DoD's $325M vehicle support contract to VSE Corp. shows fair value despite limited competition

Contract Overview

Contract Amount: $324,752,084 ($324.8M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2009-01-29

End Date: 2011-01-28

Contract Duration: 729 days

Daily Burn Rate: $445.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: CR-2417, "PM ASSURED MOBILITY SYSTEMS (AMS) RG31 AND RG33 FAMILY OF VEHICLES (FOV)CONTRACTOR LOGISTICS SUPPORT (CLS)"

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $324.8 million to VSE CORPORATION for work described as: CR-2417, "PM ASSURED MOBILITY SYSTEMS (AMS) RG31 AND RG33 FAMILY OF VEHICLES (FOV)CONTRACTOR LOGISTICS SUPPORT (CLS)" Key points: 1. Contract awarded to VSE Corporation for logistics support of RG31 and RG33 vehicles. 2. The contract duration was 729 days, indicating a medium-term support requirement. 3. Awarded under full and open competition, suggesting a competitive bidding process. 4. The contract type was Time and Materials, which can pose cost control challenges. 5. VSE Corporation is the sole awardee, simplifying management but potentially limiting options. 6. The contract value of over $324 million represents a significant investment in vehicle sustainment.

Value Assessment

Rating: fair

The contract's value of $324.75 million over approximately two years for contractor logistics support of specialized vehicles appears within a reasonable range for such services. Benchmarking against similar support contracts for military vehicles is challenging due to the specific nature of the RG31 and RG33 platforms. However, the Time and Materials pricing structure, while common for evolving support needs, carries inherent risks of cost overruns if not meticulously managed and monitored by the government. The provided data does not allow for a direct per-unit cost comparison, but the overall expenditure reflects a substantial commitment to maintaining operational readiness for these assets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. While the specific number of bidders is not provided, this approach generally fosters a competitive environment, which should theoretically lead to better pricing and terms for the government. The fact that VSE Corporation was the sole awardee suggests they offered the best value proposition among the competing proposals. The open competition mechanism is designed to ensure a broad range of potential contractors can participate, thereby enhancing price discovery.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it maximizes the potential for cost savings by encouraging multiple companies to vie for the contract, driving down prices through competitive pressure.

Public Impact

The primary beneficiaries are the U.S. Army units operating the RG31 and RG33 family of vehicles, ensuring their operational readiness and availability. Services delivered include contractor logistics support, which encompasses maintenance, repair, parts, and technical assistance for the vehicles. The geographic impact is likely concentrated where these vehicles are deployed, potentially including domestic bases and overseas operational theaters. Workforce implications include the employment of skilled technicians and support personnel by VSE Corporation to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not closely managed.
Lack of specific bidder count makes it difficult to fully assess the intensity of competition.
Sole awardee may limit future competitive opportunities or price negotiation leverage.
The contract's duration (729 days) is relatively short for a major logistics support program, potentially leading to frequent re-competition and associated transition costs.

Positive Signals

Awarded under full and open competition, which is a positive signal for market engagement.
VSE Corporation's role as a sole awardee can streamline communication and execution for this specific support.
The contract addresses critical logistics support for specialized military vehicles, ensuring operational readiness.

Sector Analysis

This contract falls within the broader defense logistics and maintenance sector, a critical component of military readiness. The market for specialized vehicle support is often characterized by a mix of large defense contractors and niche service providers. Spending in this area is driven by the need to maintain aging fleets and support new acquisitions, ensuring vehicles are operational in diverse environments. Comparable spending benchmarks are difficult to establish without detailed knowledge of the specific vehicle systems and the scope of 'logistics support,' which can range from basic maintenance to full lifecycle management.

Small Business Impact

The provided data indicates that small business participation (SB set-aside and subcontracting) was not a feature of this specific award (SS: false, SB: false). This suggests that the contract was not specifically targeted towards small businesses, and VSE Corporation, as the prime contractor, likely managed the entire scope of work. The absence of small business set-aside requirements means that opportunities for small businesses to participate as prime contractors or through subcontracting were not explicitly mandated under this award, potentially limiting their direct involvement in this particular contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Contracting Command and the relevant program executive office responsible for the RG31 and RG33 vehicles. Accountability measures would be embedded in the contract's performance work statement (PWS), with deliverables, milestones, and quality standards subject to government inspection and acceptance. Transparency is facilitated through contract award databases like FPDS-NG, which provide basic information on contract value, duration, and parties involved. Inspector General (IG) jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Department of the Army Vehicle Procurement
Military Vehicle Maintenance and Repair Services
Contractor Logistics Support (CLS) Programs
Defense Logistics Agency (DLA) Support Contracts

Risk Flags

Cost Control Risk (T&M Contract Type)
Performance Monitoring Intensity
Sole Awardee Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $324.8 million to VSE CORPORATION. CR-2417, "PM ASSURED MOBILITY SYSTEMS (AMS) RG31 AND RG33 FAMILY OF VEHICLES (FOV)CONTRACTOR LOGISTICS SUPPORT (CLS)"

Who is the contractor on this award?

The obligated recipient is VSE CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $324.8 million.

What is the period of performance?

Start: 2009-01-29. End: 2011-01-28.

What is the historical spending trend for Contractor Logistics Support (CLS) for the RG31 and RG33 family of vehicles?

Analyzing historical spending trends for CLS on the RG31 and RG33 family of vehicles requires access to detailed contract databases beyond the single award provided. This specific contract, CR-2417, represents a significant outlay of over $324 million from January 2009 to January 2011. To understand broader trends, one would need to examine all prior and subsequent contracts for CLS related to these specific vehicle platforms, as well as similar vehicle types. Factors influencing spending trends include operational tempo, vehicle age, upgrade cycles, and changes in military doctrine or sustainment strategies. Without a comprehensive view of the contract history, it's difficult to ascertain if this $325M award represents an increase, decrease, or stable level of spending for this support function.

How does the per-unit cost of support for the RG31/RG33 vehicles compare to similar armored personnel carriers?

Determining a precise per-unit cost of support for the RG31/RG33 vehicles under this contract is not feasible with the provided data. The contract is a Time and Materials (T&M) award valued at $324.75 million over 729 days, covering 'Contractor Logistics Support (CLS).' This broad scope likely includes labor, parts, maintenance, and potentially other services, making a simple per-unit calculation difficult without knowing the exact number of vehicles supported and the specific breakdown of costs. To compare with similar armored personnel carriers (APCs), one would need access to detailed cost breakdowns for those vehicles' CLS contracts, including the number of units, duration, and specific services rendered. Such comparisons are often proprietary and vary significantly based on vehicle complexity, operational environment, and contract terms.

What are the key performance indicators (KPIs) used to measure VSE Corporation's performance under this contract?

The provided contract data does not explicitly list the Key Performance Indicators (KPIs) for VSE Corporation's performance under CR-2417. However, for a Contractor Logistics Support (CLS) contract of this nature, typical KPIs would likely revolve around metrics such as vehicle availability rates, Mean Time Between Failures (MTBF), Mean Time To Repair (MTTR), parts fulfillment rates, response times for technical support, and adherence to maintenance schedules. The government would monitor these KPIs to ensure the operational readiness of the RG31 and RG33 vehicles. Performance would be assessed against the requirements outlined in the Performance Work Statement (PWS), and deviations could impact payment or lead to corrective actions.

What is VSE Corporation's track record with similar defense logistics support contracts?

VSE Corporation has a significant track record in providing logistics, engineering, and technical services to the U.S. military and other government agencies. While this specific contract focuses on the RG31 and RG33 vehicles, VSE has experience supporting a wide range of platforms, including naval vessels, aircraft, and other ground vehicles. Their portfolio often includes maintenance, repair, overhaul (MRO), supply chain management, and lifecycle support. A review of VSE's contract history would reveal numerous awards across different branches of the Department of Defense and other federal entities, demonstrating their capability in managing complex support requirements. Their performance on past contracts, including any awards or penalties, would provide context for their reliability in executing this particular logistics support agreement.

What is the risk associated with the Time and Materials (T&M) contract type for this level of spending?

The Time and Materials (T&M) contract type, used for this $324.75 million award, carries inherent risks for the government, particularly concerning cost control. T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials used. While flexible and suitable for requirements that are not well-defined or are expected to change, they offer less cost certainty than fixed-price contracts. For a contract of this magnitude and duration (729 days), there is a significant risk that costs could escalate beyond initial estimates if work is inefficiently performed, if labor rates are higher than anticipated, or if material costs fluctuate unexpectedly. Robust government oversight, including detailed monitoring of labor hours, material receipts, and progress, is crucial to mitigate these risks and ensure value for money.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 2550 HUNTINGTON AVE, ALEXANDRIA, VA, 22303

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $512,401,803

Exercised Options: $324,752,084

Current Obligation: $324,752,084

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAB0703DB012

IDV Type: IDC

Timeline