DoD's $36.4M Jacobs Technology contract for tactical air range upgrades shows fair value with potential for cost overruns

Contract Overview

Contract Amount: $36,443,761 ($36.4M)

Contractor: Jacobs Technology Inc

Awarding Agency: Department of Defense

Start Date: 2007-07-09

End Date: 2012-12-31

Contract Duration: 2,002 days

Daily Burn Rate: $18.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: TACTICAL AIR RANGE INTEGRATION FACILITY UPGRADES

Place of Performance

Location: RIDGECREST, KERN County, CALIFORNIA, 93555

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $36.4 million to JACOBS TECHNOLOGY INC for work described as: TACTICAL AIR RANGE INTEGRATION FACILITY UPGRADES Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. The cost-plus-award-fee (CPAF) structure introduces performance incentives but also carries inherent risk of cost escalation. 3. The contract duration of over 5 years indicates a significant, long-term project. 4. Engineering services are critical for defense infrastructure, but require careful oversight to manage costs. 5. The award was a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The project's focus on tactical air range upgrades points to a specialized defense need.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns and comparisons to similar range upgrade projects. The Cost Plus Award Fee (CPAF) structure, while incentivizing performance, can lead to higher final costs than fixed-price contracts if not managed diligently. The total award amount of $36.4 million over five years suggests a moderate annual spend, but the true value-for-money depends heavily on the achieved performance and the necessity of the upgrades.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally expected to drive down prices and ensure fair market value. The presence of multiple bidders suggests a healthy market for these specialized engineering services, allowing the government to select the most capable and cost-effective solution.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it fosters a competitive environment that can lead to lower prices and better quality services, maximizing the return on investment for public funds.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who will utilize the upgraded tactical air ranges. The services delivered include engineering, design, and potentially construction management for facility upgrades. The geographic impact is concentrated in California, where the tactical air range is located. Workforce implications include employment for engineers, project managers, and potentially construction labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee (CPAF) contract type introduces a risk of cost overruns if performance targets are not carefully managed and if the contractor's costs exceed initial estimates.
The long duration of the contract (over 5 years) increases the potential for scope creep or unforeseen challenges that could impact the final cost and timeline.
The specific nature of 'tactical air range upgrades' may involve specialized equipment and expertise, potentially limiting the pool of qualified contractors and increasing costs.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process that likely secured competitive pricing.
The contract aims to upgrade critical defense infrastructure, which is essential for maintaining operational readiness and training effectiveness.
The use of an award fee mechanism incentivizes the contractor to achieve high levels of performance, potentially leading to superior outcomes.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense infrastructure. The market for defense engineering services is substantial, driven by the continuous need for modernization and maintenance of military facilities and equipment. Comparable spending benchmarks would involve looking at other large-scale infrastructure upgrade projects within the Department of Defense, particularly those related to training and testing ranges.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of engineering services for defense infrastructure, it is possible that large, experienced firms like Jacobs Technology Inc. are best positioned to meet the requirements. Subcontracting opportunities for small businesses may exist, but would depend on the prime contractor's strategy and the specific needs of the project.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Award Fee structure necessitates close monitoring of costs and performance metrics to ensure accountability and prevent excessive spending. Transparency would be enhanced through regular reporting requirements and potential audits.

Related Government Programs

Department of Defense Infrastructure Modernization Programs
Military Training Range Development
Defense Engineering Services Contracts
Tactical Operations Support Facilities

Risk Flags

Cost Overrun Risk (CPAF)
Long Contract Duration
Specialized Service Requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.4 million to JACOBS TECHNOLOGY INC. TACTICAL AIR RANGE INTEGRATION FACILITY UPGRADES

Who is the contractor on this award?

The obligated recipient is JACOBS TECHNOLOGY 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 $36.4 million.

What is the period of performance?

Start: 2007-07-09. End: 2012-12-31.

What is the track record of Jacobs Technology Inc. on similar defense infrastructure contracts?

Jacobs Technology Inc. has a significant history of performing large-scale engineering and construction projects for the Department of Defense and other government agencies. Their portfolio often includes complex infrastructure upgrades, facility management, and technical support services. While specific performance data for similar tactical air range upgrades would require deeper analysis of past contract awards and performance reviews, Jacobs is generally recognized as a major player in this sector. Their experience suggests a capability to manage complex projects, but as with any large contractor, past performance can vary. A review of their contract history, including any past performance evaluations or disputes, would provide a more definitive assessment of their reliability and effectiveness in delivering similar projects on time and within budget.

How does the $36.4 million award compare to the typical cost of tactical air range upgrades?

Directly comparing the $36.4 million award to a 'typical' cost for tactical air range upgrades is difficult without specific project scope and location details. The cost of such upgrades can vary dramatically based on the extent of modernization required, the specific technologies being integrated, the size and complexity of the range, and the prevailing labor and material costs in the region. However, for a project spanning over five years and involving significant engineering services, $36.4 million represents a substantial investment. To benchmark this value effectively, one would need to identify comparable projects within the DoD or allied nations, analyze their scope, duration, and final costs, and adjust for inflation and specific project complexities. Without such detailed comparative data, it's challenging to definitively state whether this award represents excellent, fair, or questionable value.

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

The primary risk with a Cost Plus Award Fee (CPAF) contract is the potential for cost overruns. Unlike fixed-price contracts, CPAF allows the contractor to recover all allowable costs incurred, plus a fee that is composed of a base fee (which may be fixed or a percentage of costs) and an award fee. The award fee is contingent upon the government's assessment of the contractor's performance against pre-defined criteria. The risk lies in the 'cost plus' aspect; if costs escalate due to inefficiencies, poor management, or unforeseen circumstances, the total contract price can increase significantly. While the award fee mechanism is intended to incentivize performance and efficiency, it can also lead to disputes over performance ratings and fee determination. For taxpayers, this means the final cost is less predictable than with a fixed-price contract, requiring robust government oversight to manage costs effectively and ensure the award fee is earned only for exceptional performance.

How effective are delivery orders under IDIQ contracts for managing large infrastructure projects?

Delivery orders (DOs) under Indefinite-Delivery/Indefinite-Quantity (IDIQ) contracts can be an effective tool for managing large, phased, or evolving infrastructure projects. IDIQs establish a framework agreement with pre-negotiated terms, conditions, and pricing structures, allowing the government to issue DOs for specific tasks or phases as needed. This provides flexibility to adapt to changing requirements and procure services incrementally. For infrastructure projects, this can mean ordering specific design phases, construction elements, or upgrade packages over time. The effectiveness hinges on the clarity of the base IDIQ contract, the fairness of the ordering process (especially if multiple contractors are eligible), and the government's ability to accurately define the scope for each DO. When managed well, DOs can streamline procurement and provide better value by allowing competition for individual task orders or by leveraging established relationships and pricing.

What is the historical spending pattern for tactical air range upgrades within the Department of Defense?

Historical spending patterns for tactical air range upgrades within the Department of Defense are not publicly aggregated into a single, easily accessible dataset. Such upgrades are typically funded through specific military construction (MILCON) appropriations, operations and maintenance (O&M) funds, or research, development, test, and evaluation (RDT&E) budgets, depending on the nature of the upgrade. Spending can fluctuate significantly year-to-year based on strategic priorities, aging infrastructure needs, and the introduction of new training requirements or technologies. To analyze historical spending, one would need to examine budget documents, congressional appropriations, and individual contract awards related to specific ranges or types of upgrades across different military branches (Army, Navy, Air Force, Marines). This would likely reveal a pattern of periodic, substantial investments rather than consistent, predictable annual spending.

What are the implications of awarding engineering services for defense infrastructure under 'full and open competition'?

Awarding engineering services for defense infrastructure under 'full and open competition' signifies that the solicitation was made available to all responsible sources, and any responsible source was permitted to submit a proposal. This approach is generally favored as it maximizes the potential for competition, theoretically leading to the best value for the government in terms of price, technical capability, and overall performance. It allows the agency to cast a wide net, potentially uncovering innovative solutions or more cost-effective approaches from a diverse range of contractors. For taxpayers, this means a greater likelihood that the contract was awarded based on merit and competitive pricing, rather than through restricted procedures that might limit options or inflate costs. However, the effectiveness of full and open competition depends on the clarity of the solicitation requirements and the government's ability to evaluate proposals objectively.

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: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)

Address: 1030 TITAN COURT, FORT WALTON BEACH, FL, 32547

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

Financial Breakdown

Contract Ceiling: $36,504,747

Exercised Options: $36,504,747

Current Obligation: $36,443,761

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6893604D0019

IDV Type: IDC

Timeline