DoD's $66.5M contract with KBR Wyle Services for air transportation support lacked competition, raising value concerns

Contract Overview

Contract Amount: $66,522,235 ($66.5M)

Contractor: KBR Wyle Services, LLC

Awarding Agency: Department of Defense

Start Date: 2008-04-01

End Date: 2013-09-30

Contract Duration: 2,008 days

Daily Burn Rate: $33.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LABOR

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $66.5 million to KBR WYLE SERVICES, LLC for work described as: LABOR Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize higher spending without strict cost controls. 2. Lack of competition suggests potential for inflated pricing and reduced value for taxpayer dollars. 3. The long duration (5 years) and significant value indicate a substantial commitment of resources. 4. Performance context is limited without specific metrics on the 'Other Support Activities for Air Transportation' provided. 5. This contract falls within the broader Defense sector, specifically supporting air operations. 6. The absence of small business participation is noted, with no set-aside provisions. 7. Oversight effectiveness is unclear without details on performance reviews and audits.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the 'Other Support Activities for Air Transportation' description and the lack of competitive pricing. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can lead to higher costs if not managed rigorously. Without comparative data on similar support activities or detailed performance metrics, it's difficult to definitively assess if the $66.5 million represents a fair price for the services rendered over its five-year term. The absence of competition further complicates a value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating a sole-source or limited competition procurement. The specific justification for not competing the award is not provided in the data. A lack of competition typically leads to less price discovery and potentially higher costs for the government compared to an open market scenario. It also limits the opportunity for innovative solutions from a wider range of potential contractors.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as KBR WYLE SERVICES, LLC was likely the only or primary option considered.

Public Impact

The Department of the Navy benefits from specialized support activities for its air transportation operations. Services provided likely ensure the smooth functioning and maintenance of air logistics and infrastructure. The geographic impact is concentrated in Alabama (AL), where the contract was administered. Workforce implications include employment opportunities for personnel with expertise in air transportation support within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs and reduced value for taxpayer funds.
Cost-plus-fixed-fee contract type can incentivize increased spending if not closely monitored.
Limited transparency on specific performance metrics makes it difficult to assess effectiveness.
Absence of small business participation means missed opportunities for smaller enterprises.
The long contract duration could indicate a lack of readily available alternatives or a critical need.

Positive Signals

The contract was awarded to an established entity, KBR WYLE SERVICES, LLC, suggesting a degree of reliability.
The fixed fee component in the CPFF structure provides some cost certainty for the contractor's profit.
The contract duration implies a sustained need for these critical air transportation support services.
The award was made by the Department of the Navy, a major component of the Department of Defense.

Sector Analysis

This contract falls within the broader Defense sector, specifically supporting air transportation logistics and operations. The market for such specialized support services is often dominated by a few large, experienced contractors capable of meeting the stringent requirements of military operations. While specific market size data for 'Other Support Activities for Air Transportation' is not readily available, it represents a critical niche within the defense industrial base. Comparable spending benchmarks would typically involve analyzing other contracts for similar logistical and operational support within the DoD.

Small Business Impact

This contract does not appear to have included any small business set-aside provisions, as indicated by 'sb': false. Furthermore, there is no indication of subcontracting goals for small businesses. This suggests that the primary contractor, KBR WYLE SERVICES, LLC, was expected to perform the work directly or through larger partners, potentially limiting opportunities for the small business ecosystem within this specific procurement.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. However, as a Department of Defense contract, it would typically be subject to internal DoD oversight, contract performance reviews, and potentially audits by agencies like the Defense Contract Audit Agency (DCAA) or the Inspector General. Transparency is limited without public access to performance reports or audit findings. The effectiveness of accountability measures would depend on the rigor of these oversight processes.

Related Government Programs

Department of Defense Logistics Support Contracts
Air Mobility Command Services
Naval Air Systems Command Support
Defense-wide Logistics and Transportation Services
Base Operations Support Contracts

Risk Flags

Lack of Competition
Cost-Plus Contract Type
Limited Performance Transparency
No Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.5 million to KBR WYLE SERVICES, LLC. LABOR

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 Navy).

What is the total obligated amount?

The obligated amount is $66.5 million.

What is the period of performance?

Start: 2008-04-01. End: 2013-09-30.

What specific services were provided under this 'Other Support Activities for Air Transportation' contract?

The provided data classifies the contract under NAICS code 488190, 'Other Support Activities for Air Transportation.' While specific service details are not itemized, this typically encompasses a range of activities essential for air operations. These could include ground support, aircraft maintenance coordination, air traffic control support, logistical planning, cargo handling, passenger services, and facility management related to airfields and aviation infrastructure. The exact scope would be defined in the contract's statement of work, which is not included here. Given the 'NOT COMPETED' status and the duration, these services were likely critical and potentially unique or difficult to replicate by other vendors.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) structure is common for complex services where the scope may evolve or is difficult to define precisely upfront, such as research and development or specialized support. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government, as costs can fluctuate. However, it can be advantageous when risks are high or innovation is required. For routine, well-defined services, FFP is often preferred for better cost control. The choice of CPFF here suggests the services were deemed complex or uncertain, but it necessitates robust government oversight to manage costs effectively.

What are the potential risks associated with a 'NOT COMPETED' contract of this magnitude?

A 'NOT COMPETED' award, especially for a contract valued at $66.5 million over five years, carries several risks. The primary risk is the potential for paying a higher price than would be achieved through open competition, as the government loses the benefit of market forces driving down costs. There's also a risk of reduced innovation, as the incumbent contractor may have less incentive to propose novel or more efficient solutions. Furthermore, it can create a perception of favoritism or a lack of due diligence in seeking the best value. Without a competitive process, it's harder to ensure the contractor is performing optimally or that alternative, potentially better-suited vendors are not overlooked.

What does the contract's duration (2008-2013) suggest about the nature of the services and the contractor's performance?

The contract's five-year duration (April 1, 2008, to September 30, 2013) suggests that the 'Other Support Activities for Air Transportation' were considered essential and ongoing requirements for the Department of the Navy. Such long-term commitments often indicate services that are deeply integrated into operations, require specialized knowledge or facilities, or where transitioning to a new provider would be costly and disruptive. While duration alone doesn't guarantee performance, it implies a level of stability and continuity that the Navy sought. Without performance data, we cannot definitively assess the contractor's success, but the renewal or long-term nature suggests the services met a critical need.

How does this contract fit into the broader spending patterns for air transportation support within the Department of Defense?

This $66.5 million contract represents a significant, albeit specific, investment in air transportation support activities within the DoD. The Department of Defense relies heavily on robust air logistics for global operations, encompassing troop and cargo movement, aerial refueling, and base support. Spending in this category can fluctuate based on operational tempo, geopolitical events, and modernization efforts. While this single contract is substantial, it's part of a much larger ecosystem of aviation-related spending, including aircraft procurement, maintenance, fuel, and personnel. Analyzing this contract in isolation provides limited insight into overall trends, but it highlights the reliance on specialized support contractors for critical functions.

Industry Classification

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

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0042108R0028

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: KBR, Inc.

Address: 345 BOB HEATH DR, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $72,099,162

Exercised Options: $72,099,162

Current Obligation: $66,522,235

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline