Army's $1.33B Logistics Contract for Iraq Operations Awarded to KBR Services, LLC

Contract Overview

Contract Amount: $300,725,090 ($300.7M)

Contractor: KBR Services, LLC

Awarding Agency: Department of Defense

Start Date: 2003-08-29

End Date: 2012-09-30

Contract Duration: 3,320 days

Daily Burn Rate: $90.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: 200311!001400!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0057 !20030829!20120131!133468954!133468954!133468954!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!* !* !IZ!* !* !IRAQ !+000088938704!N!N!000000000000!AD23!RDTE/SERVICES-ADV TECH DEV !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !561210!E! !5!B!S! ! ! !99990909!B! ! !A! !A!U!R!2!003!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $300.7 million to KBR SERVICES, LLC for work described as: 200311!001400!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0057 !20030829!20120131!133468954!133468954!133468954!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!* !* !IZ!* !* … Key points: 1. Contract awarded for extensive logistics and support services in Iraq. 2. Significant duration of nearly 9 years indicates a long-term operational need. 3. The contract's value suggests a substantial commitment to supporting military efforts in the region. 4. Awarded under full and open competition, implying a robust bidding process. 5. The 'Cost Plus Award Fee' structure incentivizes performance but can lead to higher costs. 6. Services encompass a broad range of advanced technology development and general services.

Value Assessment

Rating: fair

The total value of $1.33 billion over nearly 9 years for logistics support in a high-demand environment like Iraq is substantial. Benchmarking this against similar large-scale, long-duration support contracts in contingency operations is challenging due to unique environmental factors and risks. The Cost Plus Award Fee (CPAF) pricing structure, while allowing for flexibility and performance incentives, inherently carries a risk of cost overruns compared to fixed-price contracts. Without detailed breakdowns of award fees and cost components, a precise value-for-money assessment is difficult, but the scale suggests a significant investment in operational sustainment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. The presence of multiple bidders generally fosters price competition and can lead to more favorable pricing for the government. However, the specific number of bids received and the details of the evaluation process are not provided, which limits a deeper analysis of the competitive dynamics. The fact that it was competed broadly suggests that the Army sought the best available solution and price from the market.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it is intended to drive down costs through market forces and ensure the government receives competitive pricing.

Public Impact

U.S. Army personnel operating in Iraq benefit from sustained logistical support. Services provided are critical for maintaining operational readiness and effectiveness of forces. The contract supports a significant geographic area within Iraq. Potential workforce implications include employment for personnel involved in logistics and support operations, both directly and indirectly.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to higher final costs than fixed-price contracts if not managed closely.
The extended duration and high value increase the financial exposure and risk of cost escalation.
Operating in a contingency environment like Iraq presents inherent risks that can impact contract performance and cost.
Lack of specific performance metrics and award fee details makes it hard to gauge true performance incentives.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
The contract's long duration indicates a stable, long-term requirement, providing predictability for the contractor and potentially for the government.
The broad scope of services suggests a comprehensive approach to meeting complex logistical needs.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing a wide range of services necessary for the operation and maintenance of facilities. The market for such services, particularly in support of government and military operations in complex environments, is substantial. Companies like KBR are major players in this space, often competing for large-scale, long-term contracts that require extensive logistical capabilities and experience in challenging geopolitical regions. The spending level is significant, reflecting the critical nature of support services for deployed forces.

Small Business Impact

There is no indication from the provided data that this contract included specific small business set-asides or subcontracting goals. Given the large scale and specialized nature of the services required for overseas military support, it is possible that the prime contractor, KBR Services, LLC, would subcontract portions of the work. However, without explicit data on subcontracting plans or performance, the direct impact on the small business ecosystem remains unclear. Large prime contractors often have established relationships with small businesses, but the extent of this contract's utilization of small businesses is not discernible.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Given the operational context in Iraq, oversight would also involve military command structures and potentially the Special Inspector General for Iraq Reconstruction (SIGIR) during the period of performance, depending on the specific nature of the services. Transparency is generally facilitated through contract award databases, but detailed performance reports and audits are typically internal or classified. The effectiveness of oversight depends on robust reporting requirements and diligent review by government personnel.

Related Government Programs

Logistics Support Services
Contingency Operations Support
Base Operations Support
Advanced Technology Development Services
Department of Defense Contracts
Iraq Reconstruction Contracts

Risk Flags

Cost Overrun Potential
Performance Measurement Difficulty
Contingency Environment Risks
Limited Transparency on Award Fees

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $300.7 million to KBR SERVICES, LLC. 200311!001400!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0057 !20030829!20120131!133468954!133468954!133468954!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!* !* !IZ!* !* !IRAQ !+000088938704!N!N!000000000000!AD23!RDTE/SERVICES-ADV TECH DEV !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !561210!E! !5!B!S! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is KBR SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $300.7 million.

What is the period of performance?

Start: 2003-08-29. End: 2012-09-30.

What was the specific performance of KBR Services, LLC under this contract, particularly concerning award fee determinations?

The provided data does not contain specific details regarding KBR Services, LLC's performance or the determination of award fees under this contract. Contracts structured as Cost Plus Award Fee (CPAF) typically include performance metrics and criteria upon which award fees are based. These details are usually found in contract modifications, performance reports, or audit findings, which are not included in the summary data. Without access to these specific documents, it is impossible to assess whether KBR met or exceeded performance expectations and what award fees, if any, were earned. This lack of transparency makes it difficult to fully evaluate the value received by the government.

How does the per-unit cost of services under this contract compare to similar logistics contracts in other contingency operations?

A direct per-unit cost comparison is not feasible with the provided data. The contract value of $1.33 billion is an aggregate figure over nearly nine years, and the data does not break down costs by specific services or units (e.g., cost per meal, cost per mile, cost per square foot of facility maintenance). Furthermore, comparing costs across different contingency operations is complex due to varying risk levels, operational tempos, security requirements, local labor costs, and supply chain challenges. Each operational environment is unique, making direct benchmarking difficult without detailed cost breakdowns and a thorough understanding of the specific services rendered and the conditions under which they were performed.

What were the primary risks identified during the solicitation and award of this contract, and how were they mitigated?

The provided data does not explicitly detail the risks identified during the solicitation and award phase of this contract. However, given the operational environment (Iraq) and the nature of the services (large-scale logistics and support), inherent risks likely included security threats, logistical complexities, political instability, potential for cost overruns, and contractor performance issues. Mitigation strategies would typically involve robust security protocols, detailed logistical planning, contingency funding, performance incentives (like the award fee structure), and close government oversight. Specific risk mitigation plans are usually documented in the source selection decision document and contract files, which are not accessible here.

What was the overall effectiveness of this contract in supporting U.S. Army operations in Iraq?

The effectiveness of this contract in supporting U.S. Army operations in Iraq can be inferred from its long duration (nearly 9 years) and substantial value ($1.33 billion), suggesting it fulfilled a critical and ongoing need. Such extensive logistics and support contracts are vital for maintaining the operational readiness and sustainability of deployed forces. While specific metrics on operational impact are not provided, the continued reliance on KBR Services, LLC for nearly a decade implies a level of satisfaction with the services rendered in a demanding environment. The contract's success would be measured by its contribution to mission accomplishment through reliable provision of essential services.

How has federal spending on similar logistics and support services in contingency operations evolved since this contract was awarded?

Federal spending on logistics and support services in contingency operations has evolved significantly since this contract's award in 2003. Following major conflicts in Iraq and Afghanistan, there has been a trend towards consolidating support services, increasing the use of performance-based contracts, and emphasizing cost-efficiency. Agencies have also focused on improving oversight and reducing reliance on sole-source or limited-competition contracts where possible. While specific figures vary, the overall demand for such services remains high during active military engagements, but the contracting strategies and oversight mechanisms have been refined to address lessons learned from large contracts like this one.

What was the rationale for using a Cost Plus Award Fee (CPAF) contract type for this requirement?

The rationale for using a Cost Plus Award Fee (CPAF) contract type for this requirement likely stems from the inherent uncertainties and complexities associated with providing large-scale logistics and support services in a contingency environment like Iraq. CPAF contracts allow the government to reimburse the contractor for allowable costs plus an additional fee that is composed of a fixed base fee and an award amount determined by the contractor's performance against pre-defined criteria. This structure provides flexibility in cost reimbursement while incentivizing the contractor to achieve specific performance objectives, which can be crucial in dynamic operational settings where requirements may evolve and performance is paramount.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Brown & Root Industrial Services Holdings, LLC

Address: 601 JEFFERSON ST, HOUSTON, TX, 77002

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAA0902D0007

IDV Type: IDC

Timeline