Netcentric Technology, LLC awarded $213M for Kirtland AFB engineering services, with 4 bidders in a competitive process

Contract Overview

Contract Amount: $213,334,104 ($213.3M)

Contractor: Netcentric Technology, LLC

Awarding Agency: Department of Defense

Start Date: 2021-03-23

End Date: 2026-05-31

Contract Duration: 1,895 days

Daily Burn Rate: $112.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: KIRTLAND ENGINEERING OPERATIONS SERVICES (KEOS) FOR KIRTLAND AIR FORCE BASE (KAFB, NEW MEXICO

Place of Performance

Location: KIRTLAND AFB, BERNALILLO County, NEW MEXICO, 87117

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $213.3 million to NETCENTRIC TECHNOLOGY, LLC for work described as: KIRTLAND ENGINEERING OPERATIONS SERVICES (KEOS) FOR KIRTLAND AIR FORCE BASE (KAFB, NEW MEXICO Key points: 1. The contract value of $213 million over its period of performance suggests a significant investment in engineering support. 2. The competition involved 4 bidders, indicating a moderate level of market interest for these specialized services. 3. The contract type (Cost Plus Fixed Fee) can present cost control challenges if not closely monitored. 4. Performance is for Kirtland Air Force Base, a key installation for aerospace and defense activities. 5. The duration of 1895 days (approximately 5.2 years) points to a long-term need for sustained engineering expertise. 6. The exclusion of sources in the competition type warrants further examination of the procurement process.

Value Assessment

Rating: fair

Benchmarking the value of this $213 million contract is challenging without specific comparable contracts for similar engineering services at other Air Force bases. The Cost Plus Fixed Fee (CPFF) contract type, while allowing flexibility, can lead to higher costs if the fixed fee is not adequately justified or if costs escalate beyond initial projections. A detailed review of the contractor's proposed costs and the fixed fee against industry standards for engineering services would be necessary to fully assess value for money. The limited competition may also impact price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests an initial broad solicitation followed by a restriction. With 4 bidders, the competition level appears moderate. However, the 'exclusion of sources' aspect raises questions about why certain potential bidders were excluded and if this limited the pool of qualified offerors. A more robust competition typically involves a larger number of bidders, which can drive down prices and improve the quality of proposals.

Taxpayer Impact: The limited competition, particularly with the exclusion of sources, may have resulted in a higher price for taxpayers than could have been achieved in a truly open and unrestricted bidding process. It suggests that the government may not have received the full benefit of market competition.

Public Impact

The primary beneficiaries are the Department of the Air Force and personnel at Kirtland Air Force Base, who will receive essential engineering support. Services delivered include a broad range of engineering expertise crucial for the operation and maintenance of base infrastructure and systems. The geographic impact is concentrated in New Mexico, specifically around Kirtland Air Force Base. Workforce implications include the direct employment of engineers and technical staff by Netcentric Technology, LLC, and potentially indirect employment through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition type needs clarification to ensure fairness and maximize competition.
Cost Plus Fixed Fee contracts require diligent oversight to manage potential cost overruns and ensure reasonable profit margins.
The moderate number of bidders suggests that market research and outreach could be enhanced for future solicitations.

Positive Signals

The award to a single contractor indicates a clear selection based on perceived best value.
The long-term nature of the contract (over 5 years) provides stability for essential engineering services at Kirtland AFB.
The contract supports a critical Air Force installation, ensuring operational readiness.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS code 541330), which is a significant component of the broader professional, scientific, and technical services industry. This sector is vital for government operations, particularly in defense, infrastructure, and research. The market for engineering services supporting federal agencies is substantial, with spending often concentrated in areas requiring specialized expertise like aerospace, defense systems, and facility management. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or other federal entities for similar base operations.

Small Business Impact

The data indicates that small business participation (sb: false) was not a primary consideration or set-aside for this specific contract. There is no explicit mention of small business subcontracting goals. This suggests that the prime contract was likely awarded to a large business, and opportunities for small businesses would depend on the prime contractor's subcontracting plans, which are not detailed here. Without specific subcontracting requirements, the direct impact on the small business ecosystem for this particular award is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant Air Force program management office at Kirtland Air Force Base. Accountability measures are typically embedded within the contract's performance work statement, requiring adherence to specified standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS, which provide basic information on the award. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Kirtland Air Force Base Operations and Maintenance
Department of Defense Engineering Services Contracts
Air Force Base Support Services
Aerospace Engineering Support
Professional, Scientific, and Technical Services

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition may impact price discovery.
Rationale for 'exclusion of sources' needs clarification.
Need for robust government oversight of contractor performance and costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $213.3 million to NETCENTRIC TECHNOLOGY, LLC. KIRTLAND ENGINEERING OPERATIONS SERVICES (KEOS) FOR KIRTLAND AIR FORCE BASE (KAFB, NEW MEXICO

Who is the contractor on this award?

The obligated recipient is NETCENTRIC TECHNOLOGY, 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 $213.3 million.

What is the period of performance?

Start: 2021-03-23. End: 2026-05-31.

What is the track record of Netcentric Technology, LLC in performing similar engineering services for the Department of Defense?

Assessing Netcentric Technology, LLC's track record requires a deep dive into their past performance on similar contracts. This would involve reviewing past performance evaluations, any awards or penalties received, and the scope and complexity of previous engineering services provided to the DoD. Information on their experience with Cost Plus Fixed Fee contracts, their ability to manage project costs, and their success in meeting technical requirements for Air Force installations would be crucial. Without specific past performance data, it's difficult to definitively gauge their capability and reliability for this significant Kirtland AFB contract. A review of their contract history, including any contract disputes or terminations, would also provide valuable insights into their operational performance and adherence to contractual obligations.

How does the awarded value compare to similar engineering services contracts at other Air Force bases?

Directly comparing the $213 million value of the KEOS contract to similar engineering services contracts at other Air Force bases is challenging without access to detailed contract data for comparable installations. Factors such as the size and mission of the base, the specific types of engineering services required (e.g., civil, mechanical, electrical, aerospace), and the duration of the contract significantly influence its total value. However, a general benchmark can be established by looking at the average annual value of large-scale base operations and maintenance contracts awarded by the Air Force. If this contract's annual value falls within or below the typical range for similar-sized bases and service scopes, it might suggest reasonable pricing. Conversely, if it appears significantly higher, it could indicate potential overpricing or a more extensive scope of work.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this engineering services requirement?

The primary risk associated with the Cost Plus Fixed Fee (CPFF) contract type for this engineering services requirement is the potential for cost escalation without a corresponding increase in value or scope. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. If the contractor's costs increase due to inefficiencies, poor planning, or unforeseen circumstances, the government pays these higher costs, while the contractor's profit remains fixed. This can incentivize contractors to be less cost-conscious than in fixed-price contracts. Effective oversight by the government is critical to monitor costs, ensure they are reasonable and allocable, and prevent scope creep that could inflate the overall contract expenditure beyond initial projections. The fixed fee itself also needs to be justified based on the level of risk and effort involved.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method imply for price discovery and taxpayer value?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method implies a complex bidding process. Initially, the solicitation was open to all responsible sources. However, certain sources were subsequently excluded before proposals were fully evaluated or before the final award. This exclusion, if not based on clear, objective criteria related to capability or responsibility, can limit the competitive pool. A smaller pool of bidders may lead to less aggressive pricing and potentially higher costs for taxpayers compared to a truly unrestricted full and open competition where all qualified vendors could participate without prior exclusion. The rationale behind the exclusion is critical; if it was to ensure specialized capabilities or address specific national security concerns, the trade-off might be justifiable. However, if the exclusions were arbitrary, it could undermine price discovery and taxpayer value.

How does the duration of the contract (1895 days) impact the overall cost and potential for contractor performance?

The contract duration of 1895 days (approximately 5.2 years) provides a long-term engagement for engineering services at Kirtland Air Force Base. This extended period offers stability and allows the contractor, Netcentric Technology, LLC, to develop deep expertise and familiarity with the base's specific needs and systems. From a cost perspective, a longer duration can sometimes lead to economies of scale and potentially lower annual costs compared to multiple short-term contracts, as the contractor can amortize startup and mobilization costs over a longer period. However, it also increases the total contract value and the government's exposure to potential cost increases over time, especially with a CPFF structure. For contractor performance, a longer duration allows for more consistent service delivery and the potential for continuous improvement, but it also necessitates sustained government oversight to ensure performance remains high throughout the contract life.

What are the potential implications of this contract on the small business industrial base in New Mexico?

Given that this contract was not set aside for small businesses (sb: false) and there's no explicit mention of subcontracting requirements, the direct positive impact on the small business industrial base in New Mexico is likely limited. The prime contract is awarded to Netcentric Technology, LLC, which is presumably a larger entity. Opportunities for New Mexico-based small businesses would primarily arise if Netcentric Technology, LLC actively seeks them out for subcontracting roles. Without specific subcontracting plans or goals mandated in the contract, the extent to which small businesses in the state will benefit is uncertain and depends heavily on the prime contractor's procurement practices. It's possible that local small businesses could be engaged for specific niche services, but this is not guaranteed by the contract terms as presented.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Arctic Slope Regional Corporation

Address: 3349 RTE 138 BLDG A 2ND FL, WALL, NJ, 07719

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $401,632,831

Exercised Options: $245,027,766

Current Obligation: $213,334,104

Actual Outlays: $84,225,468

Subaward Activity

Number of Subawards: 264

Total Subaward Amount: $36,278,670

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAD20D1129

IDV Type: IDC

Timeline