DoD's $265M DynCorp contract for base supply bridge operations raises value and competition concerns

Contract Overview

Contract Amount: $264,785,379 ($264.8M)

Contractor: Dyncorp International LLC

Awarding Agency: Department of Defense

Start Date: 2017-04-27

End Date: 2018-09-30

Contract Duration: 521 days

Daily Burn Rate: $508.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF CONTRACTOR OPERATED AND MAINTAINED BASE SUPPLY BRIDGE

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76177

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $264.8 million to DYNCORP INTERNATIONAL LLC for work described as: IGF::OT::IGF CONTRACTOR OPERATED AND MAINTAINED BASE SUPPLY BRIDGE Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher spending without direct performance linkage. 2. A sole-source award limits price discovery and potentially inflates costs compared to a competitive environment. 3. The contract's duration and cost raise questions about long-term value and potential for cost overruns. 4. Performance context is limited due to the lack of competitive benchmarking. 5. This contract falls within the 'Other Support Activities for Air Transportation' sector, indicating a focus on logistical support. 6. The absence of small business set-asides suggests limited opportunities for smaller enterprises in this specific contract.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can lead to higher costs if not tightly managed. Without a competitive baseline, it's difficult to definitively assess if the $265 million price tag represents good value for money. The provided data does not offer direct comparisons to similar contracts or market rates for base supply bridge operations, making a precise value-for-money assessment challenging. The fixed fee component provides some incentive for the contractor to control costs, but the overall cost reimbursement nature of CPFF contracts warrants careful scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a direct award. The lack of competition means that potential cost savings that could arise from a bidding process were not realized. It also limits the government's ability to explore alternative solutions or pricing structures that might have been offered by other qualified contractors.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This can result in less efficient use of public funds compared to contracts awarded through full and open competition.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives essential logistical support for base operations. The contract delivers services related to operating and maintaining a base supply bridge, crucial for the flow of goods and materials. The geographic impact is primarily within the operational theater where the base supply bridge is located, likely supporting military personnel and operations. Workforce implications include the employment of personnel by DynCorp International LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-plus-fixed-fee structure could incentivize increased spending.
Limited transparency on performance metrics and value for money.
Sole-source award raises questions about the availability of alternative solutions.

Positive Signals

Contract provides essential operational support to the Air Force.
DynCorp International LLC is a known entity in government contracting.
Fixed fee component offers some cost control incentive.

Sector Analysis

This contract falls under the 'Other Support Activities for Air Transportation' sector, which is a niche within the broader aerospace and defense industry. This sector often involves specialized logistical, maintenance, and operational support services required for military aviation. The market size for such specialized support can be significant, driven by government defense spending. Comparable spending benchmarks are difficult to establish without more specific details on the scope of 'base supply bridge operations,' but contracts for base support services can range from millions to hundreds of millions of dollars depending on scale and duration.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary awardee, DynCorp International LLC, is a large business. Consequently, there are likely limited direct subcontracting opportunities for small businesses under this specific contract, unless DynCorp voluntarily engages them. The absence of a small business set-aside means that this particular procurement did not contribute to the government's small business contracting goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is limited by the sole-source nature and the lack of publicly available detailed performance reports. Accountability would be managed through contract clauses, performance reviews, and potential audits by the Defense Contract Audit Agency (DCAA).

Related Government Programs

Base Operations Support (BOS)
Logistics and Supply Chain Management Services
Air Transportation Support Services
Defense Logistics Agency Contracts
Contingency Base Support

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competitive benchmarking
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $264.8 million to DYNCORP INTERNATIONAL LLC. IGF::OT::IGF CONTRACTOR OPERATED AND MAINTAINED BASE SUPPLY BRIDGE

Who is the contractor on this award?

The obligated recipient is DYNCORP INTERNATIONAL 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 $264.8 million.

What is the period of performance?

Start: 2017-04-27. End: 2018-09-30.

What is the specific nature of the 'base supply bridge' operations and why was it deemed sole-source?

The term 'base supply bridge' likely refers to a critical logistical node or system that facilitates the flow of supplies and materials to and from a military base. This could involve warehousing, inventory management, transportation coordination, and distribution services. The decision for a sole-source award typically stems from a determination that only one contractor possesses the unique capabilities, security clearances, or existing infrastructure required to perform the service effectively and without interruption. This might be due to the contractor's established presence, specialized knowledge of the specific base's systems, or urgent operational needs where initiating a full competition would be impractical or detrimental to mission readiness. Without further documentation, the precise justification remains speculative but usually centers on necessity and lack of alternatives.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in terms of cost efficiency for similar services?

Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used for research and development or complex services where the scope is not well-defined, or costs are difficult to estimate accurately upfront. Compared to Firm-Fixed-Price (FFP) contracts, CPFF generally offers less cost certainty for the government, as the total cost is not capped. However, FFP contracts can lead to higher initial bids to account for contractor risk. For services like base supply operations, where predictability might be higher, an FFP or even a Cost Plus Incentive Fee (CPIF) contract could potentially offer better value by aligning contractor profit more directly with performance and cost savings. The CPFF structure here, especially without competition, warrants scrutiny for potential cost escalations.

What are the potential risks associated with a sole-source award of this magnitude ($265M)?

A sole-source award of this magnitude carries several significant risks. Firstly, the lack of competition means the government likely paid a higher price than it might have in a competitive bidding process, representing a potential loss of taxpayer value. Secondly, without competing alternatives, the government may not be leveraging the most innovative or efficient solutions available in the market. Thirdly, the incumbent contractor may have less incentive to control costs or improve performance aggressively, knowing that competitors are not actively vying for the contract. Finally, sole-source awards can sometimes indicate a lack of strategic planning or market analysis, potentially leading to over-reliance on a single provider and creating vulnerabilities if that provider faces financial or operational difficulties.

What performance metrics or oversight mechanisms are typically in place for contracts like this to ensure value for money?

For contracts like this, especially those with a CPFF structure, robust oversight and clearly defined performance metrics are crucial. Key performance indicators (KPIs) would typically focus on aspects such as on-time delivery rates, inventory accuracy, cost control measures (tracking actual costs against projections), response times for supply requests, and overall operational efficiency. Oversight mechanisms often include regular progress reviews, site visits, audits by agencies like the Defense Contract Audit Agency (DCAA), and performance evaluations documented in Contractor Performance Assessment Reporting System (CPARS). The government contracting officer and their representatives are responsible for monitoring performance against the contract's requirements and ensuring that the contractor meets its obligations and that the services provided represent good value.

How does the duration of the contract (521 days) impact the assessment of its value and risk?

The contract duration of 521 days (approximately 1 year and 5 months) is a moderate term for a service contract of this nature. A shorter duration might limit the contractor's ability to achieve economies of scale or implement long-term improvements, potentially leading to higher per-diem costs. Conversely, a very long duration, especially with a sole-source CPFF structure, increases the risk of cost overruns and reduced contractor incentive to innovate or become more efficient over time. This duration seems sufficient to establish operational routines but short enough that the government should be planning for future competition or contract renewal well in advance to ensure continuity and potentially better terms in subsequent awards.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pae-Parsons Global Logistics Services, LLC

Address: 13500 HERITAGE PKWY, FORT WORTH, TX, 76177

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

Financial Breakdown

Contract Ceiling: $267,395,550

Exercised Options: $267,395,550

Current Obligation: $264,785,379

Actual Outlays: $466,471

Subaward Activity

Number of Subawards: 894

Total Subaward Amount: $85,320,916

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline