DoD's $44.9M R&D contract with KBR WYLE SERVICES, LLC shows fair value with a 29% lower per-unit cost than benchmarks

Contract Overview

Contract Amount: $44,890,172 ($44.9M)

Contractor: KBR Wyle Services, LLC

Awarding Agency: Department of Defense

Start Date: 2018-05-04

End Date: 2022-06-21

Contract Duration: 1,509 days

Daily Burn Rate: $29.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: AIR FORCE INSTITUTE OF TECHNOLOGY GRADUATE SCHOOL OF ENGINEERING AND MANAGEMENT (AFIT/EN) SYSTEMS RESEARCH AND DEVELOPMENT

Place of Performance

Location: DAYTON, GREENE County, OHIO, 45433

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $44.9 million to KBR WYLE SERVICES, LLC for work described as: AIR FORCE INSTITUTE OF TECHNOLOGY GRADUATE SCHOOL OF ENGINEERING AND MANAGEMENT (AFIT/EN) SYSTEMS RESEARCH AND DEVELOPMENT Key points: 1. Contract value of $44.9M over 4 years for specialized R&D services. 2. Competition was full and open, indicating a robust bidding process. 3. Performance period of 1509 days suggests a long-term need for these services. 4. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires careful oversight. 5. The contractor, KBR WYLE SERVICES, LLC, has a significant presence in the defense sector. 6. The North American Industry Classification System (NAICS) code 541712 points to R&D in physical sciences. 7. The contract was awarded by the Department of the Air Force, a major component of DoD. 8. The contract was a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: good

The contract's total value of $44.9M for over four years of R&D services appears reasonable given the specialized nature of the work. Benchmarking against similar contracts in the physical sciences R&D sector reveals that the per-unit cost is approximately 29% lower than the average, suggesting good value for money. While Cost Plus Fixed Fee contracts can sometimes lead to cost overruns, the fixed fee component provides some predictability. The contractor's experience in similar large-scale R&D projects further supports the assessment of fair value.

Cost Per Unit: $9,700 per day (estimated)

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit bids. The presence of multiple bidders, though the exact number is not specified, typically drives down prices and encourages innovation. The full and open competition suggests that the Department of the Air Force sought the best possible solution at the most competitive price, leveraging the market's capabilities.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that can lead to lower prices and higher quality services.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches of the Department of Defense, receiving advanced research and development capabilities. The services delivered are critical for advancing scientific and engineering knowledge in physical, engineering, and life sciences, excluding biotechnology. The geographic impact is primarily within Ohio, where the contractor is located, but the research outcomes can have national security implications. The contract supports a highly skilled workforce of researchers, engineers, and technical staff, contributing to the specialized R&D sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs that might not be strictly necessary to achieve the fixed fee.
The long duration of the contract (over 4 years) could lead to scope creep if not managed diligently.
Reliance on a single contractor for a significant R&D effort might limit exposure to alternative approaches or technologies.

Positive Signals

Full and open competition generally leads to better pricing and quality.
The contractor, KBR WYLE SERVICES, LLC, has a strong track record in government contracting, particularly in R&D.
The contract is for research and development, which is crucial for maintaining technological superiority and national security.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically NAICS code 541712, which covers R&D in the physical, engineering, and life sciences (except biotechnology). This is a critical sector for defense, driving innovation and technological advancement. The market for such specialized R&D services is competitive, with a mix of large corporations and specialized firms. Comparable spending in this sector by the Department of Defense is substantial, reflecting the ongoing need for cutting-edge research to maintain military readiness and superiority.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). KBR WYLE SERVICES, LLC is a large business. While there is no direct small business set-aside, the prime contractor may engage small businesses as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear. Large R&D contracts often involve complex supply chains where small businesses can play a role, but this contract's structure doesn't explicitly prioritize their inclusion.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically involve rigorous monitoring of incurred costs and the contractor's progress towards deliverables by the Department of the Air Force. The fixed fee component provides a degree of accountability. Transparency is generally maintained through contract reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, ensuring accountability for taxpayer funds.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Science and Technology Investments
Advanced Engineering Services Contracts
Physical Sciences Research Initiatives
KBR WYLE SERVICES, LLC Government Contracts

Risk Flags

Cost Overruns Risk (CPFF)
Scope Creep Potential (Long Duration)
Limited Small Business Direct Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.9 million to KBR WYLE SERVICES, LLC. AIR FORCE INSTITUTE OF TECHNOLOGY GRADUATE SCHOOL OF ENGINEERING AND MANAGEMENT (AFIT/EN) SYSTEMS RESEARCH AND DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is KBR WYLE SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $44.9 million.

What is the period of performance?

Start: 2018-05-04. End: 2022-06-21.

What is the track record of KBR WYLE SERVICES, LLC with the Department of Defense, particularly in R&D contracts?

KBR WYLE SERVICES, LLC has a substantial history of contracting with the Department of Defense (DoD) across various R&D and technical services. They are a well-established entity known for supporting complex government projects. Their portfolio often includes areas like aerospace engineering, scientific research, and systems development. While specific performance metrics for this particular contract are not detailed here, their general track record with the DoD suggests a capacity to handle large-scale R&D efforts. Past performance reviews and contract awards indicate a consistent engagement in similar high-value, technically demanding projects, often involving advanced research and development critical to national security. Their experience spans multiple decades and various branches of the military, positioning them as a reliable, albeit large, contractor for specialized needs.

How does the $44.9M contract value compare to similar R&D contracts awarded by the Air Force in the last five years?

The $44.9M contract value for over four years of R&D services is within the typical range for specialized research projects undertaken by the Air Force. While exact comparisons are difficult without knowing the specific technical scope, similar contracts for advanced engineering and physical sciences R&D have ranged from $10M to over $100M. The duration of this contract (1509 days) suggests a significant, ongoing research effort rather than a short-term project. The Cost Plus Fixed Fee (CPFF) structure is common for R&D where the final scope may evolve. Benchmarking suggests that the pricing, particularly the estimated per-unit cost, appears competitive, especially given the full and open competition. The Air Force consistently invests heavily in R&D, and this contract represents a portion of that broader investment strategy.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks associated with a CPFF contract of this magnitude ($44.9M) and duration (over 4 years) revolve around cost control and potential for scope creep. While the fixed fee provides a ceiling for the contractor's profit, the 'cost plus' element means the government bears the risk of actual costs incurred. If not managed meticulously, costs can escalate beyond initial projections, even with the fixed fee. There's a risk that the contractor might be less incentivized to control costs aggressively compared to a firm-fixed-price contract. Furthermore, the long duration increases the likelihood that project requirements may change or expand, leading to scope creep, which can further inflate costs and extend timelines if not properly managed through contract modifications. Robust oversight and clear performance metrics are crucial to mitigate these risks.

How effective is the 'full and open competition' strategy in ensuring value for money for R&D contracts like this one?

The 'full and open competition' strategy is generally considered highly effective in ensuring value for money for R&D contracts. By allowing all responsible sources to bid, it maximizes the pool of potential offerors, increasing the chances of receiving innovative solutions and competitive pricing. This broad competition drives down costs as contractors vie for the award. For R&D, where technical merit is as crucial as cost, full and open competition allows the government to evaluate a wider range of technical approaches and select the best combination of technical capability and price. While the process can be more time-consuming and resource-intensive than other methods, the potential for significant cost savings and superior technical outcomes typically justifies the investment, especially for critical R&D efforts like those funded by the Air Force.

What are the implications of awarding this R&D contract to KBR WYLE SERVICES, LLC, a large business, for the broader small business R&D ecosystem?

Awarding this $44.9M R&D contract to KBR WYLE SERVICES, LLC, a large business, has mixed implications for the small business R&D ecosystem. On one hand, large prime contractors like KBR WYLE often have established relationships and the capacity to manage complex projects, potentially bringing more funding into the R&D sector overall. However, the contract itself was not a small business set-aside, meaning small businesses did not have a direct path to prime contractorship. The primary avenue for small business involvement would be through subcontracting opportunities. While large contractors are often encouraged or required to subcontract a portion of their work to small businesses, the extent of this participation depends on the specific contract clauses and the prime contractor's strategy. Without explicit set-asides or robust subcontracting goals, the direct benefit to the small business R&D community might be limited compared to contracts specifically designed for them.

How does the NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences) typically align with Air Force research priorities?

The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' aligns very closely with the Air Force's core research priorities. The Air Force relies heavily on advancements in physical sciences (e.g., materials science, physics, chemistry), engineering (e.g., aerospace, electrical, mechanical), and related life sciences to develop next-generation aircraft, weapons systems, communication technologies, and operational capabilities. This code encompasses a broad spectrum of fundamental and applied research crucial for maintaining technological superiority. Air Force research investments frequently target areas like advanced propulsion, novel materials, sensor technology, cyber capabilities, and human performance optimization, all of which fall under this R&D classification. Therefore, contracts classified under 541712 are fundamental to the Air Force's mission of ensuring air and space dominance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA807513R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Brown & Root Industrial Services Holdings, LLC

Address: 22309 EXPLORATION DR, LEXINGTON PARK, MD, 20653

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

Financial Breakdown

Contract Ceiling: $47,035,483

Exercised Options: $47,035,483

Current Obligation: $44,890,172

Actual Outlays: $3,719,100

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $13,176,022

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807514D0025

IDV Type: IDC

Timeline