Army awards $350M+ for facilities support services to KBR Services, LLC over 9 years

Contract Overview

Contract Amount: $350,058,976 ($350.1M)

Contractor: KBR Services, LLC

Awarding Agency: Department of Defense

Start Date: 2003-08-12

End Date: 2012-09-30

Contract Duration: 3,337 days

Daily Burn Rate: $104.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: 200311!001440!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0061 !20030812!20120131!016111226!016111226!964409007!N!BROWN & ROOT SERVICES, A DIVIS!4100 CLINTON DRIVE !HOUSTON !TX!77020!* !* !QA!* !* !QATAR !+000040000000!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 $350.1 million to KBR SERVICES, LLC for work described as: 200311!001440!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0061 !20030812!20120131!016111226!016111226!964409007!N!BROWN & ROOT SERVICES, A DIVIS!4100 CLINTON DRIVE !HOUSTON !TX!77020!* !* !QA!* !* … Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of over 9 years indicates a long-term need for these services. 3. The contract type is Cost Plus Award Fee, which incentivizes performance but can lead to higher costs. 4. The North American Industry Classification System (NAICS) code 561210 points to facilities support services. 5. The award was made by the Department of the Army, a major component of the Department of Defense. 6. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: fair

The total award amount of over $350 million spread across more than 9 years suggests an average annual spend of approximately $38 million. Benchmarking this requires understanding the specific scope of facilities support services, which can vary widely. Without more granular data on the services provided (e.g., maintenance, logistics, base operations), direct comparison to similar contracts is challenging. The Cost Plus Award Fee (CPAF) contract type allows for cost reimbursement plus a fee that can be adjusted based on performance, which can be effective for complex services but may not always yield the lowest price compared to fixed-price contracts.

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 number of bidders is not explicitly stated in the provided data, but the designation implies a competitive process was utilized. This approach is generally expected to foster price discovery and potentially lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining services at competitive market rates, preventing potential overpayment that could arise from less competitive procurement methods.

Public Impact

The U.S. Army benefits from the provision of essential facilities support services, ensuring operational readiness and infrastructure maintenance. Services delivered likely encompass a range of facility management functions, potentially including maintenance, repair, logistics, and base operations support. The geographic impact is likely concentrated in areas where the U.S. Army operates, particularly in Qatar, as indicated by the delivery location. Workforce implications include employment opportunities for personnel involved in providing these facilities support services, both directly by the contractor and potentially through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee structure can lead to higher overall costs if award fees are consistently maximized without strict cost controls.
Long contract duration (over 9 years) may reduce flexibility to adapt to changing requirements or market conditions.
Specific details on performance metrics and award fee criteria are not provided, making it difficult to assess the effectiveness of the incentive structure.
The delivery location being Qatar suggests potential complexities related to international operations, logistics, and geopolitical factors.

Positive Signals

Awarded through full and open competition, which generally promotes competitive pricing.
The contractor, KBR Services, LLC, has a significant presence and experience in government contracting, particularly in logistics and support services.
The Cost Plus Award Fee structure, if well-managed, can incentivize high performance and quality service delivery.
The contract addresses a long-term need for critical facilities support, ensuring continuity of operations for the Army.

Sector Analysis

Facilities Support Services fall under the broader professional, scientific, and technical services sector. This sector is characterized by a wide range of specialized services supporting government and commercial operations. The market size for facilities management is substantial, with government contracts forming a significant portion. This contract fits within the Defense sector's need for operational support, ensuring bases and facilities are maintained and functional. Comparable spending benchmarks would typically involve analyzing other large-scale facilities support contracts awarded by the Department of Defense or other federal agencies for similar scope and duration.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false) and does not explicitly mention subcontracting plans for small businesses (sb: false, st: ''). This suggests that the primary award was made to a large business, KBR Services, LLC. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contractors often utilize small businesses for specialized support roles.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of the Army. Performance monitoring is inherent in the Cost Plus Award Fee structure, which includes criteria for earning award fees. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Base Operations Support (BOS)
Logistics and Supply Chain Management Services
Facilities Maintenance and Repair Contracts
Contingency Base Support Services
Information Technology Support Services (if included in scope)

Risk Flags

Potential for cost overruns due to CPAF structure.
Risk of performance degradation over the long contract duration.
Geopolitical and logistical risks associated with operating in Qatar.
Lack of detailed scope of work makes precise value assessment difficult.
Potential for requirements to become outdated over the 9+ year term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $350.1 million to KBR SERVICES, LLC. 200311!001440!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0061 !20030812!20120131!016111226!016111226!964409007!N!BROWN & ROOT SERVICES, A DIVIS!4100 CLINTON DRIVE !HOUSTON !TX!77020!* !* !QA!* !* !QATAR !+000040000000!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 $350.1 million.

What is the period of performance?

Start: 2003-08-12. End: 2012-09-30.

What is the specific scope of 'Facilities Support Services' covered under this contract, and how does it compare to industry standards for similar contracts?

The provided data identifies the North American Industry Classification System (NAICS) code as 561210, which encompasses 'Facilities Support Services.' This broad category typically includes a range of services such as operation, maintenance, and repair of buildings and other facilities, including groundskeeping, pest control, and refuse collection. However, the specific services under this particular contract are not detailed. For instance, it could include anything from routine janitorial services and landscaping to complex mechanical system maintenance, security, and even food services, depending on the Army's requirements. Industry standards for similar contracts often involve detailed statements of work (SOWs) outlining specific tasks, performance metrics (e.g., response times for repairs, cleanliness standards), and reporting requirements. Without the SOW, it's difficult to precisely benchmark this contract's scope against industry norms or other government facilities support contracts.

How does the Cost Plus Award Fee (CPAF) structure potentially impact the final cost and contractor performance compared to other contract types like Firm-Fixed-Price (FFP)?

The Cost Plus Award Fee (CPAF) contract type reimburses the contractor for allowable costs incurred plus a fee that consists of a fixed base amount and an award amount. The award amount is determined by the government based on the contractor's performance against pre-defined criteria. This structure is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty, encouraging contractor initiative and high performance to earn the award fee. Compared to a Firm-Fixed-Price (FFP) contract, CPAF generally offers less price certainty for the government, as the final cost depends on actual expenses and the awarded fee. However, it can be more effective than FFP in situations requiring flexibility and high-quality performance, as it incentivizes the contractor to exceed minimum requirements to achieve higher award fees. The risk of cost overruns is shared, but the government retains control over the fee awarded, providing a mechanism to reward exceptional performance or penalize subpar results.

What is KBR Services, LLC's track record with similar large-scale facilities support contracts, particularly with the Department of Defense?

KBR Services, LLC (and its predecessors/affiliates) has a long and extensive history of performing large-scale support services contracts for the U.S. military, including extensive work in base operations, logistics, and facilities management, particularly in overseas environments. They have been a significant contractor in regions like Iraq and Afghanistan, managing complex logistical challenges and maintaining critical infrastructure. Their experience often involves providing a wide array of services, aligning with the broad NAICS code of 561210. Government contract databases and past performance reviews would provide more specific details on their performance ratings, any past issues or disputes, and their success in meeting performance objectives on similar contracts. Generally, KBR is recognized as a major player in this domain, suggesting a substantial capability to handle contracts of this magnitude and complexity.

Given the contract's duration of over 9 years, what are the potential risks associated with long-term government contracts of this nature?

Long-term government contracts, such as this 9+ year award, present several potential risks. Firstly, there's the risk of scope creep or requirements evolving significantly over the contract's life, potentially leading to cost increases or the need for contract modifications that may not be fully competitive. Secondly, market conditions and technology can change, making the contracted services or pricing potentially outdated by the end of the term. Contractor performance can also degrade over time, or key personnel may leave, impacting service quality. For the government, there's the risk of becoming locked into a specific solution or contractor, reducing flexibility and potentially hindering the adoption of more innovative or cost-effective alternatives that emerge later. Finally, long durations can sometimes mask inefficiencies if robust oversight and performance management are not consistently applied throughout the entire period.

How does the delivery location in Qatar influence the contract's execution, cost, and risk profile?

A delivery location in Qatar introduces specific complexities and risks compared to a domestic contract. Execution requires navigating international logistics, potentially different labor laws, customs regulations, and security protocols. Costs can be higher due to factors like transportation of personnel and equipment, potential use of local or third-country nationals, and the need for specialized security arrangements. The risk profile is elevated due to geopolitical considerations, potential political instability in the region, and the logistical challenges inherent in operating far from the contractor's home base. Furthermore, compliance with local laws and cultural norms is critical. The U.S. Army's presence in Qatar is often tied to strategic military objectives, meaning the services provided are critical to ongoing operations, adding pressure for uninterrupted performance despite these external factors.

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