Department of Defense awards $31.6M for logistics support, highlighting long-term service needs

Contract Overview

Contract Amount: $31,592,331 ($31.6M)

Contractor: Brown & Root Services

Awarding Agency: Department of Defense

Start Date: 1999-06-24

End Date: 2007-09-30

Contract Duration: 3,020 days

Daily Burn Rate: $10.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 199909!2100!0256!CA78 !TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!*!0033 !19990624!19990930!177582855!010810893!964409007!N!0BY16!BROWN & ROOT SERVICES CORPORAT!4100 CLINTON DR !HOUSTON !TX!77020!* !* !MK!* !* !MACEDONIA !0001!+000002038608!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !8742!5!B!S!*!B!B!*!A !Y!R!2!002!B!* !Z!N!Z!* !* !N!M!*!*!*!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!

Plain-Language Summary

Department of Defense obligated $31.6 million to BROWN & ROOT SERVICES for work described as: 199909!2100!0256!CA78 !TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!*!0033 !19990624!19990930!177582855!010810893!964409007!N!0BY16!BROWN & ROOT SERVICES CORPORAT!4100 CLINTON DR !HOUSTON !TX!77020!* !* !MK!* !* … Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Award Fee, which incentivizes contractor performance. 3. Service acquisition for logistics support indicates a focus on operational readiness and sustainment. 4. The duration of the contract (over 8 years) points to a significant, long-term requirement. 5. The awardee, Brown & Root Services, has a substantial presence in government contracting. 6. The contract value of $31.6M over its term represents a considerable investment in support services.

Value Assessment

Rating: good

The contract value of $31.6 million over more than 8 years averages to approximately $3.95 million per year. This figure needs to be benchmarked against similar logistics support contracts awarded by the Department of Defense or other agencies to fully assess value for money. The Cost Plus Award Fee (CPAF) structure allows for performance-based incentives, which can drive efficiency and value if managed effectively. Without specific performance metrics and award fee payouts, a precise value assessment is challenging, but the competitive nature of the award is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this requirement. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower costs for the government. The specific details of the bidding process and the evaluation criteria would further inform the assessment of competition effectiveness.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market where contractors strive to offer competitive pricing and superior services to win awards. This mechanism helps prevent inflated costs and ensures that government funds are used more efficiently.

Public Impact

The primary beneficiaries are likely military personnel and operations requiring logistical support, ensuring readiness and effectiveness. Services delivered include comprehensive logistics support, crucial for maintaining operational capabilities. The geographic impact is likely tied to the operational areas of the Department of Defense, potentially global. Workforce implications include employment opportunities for individuals with logistics and support expertise, both within the contractor's organization and potentially in related support industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if not rigorously managed.
Long contract duration could lead to complacency or reduced innovation if performance incentives are not strongly enforced.
Dependence on a single contractor for critical logistics functions can create vulnerability if the contractor faces operational issues.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible bidding process.
Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
The contract addresses a critical need for sustained logistics support, vital for military operations.
The contractor, Brown & Root Services, has extensive experience in large-scale support services.

Sector Analysis

This contract falls within the broader Defense sector, specifically focusing on logistics and support services. The market for defense logistics is substantial, driven by the global operational needs of the U.S. military. Companies like Brown & Root Services are key players in this market, providing essential services that enable military readiness. Comparable spending benchmarks would involve analyzing other large-scale logistics support contracts awarded to prime contractors by the Department of Defense, often measured in annual spending or total contract value over the period of performance.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. Given the scale and nature of logistics support services, it is common for prime contractors to utilize a network of subcontractors, which may include small businesses. However, without explicit information on subcontracting goals or achievements, the direct impact on the small business ecosystem remains unclear. Further analysis would be needed to determine if small businesses were actively engaged in supporting this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of the Army, under the Department of Defense) through contract officers and administrative personnel. Performance monitoring, financial audits, and compliance checks are standard oversight mechanisms. Transparency is generally maintained through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Defense Logistics Agency (DLA) Operations
Military Sealift Command Contracts
Base Operations Support (BOS) Contracts
Expeditionary Logistics Support
Global Force Management Support

Risk Flags

Long contract duration may indicate a stable, long-term need but also potential for vendor lock-in.
Cost Plus Award Fee contracts require diligent oversight to ensure costs remain reasonable and performance targets are met.
The number of bidders (two) suggests moderate competition; further analysis could explore why more bidders did not participate.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.6 million to BROWN & ROOT SERVICES. 199909!2100!0256!CA78 !TRANSATLANTIC PROGRAM CENTER !DACA7899D0003 !A!*!0033 !19990624!19990930!177582855!010810893!964409007!N!0BY16!BROWN & ROOT SERVICES CORPORAT!4100 CLINTON DR !HOUSTON !TX!77020!* !* !MK!* !* !MACEDONIA !0001!+000002038608!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !8742!5!B!S!*!B!B!*!A !Y!R!2!0

Who is the contractor on this award?

The obligated recipient is BROWN & ROOT SERVICES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $31.6 million.

What is the period of performance?

Start: 1999-06-24. End: 2007-09-30.

What is the historical spending pattern for logistics support services by the Department of Defense over the last decade?

The Department of Defense (DoD) consistently allocates significant portions of its budget to logistics and support services, often totaling tens of billions of dollars annually. Historical data from sources like the Federal Procurement Data System (FPDS) reveals a trend of substantial and often increasing investment in these areas, driven by global operational demands, modernization efforts, and the need for efficient supply chain management. Spending fluctuates based on geopolitical events, troop deployments, and strategic priorities. For instance, periods of heightened conflict have seen surges in demand for expeditionary logistics, while peacetime operations focus more on sustainment and readiness. Analyzing trends requires looking at contract awards across various service types, including transportation, maintenance, supply chain management, and base operations support, often awarded through multiple contract vehicles and to a wide array of large and small businesses.

How does the performance of Brown & Root Services on similar government contracts compare to industry benchmarks?

Brown & Root Services, now part of KBR, has a long and extensive history of performing large-scale government contracts, particularly in logistics, base operations, and engineering services. Benchmarking their performance requires a detailed review of past contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), on-time delivery rates, cost control metrics, and any instances of disputes or contract modifications. Generally, companies of this size and experience tend to have a mixed record, with many successful large-scale operations alongside occasional challenges related to scope creep, cost overruns, or performance issues on complex projects. A comprehensive assessment would involve analyzing specific contract histories, looking for patterns in performance ratings, and comparing them against the average ratings for similar contract types and agencies within the federal government.

What are the key performance indicators (KPIs) typically associated with logistics support services contracts of this nature?

Key performance indicators (KPIs) for logistics support services contracts are designed to measure efficiency, reliability, and cost-effectiveness. Common KPIs include on-time delivery rates for supplies and equipment, inventory accuracy, response times for maintenance and repair services, transportation efficiency (e.g., cost per mile, transit time), personnel readiness rates, and compliance with safety and environmental regulations. For Cost Plus Award Fee (CPAF) contracts, these KPIs are often directly tied to the criteria used to determine the award fee. The government establishes specific targets for each KPI, and the contractor's achievement against these targets dictates the portion of the award fee they receive. Effective KPIs ensure that the contractor is meeting the government's operational needs while incentivizing continuous improvement and cost control.

What is the typical profit margin for Cost Plus Award Fee (CPAF) contracts in the defense logistics sector?

Profit margins for Cost Plus Award Fee (CPAF) contracts in the defense logistics sector can vary significantly based on the complexity of the services, the level of risk involved, and the specific performance incentives established. Generally, CPAF contracts aim to provide a reasonable base fee (often a percentage of estimated costs) plus an award fee based on performance against pre-defined metrics. The total potential profit (base fee plus maximum award fee) is typically capped. While exact figures are proprietary and depend on the specific contract negotiation, industry analyses suggest that total profit potential for CPAF contracts often ranges from 8% to 15% of total contract costs, with the award fee component providing upside for exceptional performance. This structure is intended to balance contractor incentive with government oversight and cost control.

How has the role of private contractors in military logistics evolved since the late 1990s?

The role of private contractors in military logistics has expanded dramatically since the late 1990s. Initially, contractors primarily supported fixed military bases with services like food, maintenance, and transportation. However, driven by the demands of prolonged conflicts in Iraq and Afghanistan, the scope broadened significantly to include complex, high-risk functions such as convoy security, intelligence analysis, facility management in austere environments, and even direct support to combat operations. This expansion was often fueled by a desire for specialized skills, flexibility, and a way to augment military personnel numbers without increasing end-strength. While offering significant advantages in agility and expertise, this increased reliance has also raised concerns about oversight, accountability, cost, and the blurring lines between military and civilian roles.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 4100 CLINTON DR, HOUSTON, TX, 77020

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DACA7899D0003

IDV Type: IDC

Timeline