DoD's $56.1M logistics contract to Kellogg Brown & Root Services for services in Croatia shows fair value

Contract Overview

Contract Amount: $56,129,513 ($56.1M)

Contractor: Brown & Root Services

Awarding Agency: Department of Defense

Start Date: 2005-10-01

End Date: 2011-09-20

Contract Duration: 2,180 days

Daily Burn Rate: $25.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200601!600307!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0057 ! !20051001!20060430!133469119!133469119!964409007!N!KELLOGG BROWN & ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !HR! ! !CROATIA !+000001683648!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !561210!E! !5!B!S! ! !D!20070131!B! ! !A! !D!U!R!1!001!N!2A!Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! !Y! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $56.1 million to BROWN & ROOT SERVICES for work described as: 200601!600307!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0057 ! !20051001!20060430!133469119!133469119!964409007!N!KELLOGG BROWN & ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !HR! ! … Key points: 1. The contract's value of $56.1 million over its life appears reasonable given the scope of logistics support. 2. Full and open competition was utilized, suggesting a competitive bidding process that should drive price discovery. 3. The contract type (Cost Plus Award Fee) can incentivize performance but also carries inherent cost-plus risks. 4. The duration of the contract (2180 days) indicates a long-term need for these services. 5. The award to Kellogg Brown & Root Services, a known entity in government contracting, provides some level of performance predictability. 6. The absence of specific performance metrics in the provided data makes a detailed assessment of value-for-money challenging.

Value Assessment

Rating: fair

The contract value of $56.1 million for logistics support services in Croatia over approximately six years appears to be within a reasonable range for such operations. Benchmarking against similar large-scale, long-term logistics contracts for overseas operations is difficult without more specific details on the services rendered. However, the total value suggests a significant undertaking. The Cost Plus Award Fee (CPAF) contract type, while allowing for flexibility and performance incentives, can sometimes lead to higher costs compared to fixed-price contracts if not managed diligently. The provided data does not offer enough granular detail to definitively assess if the pricing is optimal or if significant cost efficiencies were achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The 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 that participated in this competition. A robust competition typically leads to better pricing and service offerings for the government. The fact that it was fully competed suggests that the agency sought to leverage market forces to obtain the best value. The absence of details on the number of bidders leaves room for further inquiry into the true level of competition.

Taxpayer Impact: A fully competed contract generally benefits taxpayers by fostering a competitive environment that drives down prices and encourages innovation, leading to more efficient use of public funds.

Public Impact

The primary beneficiaries of this contract are U.S. military personnel and potentially other government entities operating in or transiting through Croatia, who receive essential logistical support. The services delivered likely include transportation, supply chain management, warehousing, and potentially base support functions, ensuring operational readiness. The geographic impact is focused on Croatia, supporting U.S. operations within that region. Workforce implications include the potential for employment of local nationals in Croatia and U.S. personnel, contributing to economic activity in the area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if not closely monitored.
Limited information on specific performance metrics makes it difficult to assess the contractor's effectiveness.
The long duration of the contract could lead to complacency or reduced incentive for innovation over time.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Contractor Kellogg Brown & Root Services has a significant track record in government contracting.
The contract addresses a clear need for logistics support in a specific geographic region.

Sector Analysis

This contract falls within the broader Defense sector, specifically under logistics and support services. The market for these services is substantial, driven by the global operational needs of the U.S. military. Comparable spending benchmarks are difficult to establish without more precise service definitions, but large-scale overseas logistics contracts can range from tens to hundreds of millions of dollars. This contract represents a significant, albeit specific, investment in maintaining operational capabilities abroad.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (indicated by 'SB' status as false). There is no explicit information regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. Mechanisms likely include contract performance reviews, financial audits, and potentially oversight from the Defense Contract Audit Agency (DCAA) and the Inspector General. Transparency is facilitated through contract databases like FPDS, but detailed operational oversight is internal to the agency and contractor.

Related Government Programs

DoD Logistics Support Contracts
Overseas Operations Support
Cost-Plus Contracts
Department of the Army Contracts
European Command Support

Risk Flags

Cost Plus Award Fee contract type requires careful monitoring to manage costs.
Limited detail on specific services and performance metrics hinders in-depth value assessment.
Geographic location in Croatia may present unique logistical and operational challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.1 million to BROWN & ROOT SERVICES. 200601!600307!2100!W912ER!TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!N! !Y!0057 ! !20051001!20060430!133469119!133469119!964409007!N!KELLOGG BROWN & ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !HR! ! !CROATIA !+000001683648!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !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 $56.1 million.

What is the period of performance?

Start: 2005-10-01. End: 2011-09-20.

What was the specific nature of the logistics support services provided under this contract in Croatia?

The contract identifies the service as 'LOGISTICS SUPPORT SERVICES.' While specific details are not fully elaborated in the provided data snippet, such services typically encompass a wide range of activities essential for military operations. This can include, but is not limited to, transportation of personnel and equipment, supply chain management, warehousing and inventory control, maintenance support, facility management, and potentially life support services for deployed personnel. Given the location in Croatia, these services likely supported U.S. military presence, training exercises, or logistical hubs within the region, ensuring the smooth functioning of operations and readiness of forces.

How did the final cost compare to the initial estimated cost, and what factors influenced any variance?

The provided data indicates an 'Obligated Amount' (a) of $56,129,512.19 and a 'Base and Exercised Options Value' (br) of $25,747.00. The 'Total Contract Value' (a) is the most comprehensive figure available. Without knowing the initial estimated cost or the breakdown of awarded amounts versus potential ceiling amounts for a Cost Plus Award Fee (CPAF) contract, it's impossible to directly compare final costs to initial estimates or identify specific variance factors. CPAF contracts have a target cost, a fixed fee, and an award fee component, making the final cost dependent on performance and negotiated adjustments. Further analysis would require access to the contract's full award documentation and financial execution reports.

What was the performance history of Kellogg Brown & Root Services on this specific contract?

The provided data does not contain specific performance ratings or historical performance metrics for Kellogg Brown & Root Services (KBR) on this particular contract (DACA78-05-D-0003). While KBR is a large and experienced government contractor, assessing their performance on this specific engagement would require accessing performance evaluation reports (e.g., Contractor Performance Assessment Reporting System - CPARS) or other qualitative feedback mechanisms maintained by the contracting agency. The data does indicate the contract was awarded and executed, suggesting a baseline level of acceptance, but does not detail the quality, timeliness, or overall effectiveness of the services rendered.

Were there any significant challenges or disputes encountered during the life of this contract?

The provided data snippet does not contain information regarding challenges, disputes, or contract modifications beyond the initial award and basic execution details. Large, long-term contracts, especially those involving complex logistics in overseas environments, can often encounter unforeseen issues, scope changes, or disagreements between the contractor and the government. To determine if significant challenges or disputes arose, one would need to examine contract modification history, litigation records, or agency-specific dispute resolution logs associated with this contract number (DACA78-05-D-0003).

How does the cost per day or per service unit for this contract compare to industry benchmarks for similar logistics support in the region?

Calculating a precise cost per day or per unit for this contract is challenging due to the nature of the Cost Plus Award Fee (CPAF) structure and the broad definition of 'Logistics Support Services.' The total contract value is $56.1 million over approximately 2180 days (from Oct 1, 2005, to Sep 20, 2011). This yields a rough daily average of about $25,747. However, this average doesn't account for fluctuating operational tempo, specific services rendered on any given day, or the award fee component. Without detailed service delivery data (e.g., number of personnel supported, volume of supplies moved, specific maintenance tasks performed) and comparable market data for logistics support in Croatia during that period, a meaningful benchmark comparison is not feasible.

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

Parent Contract

Parent Award PIID: DACA7899D0003

IDV Type: IDC

Timeline