Army's $4.6B logistics contract for Iraq services awarded to KBR Services, LLC

Contract Overview

Contract Amount: $4,609,561,500 ($4.6B)

Contractor: KBR Services, LLC

Awarding Agency: Department of Defense

Start Date: 2005-06-13

End Date: 2012-12-31

Contract Duration: 2,758 days

Daily Burn Rate: $1.7M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200509!001151!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0089 ! !20050613!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !IZ!* !* !IRAQ !+000135000000!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! ! !20200930!B! ! !A! !A!U!R!2!003!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! !Y! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $4.61 billion to KBR SERVICES, LLC for work described as: 200509!001151!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0089 ! !20050613!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !IZ!* !* … Key points: 1. Contract awarded for extensive logistics support services in Iraq. 2. Significant duration of over 7 years indicates a long-term operational need. 3. The contract's value suggests a substantial commitment to sustaining operations. 4. Awarded under full and open competition, implying a broad search for qualified bidders. 5. The services provided are critical for military operations in a complex environment. 6. The contract was a firm-fixed-price type, aiming for cost certainty.

Value Assessment

Rating: fair

The total award amount of over $4.6 billion for a period of approximately 7.5 years represents a significant investment. Benchmarking this against similar large-scale logistics support contracts in contingency operations is challenging due to the unique nature of the environment. However, the sheer scale suggests a high demand for services. The firm-fixed-price structure was intended to provide cost predictability for the government, but the final cost would depend on the contractor's efficiency in managing operations and unforeseen circumstances.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Army sought proposals from all responsible sources. While the specific number of bidders is not detailed, this approach generally fosters a competitive environment, encouraging multiple companies to submit proposals. This can lead to better pricing and service offerings as contractors vie for the award. The 'full and open' designation suggests a robust procurement process.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it aims to secure the best value by encouraging a wide range of potential contractors to compete, potentially driving down costs and improving service quality.

Public Impact

Military personnel and operations in Iraq benefited from sustained logistical support. Services included a broad range of logistics functions essential for mission accomplishment. The geographic impact was concentrated in Iraq, supporting U.S. military presence. The contract likely supported a significant workforce, both directly employed by KBR and indirectly through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in a high-risk, dynamic operational environment.
Dependency on a single contractor for critical, large-scale logistics functions.
Challenges in ensuring consistent service quality and oversight across a vast operational area.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Firm-fixed-price contract type provides a degree of cost certainty.
Long contract duration indicates a recognized and sustained need for these services.

Sector Analysis

This contract falls within the Facilities Support Services sector, specifically addressing large-scale logistics and base operations support in a contingency environment. The market for such services is characterized by a few large, experienced contractors capable of operating in complex and demanding locations. The U.S. military's extensive global footprint and involvement in operations abroad create a significant demand for these types of support contracts, often valued in the billions of dollars.

Small Business Impact

While the contract was awarded to KBR Services, LLC, a large business, there is no explicit indication of a small business set-aside for the prime contract. Large prime contractors are often required to subcontract portions of the work to small businesses. The extent to which small businesses were involved as subcontractors would determine the direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for such a large contract would typically involve contracting officers, program managers, and potentially Inspector General (IG) offices to ensure compliance with contract terms, performance standards, and financial accountability. Transparency is often managed through contract reporting systems and performance reviews. The complexity of operations in Iraq would necessitate robust oversight mechanisms to mitigate risks and ensure effective service delivery.

Related Government Programs

Logistics Support Services
Base Operations Support
Contingency Contracting
Services (Non-IT)

Risk Flags

High-risk operational environment
Long-term service dependency
Potential for cost escalation
Contract complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.61 billion to KBR SERVICES, LLC. 200509!001151!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0089 ! !20050613!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !IZ!* !* !IRAQ !+000135000000!N!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! ! !20200

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 $4.61 billion.

What is the period of performance?

Start: 2005-06-13. End: 2012-12-31.

What was the specific breakdown of services provided under this contract?

The contract primarily covered logistics support services, designated under NAICS code 561210 (Facilities Support Services). This broad category typically encompasses a wide array of functions essential for maintaining military operations in a deployed environment. While specific line items are not detailed in the provided data, such contracts commonly include services like base operations, facility maintenance and management, transportation and logistics, supply chain management, food services, security support, and potentially construction or repair services. The scale of the award suggests comprehensive support was required across multiple facets of base and operational sustainment in Iraq.

How did the final cost compare to the initial estimated value or ceiling?

The provided data indicates a total award amount of $4,609,561,500.42. Without knowing the initial ceiling or estimated value set at the time of award, it's difficult to definitively state how the final cost compares. However, the award amount represents the total value obligated over the contract's life. Given the firm-fixed-price nature, the government aimed for cost certainty, but the actual expenditure could fluctuate based on performance and any modifications or adjustments made during the contract's nearly 7.5-year duration. Further analysis would require access to the contract's modification history and initial solicitation documents.

What were the key performance indicators (KPIs) used to evaluate KBR Services, LLC's performance?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided summary data. However, for large-scale logistics support contracts in contingency operations, KPIs typically focus on reliability, availability, maintainability, and responsiveness of services. This would include metrics related to on-time delivery of supplies, operational readiness of facilities, response times for maintenance requests, quality of food services, and overall mission support effectiveness. Performance would likely be monitored through regular reports, site visits, and potentially contractor performance assessment reporting (CPAR) systems.

Were there any significant contract modifications or disputes during its performance period?

The provided data does not include information on contract modifications or disputes. Large, long-term contracts, especially those performed in complex environments like Iraq, often undergo modifications to adjust scope, funding, or timelines based on evolving operational requirements. Disputes can also arise concerning contract interpretation, performance, or payment. A comprehensive review of the contract's official modification history and any associated legal or administrative records would be necessary to identify any significant changes or disputes that occurred during its performance from June 2005 to December 2012.

What is the historical spending trend for similar logistics support services in the region?

Historical spending on logistics support services in regions like Iraq has been substantial, particularly during periods of active military engagement. Contracts of this magnitude are not uncommon for major overseas operations requiring extensive base support, supply chain management, and personnel services. Preceding and concurrent contracts for similar services in the Middle East theater would likely show significant investment, reflecting the logistical demands of sustaining large military forces in austere environments. Analyzing trends would involve examining spending patterns across different agencies and fiscal years for contingency support contracts.

What was the rationale for awarding such a large contract to KBR Services, LLC?

The rationale for awarding this large contract to KBR Services, LLC, stems from the company's demonstrated capability and experience in providing extensive logistics and base support services, particularly in challenging overseas environments. As a large, established contractor with a history of performing similar large-scale operations for the Department of Defense, KBR likely possessed the infrastructure, personnel, and expertise required to meet the demanding requirements of supporting U.S. forces in Iraq. The full and open competition process would have allowed the Army to evaluate multiple proposals based on factors such as technical approach, past performance, management capability, and price, ultimately selecting KBR as the best value offeror.

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

Pricing Type: FIRM FIXED PRICE (J)

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