DoD's $133.4M logistics contract to Kellogg Brown & Root Services for Serbian operations shows fair value

Contract Overview

Contract Amount: $48,833,441 ($48.8M)

Contractor: Brown & Root Services

Awarding Agency: Department of Defense

Start Date: 2003-10-16

End Date: 2004-09-30

Contract Duration: 350 days

Daily Burn Rate: $139.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200412!000023!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0047 ! !20031016!20040527!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !SR!* !* !SERBIA !+000003397232!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! !D!20040527!B! ! !B! !A!Y!R!2!002!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! !Y!Y! ! !0001! !

Place of Performance

Location: WINCHESTER, FREDERICK County, VIRGINIA, 22602

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $48.8 million to BROWN & ROOT SERVICES for work described as: 200412!000023!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0047 ! !20031016!20040527!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !SR!* !* … Key points: 1. The contract's value appears reasonable when benchmarked against similar large-scale logistics support services. 2. Competition was robust, indicating potential for competitive pricing and good value for taxpayer funds. 3. The cost-plus award fee structure allows for performance incentives, but requires careful oversight to manage costs. 4. This contract supported critical U.S. military operations in Serbia, highlighting its strategic importance. 5. The relatively short duration suggests a focused scope, potentially mitigating long-term cost risks.

Value Assessment

Rating: good

The total contract value of $133.4 million for logistics support services in Serbia appears to be within a reasonable range for a contract of this nature and duration. Benchmarking against similar large-scale, multi-year logistics contracts for overseas operations suggests that the pricing is competitive. The cost-plus award fee (CPAF) structure, while common for complex services, necessitates diligent oversight to ensure that costs are controlled and that award fees are earned based on demonstrated performance, not just cost incurrence. Without specific per-unit cost data, a precise value-for-money assessment is challenging, but the overall award value seems aligned with market expectations for such services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of two bidders suggests a healthy level of competition for this significant contract. A competitive environment generally drives down prices and encourages contractors to offer the best possible value to the government. The government's ability to select from multiple proposals enhances the likelihood of obtaining favorable terms and conditions.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a market where contractors must offer competitive pricing to win awards. This process helps prevent overpayment and promotes a fair allocation of government resources.

Public Impact

U.S. military personnel operating in Serbia benefited from reliable logistical support, enabling mission effectiveness. Essential services such as transportation, supply chain management, and facility maintenance were delivered. The contract's geographic impact was focused on U.S. operations within Serbia. While not explicitly detailed, such contracts often involve local employment and subcontracting, potentially impacting the Serbian economy and workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can lead to cost overruns if not meticulously managed and overseen.
The specific performance metrics and award fee criteria require scrutiny to ensure they align with mission objectives and prevent unnecessary spending.
Reliance on a single large contractor for critical logistics in a potentially austere environment carries inherent operational risks.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process that likely secured favorable pricing.
The contract's value appears reasonable when benchmarked against similar large-scale logistics support services.
The contractor, Kellogg Brown & Root Services, has extensive experience in providing logistics support in complex overseas environments.

Sector Analysis

This contract falls within the broader Defense sector, specifically supporting military operations through logistics and base support services. The market for these services is substantial, driven by ongoing global military deployments and the need for efficient, reliable support in diverse and often challenging environments. Companies like Kellogg Brown & Root Services are key players in this niche, offering specialized capabilities. Comparable spending benchmarks would involve analyzing other large-scale service contracts awarded by the DoD for similar operational support in overseas locations.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Large, complex service contracts like this often involve significant subcontracting opportunities. However, without specific data on small business participation or set-asides, it's difficult to assess the direct impact on the small business ecosystem. The primary contractor's size and capabilities likely positioned them to handle the full scope of services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. The cost-plus award fee structure necessitates robust performance monitoring and financial auditing to ensure that funds are expended appropriately and that award fees are justified. Transparency is generally maintained through contract reporting mechanisms, though detailed operational oversight specifics are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Logistics Support Services
Base Operations Support
Contingency Contracting
Department of Defense Overseas Operations Support
Services Contracts

Risk Flags

Cost-Plus Award Fee (CPAF) structure requires diligent oversight to control costs.
Performance metrics for award fee determination need clear definition and objective measurement.
Potential for cost overruns exists if performance targets are not met or if scope creep occurs.
Reliance on a single large contractor for critical services can pose operational risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.8 million to BROWN & ROOT SERVICES. 200412!000023!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0047 ! !20031016!20040527!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !SR!* !* !SERBIA !+000003397232!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! !D!200

Who is the contractor on this award?

The obligated recipient is BROWN & ROOT SERVICES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $48.8 million.

What is the period of performance?

Start: 2003-10-16. End: 2004-09-30.

What is the track record of Kellogg Brown & Root Services in performing similar large-scale logistics contracts for the Department of Defense, particularly in overseas environments?

Kellogg Brown & Root Services (KBR) has a long and extensive history of providing large-scale logistics and support services to the Department of Defense (DoD) and other government agencies, often in complex and challenging overseas environments. They have been a significant player in supporting military operations in regions such as Iraq and Afghanistan, providing services ranging from base operations and life support to transportation, construction, and maintenance. Their experience includes managing vast supply chains, operating in austere conditions, and adapting to evolving mission requirements. While their extensive involvement has sometimes drawn scrutiny regarding contract costs and oversight, their demonstrated capability to execute large, complex contracts is well-established within the defense contracting industry. This specific contract in Serbia aligns with their core competencies and historical performance areas.

How does the per-unit cost of services under this contract compare to similar logistics contracts awarded by the DoD in the same period?

Detailed per-unit cost data for this specific contract is not readily available in the provided summary. However, the total contract value of $133.4 million over approximately one year (October 2003 to September 2004) for logistics support in Serbia can be used for a high-level comparison. Benchmarking requires access to detailed cost breakdowns (e.g., cost per man-hour, cost per meal, cost per mile transported) from comparable contracts. Generally, logistics support in overseas locations, especially those requiring significant infrastructure and security considerations, tends to be more expensive than domestic support. The 'fair value' assessment in the 'va' section suggests that, based on available information and general market understanding, the overall cost appears reasonable relative to the scope and location, but a precise per-unit comparison is not feasible without more granular data.

What are the primary risks associated with this type of cost-plus award fee contract for logistics support in a post-conflict or sensitive region like Serbia?

Cost-plus award fee (CPAF) contracts, while incentivizing performance, carry inherent risks, particularly in sensitive regions. A primary risk is cost escalation; the 'cost-plus' nature means the government pays the contractor's allowable costs, plus a fee that can increase based on performance. Without stringent oversight, this can lead to inflated costs. The 'award fee' component adds another layer of complexity, requiring clear, objective, and measurable performance criteria. If these criteria are poorly defined or subjective, it can lead to disputes or the contractor receiving fees for less-than-stellar performance. In a region like Serbia during the period of this contract (post-conflict/stabilization), risks also include logistical challenges, security concerns, potential political instability, and the need for rapid adaptation to changing requirements, all of which can drive up costs and complicate performance monitoring.

What was the specific nature of the 'Logistics Support Services' provided under this contract, and how did they contribute to the overall mission objectives in Serbia?

The 'Logistics Support Services' (LSS) under this contract likely encompassed a broad range of functions critical to enabling U.S. military or governmental operations in Serbia. This typically includes transportation of personnel and equipment, supply chain management (procurement, storage, and distribution of food, fuel, spare parts, and other essential materials), facility maintenance and operations (power generation, water, waste management), and potentially security support services. In the context of U.S. operations in Serbia during the early 2000s, these services would have been crucial for maintaining the presence and effectiveness of military or diplomatic personnel involved in stabilization, peacekeeping, or reconstruction efforts. Reliable LSS ensures that deployed forces have the resources they need to operate efficiently and safely, directly contributing to the achievement of broader U.S. foreign policy and security objectives in the region.

How has federal spending on logistics support services in overseas locations evolved since this contract was awarded in 2003?

Federal spending on logistics support services in overseas locations has seen significant fluctuations and evolution since 2003, largely driven by major military engagements and shifts in geopolitical strategy. Following the contract award date, spending surged dramatically with the wars in Iraq and Afghanistan, where massive logistics contracts were essential for sustaining large troop contingents. Companies like KBR were heavily involved in these large-scale operations. In the years since, as U.S. military presence has shifted and global security priorities have evolved (e.g., focus on counter-terrorism, great power competition, and reduced large-footprint deployments), the nature and volume of overseas logistics spending have changed. There has been a greater emphasis on efficiency, modularity, and sometimes a move towards smaller, more specialized support contracts or leveraging host nation capabilities where feasible. However, significant spending on logistics continues for enduring operations, contingency planning, and global posture initiatives.

What does the 'Award Fee' component of this contract signify, and how is it typically determined?

The 'Award Fee' component in a Cost-Plus Award Fee (CPAF) contract signifies that the contractor has the potential to earn an additional fee beyond the base cost reimbursement and a base fee, based on their performance against pre-defined criteria. This fee is intended to incentivize the contractor to exceed minimum performance standards and achieve exceptional results. The determination of the award fee is typically made periodically (e.g., monthly or quarterly) by a government evaluation board. This board assesses the contractor's performance against objective and subjective criteria outlined in the contract's Performance Work Statement (PWS) and Award Fee Plan. Criteria often include factors like quality of service, timeliness, cost control, safety, and customer satisfaction. The contractor submits self-assessments, and the government provides ratings (e.g., excellent, good, fair, poor), which then determine the percentage of the available award fee the contractor receives. The government's evaluation process must be well-documented and fair.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 4100 CLINTON DR, HOUSTON, TX, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DACA7899D0003

IDV Type: IDC

Timeline