University of Alaska Fairbanks awarded $62M for labor support services by the Department of Defense

Contract Overview

Contract Amount: $62,044,650 ($62.0M)

Contractor: University of Alaska Fairbanks

Awarding Agency: Department of Defense

Start Date: 2020-06-10

End Date: 2023-07-09

Contract Duration: 1,124 days

Daily Burn Rate: $55.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: LABOR SUPPORT

Place of Performance

Location: FAIRBANKS, FAIRBANKS NORTH STAR County, ALASKA, 99775

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $62.0 million to UNIVERSITY OF ALASKA FAIRBANKS for work described as: LABOR SUPPORT Key points: 1. The contract value of $62 million over approximately three years represents a significant investment in specialized labor support. 2. The sole-source nature of this award warrants scrutiny regarding potential cost efficiencies and market alternatives. 3. Performance risk appears moderate, given the duration and nature of labor support services, but requires ongoing monitoring. 4. The contract's focus on academic institutions suggests a need for specialized skills not readily available in the general labor market. 5. This award positions the University of Alaska Fairbanks as a key provider of labor support within the defense sector. 6. The absence of small business set-asides indicates a focus on large, specialized entities for this requirement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details and comparable contracts. However, a $62 million award for labor support over three years suggests a substantial per-annum cost. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs if not managed tightly, as it incentivizes spending to cover costs plus a fixed profit. Further analysis would require comparing the specific labor categories and rates to market data and similar government contracts for academic institutions providing support services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, the University of Alaska Fairbanks, was considered. This approach is typically used when a unique capability or circumstance justifies bypassing full and open competition. The lack of competition means there was no opportunity for other qualified institutions to bid, potentially limiting price discovery and the government's ability to secure the most cost-effective solution through market forces.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as competitive pressures are absent. It also limits opportunities for other institutions to secure federal funding and demonstrate their capabilities.

Public Impact

The University of Alaska Fairbanks directly benefits from this significant funding, enabling continued operations and potential expansion of its support services. The Department of Defense receives specialized labor support, crucial for its operational needs, likely in areas requiring academic or research expertise. The geographic impact is concentrated in Alaska, where the University of Alaska Fairbanks is located, potentially creating local employment and economic activity. Workforce implications include the potential for employment opportunities at the university for researchers, administrators, and support staff involved in fulfilling the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type may incentivize higher spending if not rigorously overseen.
Lack of transparency in the justification for sole-source award.
Limited visibility into the specific labor categories and their associated costs.
Potential for scope creep in CPFF contracts if not managed effectively.

Positive Signals

University of Alaska Fairbanks is a known entity with established infrastructure for research and support.
Long contract duration (over 3 years) suggests a stable, ongoing need for these services.
Award to an academic institution may indicate a need for specialized, high-level expertise.
Department of Defense has a clear requirement for labor support, indicating program necessity.

Sector Analysis

This contract falls within the broader 'Education and Research Services' sector, often intersecting with government contracting for specialized support. Universities frequently secure contracts for research, development, and labor support that leverage their academic expertise and infrastructure. The market for such services is competitive among academic institutions, but the sole-source nature of this award bypasses that competition. Comparable spending benchmarks would typically involve analyzing other large contracts awarded to universities for similar labor support functions across various federal agencies.

Small Business Impact

This contract does not appear to include any small business set-aside provisions, as indicated by 'ss': false and 'sb': false. The award to a large university suggests that the requirement is likely beyond the scope or capacity of typical small businesses. There is no explicit information regarding subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense contracting officers and the Washington Headquarters Services. As a Cost Plus Fixed Fee (CPFF) contract, rigorous oversight is crucial to monitor expenditures, ensure compliance with the fixed fee, and prevent cost overruns. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

University Research Support Contracts
Department of Defense Labor Services
Academic Institution Federal Awards
Cost Plus Fixed Fee Contracts
Sole Source Procurement

Risk Flags

Sole Source Justification
Cost Plus Fixed Fee Oversight
Geographic Cost Factors
Lack of Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.0 million to UNIVERSITY OF ALASKA FAIRBANKS. LABOR SUPPORT

Who is the contractor on this award?

The obligated recipient is UNIVERSITY OF ALASKA FAIRBANKS.

Which agency awarded this contract?

Awarding agency: Department of Defense (Washington Headquarters Services).

What is the total obligated amount?

The obligated amount is $62.0 million.

What is the period of performance?

Start: 2020-06-10. End: 2023-07-09.

What specific labor support services are being provided under this contract, and how do they align with the University of Alaska Fairbanks' core competencies?

The provided data indicates the contract is for 'LABOR SUPPORT' with the North American Industry Classification System (NAICS) code 611310, which corresponds to 'Colleges, Universities, and Professional Schools.' This suggests the services likely involve personnel with academic or specialized professional backgrounds, potentially including research assistance, administrative support for specific programs, technical expertise, or project management related to defense initiatives. The University of Alaska Fairbanks, as a large research institution, possesses the infrastructure and faculty expertise to provide such specialized labor. However, without a detailed Statement of Work (SOW), the precise nature of the services and their direct alignment with the university's core competencies remains unspecified. Further inquiry would be needed to understand if these services are extensions of existing research grants, operational support for defense-related projects hosted at the university, or unique personnel augmentation.

How was the 'sole-source' justification determined for this $62 million contract, and what alternatives were considered?

The data explicitly states the contract type as 'NOT COMPETED,' which in this context implies a sole-source award. Government agencies typically justify sole-source awards when only one responsible source is available or qualified to meet the requirement. Common justifications include unique capabilities, urgent needs where competition is impractical, or when a specific entity holds proprietary rights. For a $62 million contract awarded to the University of Alaska Fairbanks for labor support, the justification might stem from a unique research partnership, specialized facilities only available at that institution, or a requirement for personnel with specific academic credentials and security clearances that only individuals associated with the university could readily provide. Without the official justification document (e.g., a Justification for Other Than Full and Open Competition - JOFOC), it is impossible to detail the specific rationale or the alternatives that were considered and deemed unsuitable. This lack of transparency is a key area for further investigation.

What is the historical spending pattern for similar labor support contracts awarded by the Department of Defense to academic institutions?

The provided data offers a snapshot of a single contract. To assess historical spending patterns, a broader analysis of Department of Defense (DoD) contracts awarded to academic institutions for labor support is necessary. This would involve querying federal procurement databases (like FPDS or USASpending) for contracts with similar NAICS codes (e.g., 611310) and service descriptions, focusing on awards to universities over several fiscal years. Key metrics to examine would include the total dollar value of such contracts, the average contract duration, the prevalence of different contract types (e.g., CPFF, FFP), and the distribution of awards among different academic institutions. Understanding these patterns would help contextualize the $62 million award to the University of Alaska Fairbanks, indicating whether it is an outlier, a typical investment, or part of a growing trend in DoD reliance on academic expertise for labor support.

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

Cost Plus Fixed Fee (CPFF) contracts, while offering flexibility, carry inherent risks, especially for a $62 million award over approximately three years. The primary risk is cost overrun; the government agrees to pay all allowable costs incurred by the contractor, plus a fixed fee representing profit. If the contractor's costs exceed estimates, the government still pays those costs. This structure can incentivize contractors to incur higher costs, as their profit (the fixed fee) remains constant regardless of the actual cost incurred. Effective oversight is critical to scrutinize allowable costs, prevent inefficiencies, and ensure the contractor exercises prudent judgment. Scope creep is another significant risk; without tight management, the scope of work can expand, leading to increased costs without a corresponding adjustment to the fixed fee, potentially eroding the contractor's intended profit margin and increasing the government's overall expenditure. Robust monitoring of performance metrics and adherence to the Statement of Work are essential to mitigate these risks.

How does the geographic location (Alaska) influence the cost and feasibility of this labor support contract?

The geographic location in Alaska (ST: AK, SN: ALASKA) can significantly influence the cost and feasibility of this labor support contract. Alaska presents unique logistical challenges and often higher costs of living and doing business compared to the contiguous United States. This can translate into higher labor rates, increased travel expenses for personnel, and potentially higher indirect costs for the University of Alaska Fairbanks to operate and support staff in the region. Furthermore, the availability of specialized talent might be more limited in Alaska, potentially necessitating recruitment from outside the state, which adds further costs and complexity. The sole-source nature of the award might, in part, be influenced by the perceived difficulty or cost of attracting other institutions or contractors to operate effectively in such a remote and high-cost environment. Understanding these geographic factors is crucial for assessing the overall value and reasonableness of the contract's pricing.

Industry Classification

NAICS: Educational Services › Colleges, Universities, and Professional Schools › Colleges, Universities, and Professional Schools

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ003417R0003

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: University of Alaska Systems

Address: 3295 COLLEGE RD, FAIRBANKS, AK, 99709

Business Categories: Category Business, Educational Institution, Government, Higher Education, U.S. National Government, Not Designated a Small Business, Higher Education (Public), U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $78,832,833

Exercised Options: $65,622,400

Current Obligation: $62,044,650

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $27,324,753

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ003418D0027

IDV Type: IDC

Timeline