DOI's $72M EROS Data Center Technical Support Contract Awarded to KBR Wyle Services, LLC

Contract Overview

Contract Amount: $72,110,793 ($72.1M)

Contractor: KBR Wyle Services, LLC

Awarding Agency: Department of the Interior

Start Date: 2008-04-01

End Date: 2010-07-31

Contract Duration: 851 days

Daily Burn Rate: $84.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: TECHNICAL SUPPORT SERVICES CONTRACT (TSSC) FOR EROS DATA CENTER, SIOUX FALLS, SD

Place of Performance

Location: SIOUX FALLS, MINNEHAHA County, SOUTH DAKOTA, 57198

State: South Dakota Government Spending

Plain-Language Summary

Department of the Interior obligated $72.1 million to KBR WYLE SERVICES, LLC for work described as: TECHNICAL SUPPORT SERVICES CONTRACT (TSSC) FOR EROS DATA CENTER, SIOUX FALLS, SD Key points: 1. Contract value of $72.1M over 2.7 years suggests a significant investment in data center operations. 2. Awarded via full and open competition, indicating a broad market search for qualified bidders. 3. The contract type (Cost Plus Award Fee) allows for performance-based incentives, potentially driving efficiency. 4. The U.S. Geological Survey (USGS) relies on these services for critical Earth observation data. 5. The geographic location in Sioux Falls, SD, may influence local economic and workforce impacts. 6. The contractor, KBR Wyle Services, LLC, has a substantial presence in government contracting.

Value Assessment

Rating: good

The contract's value of approximately $72.1 million over 851 days (roughly 2.7 years) translates to an average annual spend of about $26.7 million. Benchmarking this against similar large-scale IT infrastructure support contracts is challenging without more specific service details. However, the Cost Plus Award Fee (CPAF) structure suggests a focus on achieving specific performance targets, which can be a good indicator of value if well-managed. The pricing appears reasonable for the scope of supporting a major data center like EROS, which handles critical Earth observation data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 5 bidders indicates a competitive environment, which is generally favorable for price discovery and innovation. The level of competition suggests that the government likely received multiple proposals, allowing for a thorough evaluation of technical capabilities and pricing. This approach aims to ensure the best value is obtained for the taxpayer.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing, as contractors vie for the award. This benefits taxpayers by potentially lowering costs and ensuring the government secures services at a fair market value.

Public Impact

The primary beneficiaries are the U.S. Geological Survey (USGS) and its mission to provide data on the Earth's resources and environment. Services delivered include essential technical support for the EROS Data Center, ensuring the integrity and accessibility of vast amounts of geospatial data. The geographic impact is centered in Sioux Falls, South Dakota, where the EROS Data Center is located, potentially supporting local jobs and the regional economy. Workforce implications include employment opportunities for technical specialists, IT professionals, and support staff both directly with the contractor and indirectly through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance metrics are not tightly managed.
Dependence on a single contractor for critical data center operations introduces risk if performance falters or the contractor faces financial instability.
The duration of the contract (over 2 years) means that technological advancements may outpace the contracted services if not regularly reviewed and updated.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
The Cost Plus Award Fee structure incentivizes contractor performance, which can lead to higher quality service delivery.
The contractor, KBR Wyle Services, LLC, is an established entity with significant experience in government services, implying a degree of reliability.
The contract supports the critical mission of the EROS Data Center, ensuring the continuity of vital Earth science data.

Sector Analysis

This contract falls within the IT and Engineering Services sector, specifically supporting critical infrastructure for data management and processing. The EROS Data Center is a key facility for the U.S. Geological Survey, housing and processing vast amounts of Earth observation data. The market for such specialized technical support services is competitive, with numerous firms capable of providing IT infrastructure management, data handling, and engineering support. Comparable spending benchmarks would likely be found in contracts supporting other large government data centers or high-performance computing facilities.

Small Business Impact

This contract was awarded as a full and open competition and does not indicate any specific small business set-aside. Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, KBR Wyle Services, LLC, may engage small businesses as subcontractors to fulfill portions of the contract requirements. The extent of subcontracting to small businesses would depend on the contractor's strategy and the specific needs of the EROS Data Center's technical support services.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Geological Survey (USGS) contracting officers and program managers. They are responsible for monitoring contractor performance against the contract requirements and award fee criteria. Transparency is facilitated through contract awards databases and reporting requirements. While specific Inspector General (IG) jurisdiction isn't detailed here, the Department of the Interior's Office of Inspector General typically oversees federal spending within the department to ensure accountability and prevent fraud, waste, and abuse.

Related Government Programs

USGS Data Management Contracts
Federal Data Center Operations Support
Geospatial Information Services
IT Infrastructure Support Services
Cost Plus Award Fee Contracts

Risk Flags

Cost Plus Award Fee contract type requires careful monitoring to ensure cost efficiency.
Dependence on a single contractor for critical infrastructure support.
Potential for performance gaps if award fee criteria are not precisely defined and measured.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $72.1 million to KBR WYLE SERVICES, LLC. TECHNICAL SUPPORT SERVICES CONTRACT (TSSC) FOR EROS DATA CENTER, SIOUX FALLS, SD

Who is the contractor on this award?

The obligated recipient is KBR WYLE SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (U.S. Geological Survey).

What is the total obligated amount?

The obligated amount is $72.1 million.

What is the period of performance?

Start: 2008-04-01. End: 2010-07-31.

What is the track record of KBR Wyle Services, LLC in supporting similar federal data center operations?

KBR Wyle Services, LLC, a subsidiary of KBR, Inc., has a substantial history of providing a wide range of services to U.S. government agencies, including extensive support for military, intelligence, and civilian operations. Their experience often encompasses complex logistics, engineering, IT services, and facility management. While specific details on their past performance at the EROS Data Center are not provided in this data snippet, their broader portfolio suggests they possess the capabilities to manage large-scale technical support contracts. Government contract databases and past performance reviews would offer more granular insights into their specific successes and challenges in similar data center environments, including their ability to meet performance metrics and manage costs effectively under various contract types.

How does the annual cost of this contract compare to other federal data center support contracts?

The annual cost of this contract, averaging approximately $26.7 million ($72.1M / 2.7 years), needs to be contextualized by the specific scope and scale of the EROS Data Center's operations. Supporting a facility that handles critical Earth observation data likely involves significant infrastructure, high availability requirements, and specialized technical expertise. Without detailed service level agreements (SLAs) and a breakdown of costs (personnel, hardware, software, maintenance), direct comparison is difficult. However, annual spending for large federal data center operations and maintenance can range from tens to hundreds of millions of dollars, depending on size, criticality, and technological complexity. This contract appears to be within a moderate range for supporting a significant, specialized federal data center.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for technical support?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract, like the one for the EROS Data Center, revolve around cost control and performance definition. For the government, there's a risk that costs could escalate beyond initial projections if the contractor's incurred costs are not meticulously tracked and justified. Defining objective and measurable award fee criteria can also be challenging; poorly defined metrics may lead to disputes or the contractor receiving awards for less-than-optimal performance. Conversely, the contractor bears the risk of not achieving the performance targets necessary to earn the award fee, impacting their overall profit margin. Effective oversight and clear communication are crucial to mitigate these risks and ensure value for the taxpayer.

How critical is the EROS Data Center's function, and what is the impact of service disruptions?

The EROS Data Center (Earth Resources Observation and Science) is critically important as it archives, manages, and distributes a vast array of Earth science data, including satellite imagery and aerial photography. This data is fundamental for research in climate change, land use, natural resource management, disaster response, and national security. Service disruptions at EROS could have significant cascading impacts, hindering scientific research, delaying critical environmental monitoring, and impeding disaster assessment and response efforts. Ensuring the continuous, reliable operation of the data center through robust technical support, as provided under this contract, is therefore paramount to maintaining these vital scientific and governmental functions.

What does the number of bidders (5) suggest about the market for EROS Data Center technical support?

The fact that five bidders submitted proposals for this technical support contract suggests a moderately competitive market for EROS Data Center services. While not an exceptionally large number, it indicates that multiple companies possess the necessary technical capabilities and interest to pursue this type of government contract. This level of competition is generally sufficient to encourage fair pricing and allow the government to select a technically superior offer. A higher number of bidders might indicate even greater competition and potentially lower prices, while fewer bidders could suggest market concentration or higher barriers to entry for potential competitors. The specific nature of the EROS Data Center's specialized requirements likely influences the pool of qualified bidders.

How has federal spending on IT support services for data centers evolved over the past decade?

Federal spending on IT support services for data centers has seen significant evolution over the past decade, driven by technological advancements, cloud computing adoption, and efforts towards consolidation and modernization. Initially, spending was heavily focused on maintaining on-premises infrastructure, including hardware, software, and personnel for operations and maintenance. As cloud services (IaaS, PaaS, SaaS) matured, agencies began shifting workloads to cloud environments, leading to a decrease in spending on traditional data center infrastructure management for some functions, but an increase in cloud management and security services. There's also been a push for data center consolidation to reduce costs and improve efficiency. Overall, while the nature of spending has changed, the total federal investment in managing and securing vast amounts of data remains substantial, with a growing emphasis on cybersecurity and data analytics capabilities.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 08HQSS0008

Offers Received: 5

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: KBR, Inc. (UEI: 784072626)

Address: 7701 GREENBELT RD 400, GREENBELT, MD, 20770

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

Financial Breakdown

Contract Ceiling: $139,593,519

Exercised Options: $74,390,529

Current Obligation: $72,110,793

Actual Outlays: $-2,358

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline