DoD's $54M LTM Solutions Support Services contract awarded to IAP Worldwide Services, Inc. shows fair value with 4 bidders

Contract Overview

Contract Amount: $54,015,754 ($54.0M)

Contractor: IAP Worldwide Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-08-31

End Date: 2016-03-25

Contract Duration: 1,302 days

Daily Burn Rate: $41.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LAST TACTICAL MILE (LTM) SOLUTIONS SUPPORT SERVICES

Place of Performance

Location: CAPE CANAVERAL, BREVARD County, FLORIDA, 32920

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $54.0 million to IAP WORLDWIDE SERVICES, INC. for work described as: LAST TACTICAL MILE (LTM) SOLUTIONS SUPPORT SERVICES Key points: 1. The contract's value appears reasonable given the scope of engineering services provided. 2. Full and open competition suggests a competitive bidding environment, potentially leading to better pricing. 3. The duration of the contract (over 3 years) indicates a need for sustained support. 4. Performance was managed by the Defense Contract Management Agency, a standard oversight body. 5. The contract falls within the Engineering Services sector, supporting defense operations. 6. The award was a delivery order, suggesting it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: fair

The total award amount of approximately $54 million over a period of roughly 3.5 years suggests a moderate annual spend. Benchmarking against similar large-scale engineering support contracts for defense operations is challenging without more specific service details. However, the presence of four bidders in a full and open competition indicates a degree of market interest and potential for price discovery, which generally supports a fair assessment of value. The cost-plus-fixed-fee (CPFF) contract type means the government pays the contractor's actual costs plus a fixed fee, which can be efficient if costs are well-managed and the fixed fee is reasonable.

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 bids. Four bids were received, indicating a healthy level of interest from potential contractors in this market segment. The presence of multiple bidders generally fosters price competition, which can lead to more favorable terms for the government compared to sole-source or limited competition scenarios. The agency's decision to use full and open competition suggests they sought the best possible value through a broad market solicitation.

Taxpayer Impact: The use of full and open competition with four bidders is beneficial for taxpayers as it increases the likelihood of obtaining services at a competitive price, maximizing the return on investment for public funds.

Public Impact

The primary beneficiaries are the Department of Defense units requiring tactical mile solutions support services. The services delivered likely include engineering, logistics, and operational support critical for defense missions. The contract was awarded to a Florida-based entity, suggesting potential workforce implications within that state. The geographic impact is likely global, supporting deployed military operations wherever needed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not closely monitored.
The specific nature of 'tactical mile solutions' is broad and could encompass a wide range of services, making precise value assessment difficult without further detail.
Long contract durations, while sometimes necessary, can reduce flexibility to adapt to changing requirements or market conditions.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Multiple bidders (4) participated, suggesting market interest and potential for competitive pricing.
The contract was managed by the Defense Contract Management Agency, a specialized oversight body.

Sector Analysis

The Engineering Services sector (NAICS 541330) is a critical component of the defense industrial base, providing specialized expertise for complex military requirements. This contract for 'Last Tactical Mile (LTM) Solutions Support Services' likely falls within this domain, addressing the final, often challenging, stages of delivering support to operational forces. The total spending in this sector for defense is substantial, with numerous contracts awarded annually for a variety of engineering and technical support functions. This specific contract represents a portion of the broader DoD spending aimed at ensuring operational readiness and effectiveness.

Small Business Impact

There is no indication that this contract included a small business set-aside, as the 'ss' and 'sb' fields are false. This suggests that the competition was open to all responsible sources, including large businesses. Consequently, the direct impact on small businesses through set-asides is likely minimal. However, IAP Worldwide Services, Inc., as a large prime contractor, may engage small businesses as subcontractors to fulfill specific aspects of the contract, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract was provided by the Defense Contract Management Agency (DCMA), a component of the Department of Defense responsible for ensuring that contracted goods and services meet quality and schedule requirements. The contract type (Cost Plus Fixed Fee) necessitates robust financial oversight to ensure costs are reasonable and allowable. Transparency is generally maintained through contract reporting mechanisms, and accountability is enforced through contract performance clauses and potential remedies for non-compliance. Inspector General jurisdiction would apply if fraud or waste were suspected.

Related Government Programs

Defense Logistics Agency Support Contracts
Military Engineering Services
Tactical Operations Support
Global Support Services Contracts

Risk Flags

Contract duration exceeds 3 years
Cost-Plus-Fixed-Fee contract type requires diligent oversight
Scope of 'tactical mile solutions' is broad, potentially impacting performance clarity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.0 million to IAP WORLDWIDE SERVICES, INC.. LAST TACTICAL MILE (LTM) SOLUTIONS SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is IAP WORLDWIDE SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $54.0 million.

What is the period of performance?

Start: 2012-08-31. End: 2016-03-25.

What is the typical profit margin for Cost Plus Fixed Fee (CPFF) contracts in defense engineering services?

Profit margins for Cost Plus Fixed Fee (CPFF) contracts in defense engineering services can vary significantly based on the complexity of the work, the level of risk involved, and the specific terms negotiated. Generally, the 'fixed fee' component represents the contractor's profit. For CPFF contracts, this fee is negotiated upfront and remains constant regardless of the actual costs incurred by the contractor, provided those costs are allowable and reasonable. Industry benchmarks suggest that fixed fees for such services often range from 5% to 15% of the estimated cost. However, this is a broad range, and specific contract negotiations, competitive pressures, and the perceived risk by both parties can influence the final fee. The Defense Contract Audit Agency (DCAA) and other oversight bodies scrutinize the reasonableness of these fees during contract audits.

How does the $54 million total award compare to other similar 'Last Tactical Mile' support contracts?

Direct comparison of the $54 million total award for 'Last Tactical Mile (LTM) Solutions Support Services' to other similar contracts is difficult without more granular data on the specific services rendered and the contract duration. LTM support can encompass a wide array of activities, from logistics and transportation to technical maintenance and operational readiness support in austere environments. The duration of this contract (approximately 3.5 years) suggests a sustained need. Larger, more complex global support contracts can easily exceed hundreds of millions or even billions of dollars. Conversely, smaller, geographically limited LTM contracts might be in the single-digit millions. The $54 million figure suggests a significant, but not exceptionally large, contract for ongoing support services within a specific operational theater or for a defined set of capabilities.

What are the key performance indicators (KPIs) typically used to evaluate contractors for LTM support services?

Key Performance Indicators (KPIs) for Last Tactical Mile (LTM) support services contracts are designed to measure the contractor's effectiveness in delivering critical support under potentially challenging conditions. Common KPIs often include metrics related to delivery timeliness (e.g., on-time delivery rates for supplies or services), operational availability of equipment or systems supported, response times for maintenance or repair requests, mission success rates (if directly attributable to the support provided), safety incident rates, and adherence to budget or cost control measures. For CPFF contracts, cost efficiency and effective resource management are also crucial performance aspects. The Defense Contract Management Agency (DCMA) would typically monitor these KPIs to ensure the contractor meets contractual obligations and provides value for money.

What is the track record of IAP Worldwide Services, Inc. in fulfilling large defense support contracts?

IAP Worldwide Services, Inc. has a substantial history of performing large-scale support services contracts for the U.S. Department of Defense and other government agencies, often in complex and remote locations. They have been involved in providing aviation, logistics, base operations, and facilities support, among other services. Their track record includes managing significant budgets and workforces across various global theaters. While specific performance details for every contract are not publicly available, their continued success in winning and executing large contracts suggests a generally positive performance history. However, like any large contractor, they may have faced performance challenges or contract disputes on specific projects, which are not always detailed in public summaries.

How has spending on engineering services for defense operations evolved over the past decade?

Spending on engineering services for defense operations has generally remained a significant portion of the Department of Defense's budget over the past decade, reflecting the complexity and technological advancement of modern military systems. While overall defense budgets fluctuate based on geopolitical events and national priorities, the need for specialized engineering expertise to design, develop, maintain, and upgrade platforms and systems remains constant. Trends have shown an increasing emphasis on areas like cybersecurity, artificial intelligence, advanced materials, and space systems, requiring highly specialized engineering support. Furthermore, there's a continuous push for efficiency and cost-effectiveness, leading to evolving contract structures and a focus on performance-based metrics. The total dollar amount spent annually on engineering services can range widely, often in the tens of billions of dollars across all branches of the military.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: IAP Global Services, LLC (UEI: 079492183)

Address: 7315 N ATLANTIC AVE, CAPE CANAVERAL, FL, 32920

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

Financial Breakdown

Contract Ceiling: $85,789,498

Exercised Options: $85,076,074

Current Obligation: $54,015,754

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T10DD416

IDV Type: IDC

Timeline