DoD's $36.7M Kazakhstan Sustainment Support Contract Awarded to CH2M HILL, Inc

Contract Overview

Contract Amount: $36,664,722 ($36.7M)

Contractor: CH2M Hill, Inc

Awarding Agency: Department of Defense

Start Date: 2015-08-20

End Date: 2021-03-31

Contract Duration: 2,050 days

Daily Burn Rate: $17.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: "OTHER FUNCTION" - IGF::OT::IGF CBEP KAZAKHSTAN SUSTAINMENT SUPPORT

Plain-Language Summary

Department of Defense obligated $36.7 million to CH2M HILL, INC for work described as: "OTHER FUNCTION" - IGF::OT::IGF CBEP KAZAKHSTAN SUSTAINMENT SUPPORT Key points: 1. Contract value represents a significant investment in international logistics and support. 2. Awarded via full and open competition, suggesting a robust market for these services. 3. The duration of the contract (over 5 years) indicates a long-term need for sustainment. 4. The 'All Other Professional, Scientific, and Technical Services' NAICS code is broad, requiring further detail on specific deliverables. 5. The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely managed. 6. The absence of small business set-aside suggests the prime contractor is a large entity, with potential subcontracting opportunities. 7. Geographic focus on Kazakhstan highlights specific geopolitical and operational requirements.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the services provided. However, the total award of over $36 million for a period of more than five years suggests a substantial commitment. The CPFF contract type, while allowing flexibility, carries inherent risks of cost escalation. A detailed review of the contractor's performance and cost management on similar international support contracts would be necessary for a more definitive value assessment. Comparing the per-unit cost of services, if identifiable, against industry standards for logistical support in similar regions would also be crucial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. This method generally promotes competitive pricing and allows the government to select the best value offer. The number of bidders is not specified, but the open competition suggests a healthy market for these specialized sustainment services. The government likely received a range of proposals, enabling price discovery and selection of a technically sound and cost-effective solution.

Taxpayer Impact: Taxpayers benefit from the competitive process through potentially lower prices and access to a wider pool of qualified contractors, ensuring the government secures the best possible services for its investment.

Public Impact

The primary beneficiaries are likely the U.S. Department of Defense personnel and assets operating in or requiring support related to Kazakhstan. Services delivered are broadly categorized under 'All Other Professional, Scientific, and Technical Services,' implying a range of support functions. The geographic impact is centered on Kazakhstan, supporting U.S. interests and operations within that region. Workforce implications could include employment opportunities for technical experts, logisticians, and support staff, both domestically and potentially in the host nation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractor to increase costs to maximize fee.
Broad 'Other Services' category lacks specificity, potentially obscuring the true nature and cost drivers of the work.
Long contract duration increases the risk of scope creep or evolving requirements not being adequately addressed.
Geographic location in Kazakhstan may present unique logistical and security challenges impacting cost and performance.

Positive Signals

Awarded through full and open competition, suggesting a competitive environment that should drive value.
Contractor CH2M HILL, Inc. has a history of performing large-scale government contracts, indicating experience.
The contract addresses a specific sustainment need, implying a clear requirement and strategic importance.
The fixed fee component of the CPFF contract provides some level of cost predictability for the government.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically related to defense support and logistics. The market for such services is substantial, driven by government needs for specialized expertise in complex operational environments. Comparable spending benchmarks would typically involve analyzing other DoD contracts for sustainment, logistics, and technical support in similar international theaters. The broad NAICS code suggests this could encompass a variety of activities, from engineering support to operational maintenance.

Small Business Impact

The contract was not awarded as a small business set-aside, and the prime contractor, CH2M HILL, Inc., is a large business. This suggests that the primary contract is not directly benefiting small businesses through set-aside provisions. However, there may be opportunities for small businesses to participate as subcontractors to CH2M HILL, Inc., depending on the specific services required and the company's subcontracting plan. The overall impact on the small business ecosystem would depend on the extent of subcontracting and the types of services solicited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Threat Reduction Agency (DTRA). As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to ensure costs remain reasonable and deliverables are met. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency would be enhanced through regular reporting requirements from the contractor and periodic reviews by the contracting officer.

Related Government Programs

DoD Logistics and Sustainment Contracts
International Security Cooperation Programs
Defense Threat Reduction Agency (DTRA) Support Contracts
Professional, Scientific, and Technical Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires close monitoring to prevent cost overruns.
Broad service category may lack transparency on specific deliverables and cost drivers.
Geographic location presents potential logistical and operational complexities.
Long contract duration increases the risk of scope creep and requirement changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.7 million to CH2M HILL, INC. "OTHER FUNCTION" - IGF::OT::IGF CBEP KAZAKHSTAN SUSTAINMENT SUPPORT

Who is the contractor on this award?

The obligated recipient is CH2M HILL, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Threat Reduction Agency).

What is the total obligated amount?

The obligated amount is $36.7 million.

What is the period of performance?

Start: 2015-08-20. End: 2021-03-31.

What specific services are included under the broad 'All Other Professional, Scientific, and Technical Services' category for this contract?

The provided data offers limited detail on the specific services rendered under the 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) category for the Kazakhstan Sustainment Support contract. Typically, this broad classification can encompass a wide array of activities, including but not limited to, technical consulting, engineering services, scientific research and development support, environmental consulting, and specialized operational support. Given the context of 'Sustainment Support' in Kazakhstan, it is probable that the services include logistical planning and execution, maintenance support for equipment or facilities, technical assistance to local partners, and potentially advisory services related to defense infrastructure or operations. A deeper dive into contract line item numbers (CLINs) or the contract's statement of work (SOW) would be necessary to ascertain the precise nature and scope of the services provided.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact cost control and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract type allows the contractor to recover all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves a high degree of uncertainty. While it provides flexibility for the government to adapt to evolving needs, it carries inherent risks for cost control. The contractor is incentivized to control costs to some extent because their fee is fixed, but they do not directly benefit from cost savings beyond the fixed fee. Conversely, if costs escalate significantly, the government bears the burden. Effective oversight, detailed cost tracking, and robust negotiation of the fixed fee are critical to mitigate potential cost overruns and ensure value for the taxpayer under a CPFF arrangement.

What is the track record of CH2M HILL, Inc. in performing similar international sustainment support contracts for the Department of Defense?

CH2M HILL, Inc. (now part of Jacobs Engineering Group) has a substantial history of performing large-scale engineering, procurement, and construction (EPC) services, as well as program management and sustainment support for various government agencies, including the Department of Defense. They have been involved in numerous complex projects globally, often in challenging environments. While specific details on their performance for 'Kazakhstan Sustainment Support' require direct contract review, their broader portfolio suggests experience in managing logistics, infrastructure, and technical services for defense-related operations abroad. Assessing their past performance on similar contracts would involve reviewing past performance evaluations, any documented disputes or contract modifications, and their overall success in meeting cost, schedule, and performance objectives in comparable international settings.

Can we compare the value of this contract to other similar sustainment support contracts awarded by the DoD in the region or for similar geopolitical objectives?

Direct comparison of this $36.7 million contract value for Kazakhstan Sustainment Support is difficult without granular data on comparable contracts. Factors such as the specific services rendered, the duration, the operational tempo, the security environment, and the geopolitical significance of the region heavily influence contract values. Contracts for sustainment support in Central Asia or similar theaters might offer benchmarks, but variations in scope and duration would need careful consideration. Generally, large-scale, multi-year sustainment contracts for defense operations in foreign countries represent significant investments. To perform a robust comparison, one would need to identify contracts with similar NAICS codes, contract types (CPFF), and geographic focus, while also accounting for inflation and changes in market rates over time.

What are the primary risks associated with the geographic location (Kazakhstan) for this sustainment support contract?

Operating in Kazakhstan presents several potential risks for a sustainment support contract. Geopolitical stability, while generally considered moderate, can be subject to regional influences and shifts. Logistical challenges are significant, given the landlocked nature of the country and the distances involved in transporting personnel, equipment, and supplies. Infrastructure limitations outside major urban centers could also impede operations. Security risks, though potentially lower than in active conflict zones, still require careful management, including personnel safety protocols and potentially specialized security arrangements. Furthermore, navigating local regulations, customs, and business practices can add complexity and potential delays. The Cost Plus Fixed Fee structure might be employed partly to mitigate some of these inherent operational risks for the contractor.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HDTRA107R0004

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2411 DULLES CORNER PARK STE 500, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $38,427,697

Exercised Options: $38,372,839

Current Obligation: $36,664,722

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDTRA108D0008

IDV Type: IDC

Timeline