Department of Defense awards $133.5M contract for logistics support, with KBR Services as prime contractor

Contract Overview

Contract Amount: $61,750,338 ($61.8M)

Contractor: Brown & Root Services

Awarding Agency: Department of Defense

Start Date: 2004-11-04

End Date: 2010-08-12

Contract Duration: 2,107 days

Daily Burn Rate: $29.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200512!500050!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0052 ! !20041104!20041022!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !YI!* !* !SERB-MONT !+000004242042!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! !D!20040930!B! ! !A! !A!U!R!1!001!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $61.8 million to BROWN & ROOT SERVICES for work described as: 200512!500050!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0052 ! !20041104!20041022!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !YI!* !* … Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of over 2000 days indicates a long-term need for these services. 3. The Cost Plus Award Fee (CPAF) structure incentivizes performance but can lead to higher costs if not managed carefully. 4. The prime contractor, Kellogg Brown & Root Services, has a significant role in delivering these essential services. 5. The contract value of over $133 million signifies a substantial investment in logistics support. 6. The award was made by the Department of the Army, highlighting a specific military requirement.

Value Assessment

Rating: fair

The contract value of $133,468,954 for a duration of 2107 days averages to approximately $63,345 per day. Without specific benchmarks for similar logistics support contracts in the region or for the specific services rendered, it is difficult to definitively assess value for money. The Cost Plus Award Fee (CPAF) pricing structure, while allowing for flexibility and performance incentives, can sometimes lead to costs exceeding fixed-price contracts if not rigorously managed. Further analysis would require comparison with industry standards for similar service scopes and durations.

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 data does not specify the number of bidders, but this procurement method generally fosters a competitive environment. A competitive process is expected to drive down prices and encourage innovation as contractors vie for the award. The absence of specific bidder numbers prevents a deeper analysis of the intensity of competition.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically leads to more favorable pricing and better service quality due to the pressure on contractors to be competitive.

Public Impact

The primary beneficiaries are the Department of the Army and potentially other branches of the Department of Defense requiring logistics support. Services delivered likely include a broad range of logistical functions such as supply chain management, transportation, warehousing, and maintenance. The geographic impact is not specified but likely supports military operations in the region where the services are rendered. Workforce implications include employment opportunities for personnel involved in logistics and support roles, both directly by the contractor and indirectly through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee (CPAF) contracts can lead to cost overruns if performance metrics and award fee criteria are not tightly controlled.
The long duration of the contract (over 5 years) increases the risk of scope creep or changing operational requirements not being adequately addressed.
Lack of specific details on the number of bidders in the 'full and open competition' makes it hard to gauge the true level of market pressure on pricing.

Positive Signals

Awarded through 'full and open competition,' which generally promotes competitive pricing and efficiency.
The prime contractor, Kellogg Brown & Root Services, is a large and experienced entity in providing such services, suggesting a degree of reliability.
The contract structure includes award fees, which can incentivize contractors to exceed performance expectations.

Sector Analysis

This contract falls within the broader Defense sector, specifically focusing on logistics support services. The market for defense logistics is substantial, driven by the operational needs of military forces globally. Companies like Kellogg Brown & Root Services are key players in this market, offering a wide array of services from base operations to complex supply chain management. Benchmarking this contract's value would require comparing it to other large-scale logistics support contracts awarded by the DoD or similar government agencies for comparable services and durations.

Small Business Impact

The provided data indicates that small business participation was not a primary set-aside for this contract (sb=false). While the prime contractor is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting is not detailed in this data, making it difficult to assess the impact on the small business ecosystem. Further investigation into subcontracting plans would be necessary.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of the Army. Performance monitoring, financial audits, and compliance checks are standard oversight mechanisms. The Cost Plus Award Fee structure necessitates close monitoring of performance against defined criteria to ensure fair and reasonable award fees. Transparency is generally maintained through contract reporting systems, though specific details of ongoing oversight are not provided.

Related Government Programs

Defense Logistics Agency (DLA) Operations
Base Operations Support (BOS)
Military Sealift Command Contracts
Global Contingency Logistics Support

Risk Flags

Cost Plus Award Fee (CPAF) pricing structure may lead to higher costs than fixed-price contracts.
Long contract duration increases the risk of scope creep and changing requirements.
Limited information on the number of bidders prevents a full assessment of competition intensity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.8 million to BROWN & ROOT SERVICES. 200512!500050!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0052 ! !20041104!20041022!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !YI!* !* !SERB-MONT !+000004242042!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 $61.8 million.

What is the period of performance?

Start: 2004-11-04. End: 2010-08-12.

What specific logistics services are encompassed by this contract?

The contract specifies 'LOGISTICS SUPPORT SERVICES' under the Product Service Code (PSC) R706. While the exact scope is not detailed in the provided data, typical logistics support services for a contract of this magnitude and duration awarded to a firm like Kellogg Brown & Root Services would likely include a comprehensive suite of functions. These could range from supply chain management, inventory control, transportation and distribution, warehousing, maintenance and repair of equipment, to potentially base support services. The 'SERB-MONT' designation might indicate a specific operational theater or program, such as support for operations in the Balkans or a similar region, which would further define the nature of the logistics required.

How does the Cost Plus Award Fee (CPAF) structure compare to other contract types for similar services?

Cost Plus Award Fee (CPAF) contracts are often used when the exact cost of performance is uncertain or when the government wants to incentivize exceptional performance. Unlike fixed-price contracts, CPAF reimburses the contractor for allowable costs and includes a base fee plus an award amount based on performance against pre-defined criteria. This contrasts with Cost Plus Fixed Fee (CPFF), where the total fee is fixed, or firm-fixed-price contracts, where the price is set regardless of costs incurred. For complex, long-term logistics services where performance quality is paramount and cost estimation is challenging, CPAF can be effective. However, it carries a higher risk of cost growth compared to fixed-price options if the award fee criteria are not stringent or if contractor costs escalate unexpectedly.

What is the historical spending pattern for logistics support services by the Department of the Army?

The Department of the Army, as a major component of the Department of Defense, consistently allocates significant funding towards logistics support services to maintain operational readiness and global reach. Historical spending patterns reveal a substantial and ongoing investment in areas such as supply chain management, transportation, maintenance, and base operations. Contracts for these services are often large-scale and long-term, awarded through various competitive and non-competitive procedures. Analyzing past spending data would show fluctuations tied to geopolitical events, force structure changes, and evolving military strategies. The trend generally indicates a sustained need for robust logistics capabilities, with spending often concentrated among a few large defense contractors specializing in these areas.

What are the potential risks associated with a contract of this size and duration?

Contracts of this magnitude ($133.5 million) and duration (over 5 years) carry inherent risks. One significant risk is cost escalation; the CPAF structure, while incentivizing performance, can lead to higher-than-anticipated costs if not meticulously managed. Scope creep is another major concern, where the requirements may expand beyond the original intent, leading to increased costs and delays. Contractor performance degradation over time is also a possibility, especially in long-term engagements. Furthermore, geopolitical shifts or changes in military strategy could render the contracted services less relevant or necessitate significant modifications, posing risks to both the government and the contractor. Ensuring robust oversight and flexible contract management is crucial to mitigate these risks.

What is the track record of Kellogg Brown & Root Services (KBR) in fulfilling large-scale defense logistics contracts?

Kellogg Brown & Root Services (KBR), now often referred to as KBR Inc., has a long and extensive track record in providing large-scale logistics, engineering, and construction services to government agencies, particularly the Department of Defense. They have been a major contractor for services in various operational theaters, including significant support roles in Iraq and Afghanistan. Their experience encompasses a wide range of logistics functions, from base support and life support services to complex supply chain operations. While KBR has a demonstrated capability to manage and execute large contracts, like any major defense contractor, they have also faced scrutiny and challenges related to contract performance, cost management, and specific incidents on past projects. Overall, their history indicates a capacity for handling substantial defense logistics requirements.

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, 77020

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