECOM (UEI: 153561212)

Address: 1200 SUMMIT AVE, FORT WORTH, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: W52P1J05D0004

IDV Type: IDC

Timeline