Army's $287M logistics contract for Iraq services awarded to KBR Services, LLC

Contract Overview

Contract Amount: $287,315,286 ($287.3M)

Contractor: KBR Services, LLC

Awarding Agency: Department of Defense

Start Date: 2004-10-28

End Date: 2012-09-30

Contract Duration: 2,894 days

Daily Burn Rate: $99.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: 200506!000022!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0091 ! !20041028!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !IZ!* !* !IRAQ !+000184500000!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! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $287.3 million to KBR SERVICES, LLC for work described as: 200506!000022!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0091 ! !20041028!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !IZ!* !* … Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Significant duration of nearly 8 years indicates a long-term need for these services. 3. The contract type (Cost Plus Award Fee) allows for performance incentives. 4. The primary service category is Facilities Support Services, crucial for operational readiness. 5. The contract was awarded by the Department of the Army, a major DoD component. 6. The geographic focus on Iraq highlights the operational context of the services.

Value Assessment

Rating: fair

The total award amount of $287,315,285.81 over nearly 8 years suggests a substantial investment. Benchmarking this against similar large-scale logistics support contracts in contingency operations is difficult without more granular data on specific services rendered and performance metrics. The Cost Plus Award Fee (CPAF) structure implies that pricing could fluctuate based on performance, making a direct per-unit cost comparison challenging. However, the sheer scale and duration indicate a significant financial commitment by the Army.

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 3 bids suggests a moderate level of competition for this large-scale contract. While multiple bidders participated, the specific details of the bidding process and the evaluation criteria are not provided, making it difficult to definitively assess the intensity of the competition and its impact on price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple vendors to offer competitive pricing, potentially leading to better value for money. However, the actual savings achieved depend on the effectiveness of the competition and the government's negotiation strategy.

Public Impact

The U.S. Army benefits from essential logistics and facilities support services, enabling its operations. Services provided likely include base operations, maintenance, transportation, and other support functions critical for military personnel in Iraq. The geographic impact is concentrated in Iraq, supporting U.S. military presence and operations in the region. Workforce implications include employment opportunities for both U.S. personnel and potentially local nationals supporting the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance incentives are not tightly managed.
Long contract duration could lead to complacency or reduced innovation if not actively managed.
Geopolitical instability in Iraq could impact service delivery and increase operational costs.
Reliance on a single contractor for extensive logistics support can create dependency and reduce flexibility.

Positive Signals

Awarded through full and open competition, suggesting a structured procurement process.
The contract includes award fee provisions, incentivizing contractor performance.
The contractor, KBR Services, LLC, has a history of performing large-scale government contracts.
The contract duration of nearly 8 years indicates a stable and predictable support structure.

Sector Analysis

This contract falls within the Facilities Support Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector encompasses a wide range of services necessary for the operation and maintenance of facilities, particularly in complex environments like military deployments. The market for such services is substantial, driven by government and commercial entities requiring robust operational support. Comparable spending benchmarks are difficult to establish precisely due to the unique operational context (Iraq) and the comprehensive nature of the services.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss: false'. There is also no explicit mention of subcontracting plans or goals for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem through this specific contract may be limited unless KBR actively engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of the Army) through contract officers and administrative personnel. Performance monitoring, financial audits, and compliance checks are standard oversight mechanisms. The Inspector General's office within the Department of Defense would likely have jurisdiction for investigating fraud, waste, or abuse related to this contract, ensuring accountability and transparency.

Related Government Programs

Logistics Support Services
Base Operations Support
Contingency Contracting
Facilities Maintenance and Management
Department of Defense Procurement

Risk Flags

Contract awarded in a high-risk operational environment (Iraq).
Cost Plus Award Fee contract type can lead to cost uncertainty if not managed properly.
Long contract duration may present risks of contractor complacency or evolving needs not being met.
Potential for contractor performance issues, as has been noted in some large-scale contingency contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $287.3 million to KBR SERVICES, LLC. 200506!000022!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0091 ! !20041028!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !IZ!* !* !IRAQ !+000184500000!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 $287.3 million.

What is the period of performance?

Start: 2004-10-28. End: 2012-09-30.

What was the specific performance history of KBR Services, LLC on this contract, particularly concerning the award fee component?

Detailed performance metrics and award fee allocations for this specific contract are not publicly available in the provided data. However, KBR Services, LLC has a long history of performing large-scale logistics and base support contracts, particularly in overseas contingency operations for the U.S. military. Their performance on such contracts has varied, with periods of commendation for successful execution and periods facing scrutiny or criticism related to cost management, contract modifications, and specific service delivery issues. The Cost Plus Award Fee (CPAF) structure implies that KBR's ability to meet or exceed performance standards directly influenced their final payment, beyond the base cost reimbursement. Without access to the contract's performance reports and award fee determinations, a precise assessment of their performance on this particular $287 million contract remains limited.

How does the total contract value of $287 million compare to other similar logistics support contracts awarded by the Department of Defense during the same period?

The total contract value of approximately $287 million over nearly eight years (2004-2012) represents a significant but not unprecedented investment for large-scale logistics support in a contingency environment like Iraq. During the height of the wars in Iraq and Afghanistan, the Department of Defense awarded numerous multi-billion dollar contracts for base operations, security, and logistics support. Contracts of this magnitude were common for supporting deployed forces. For instance, KBR itself held massive contracts like the Logistics Civil Augmentation Program (LOGCAP) which dwarfed this individual contract in total value. Therefore, while substantial, this $287 million contract for specific logistics support services in Iraq was within the range of major service contracts awarded by the DoD during that era, reflecting the high operational tempo and extensive support requirements.

What were the primary risks associated with this contract, and how were they managed?

The primary risks associated with this contract were multifaceted, stemming from the complex operational environment in Iraq, the extensive scope of services, and the contract type. Key risks included: 1) Security risks to personnel and assets due to the volatile geopolitical situation. 2) Performance risks, ensuring timely and effective delivery of diverse logistics services (transportation, maintenance, supply, etc.) under challenging conditions. 3) Cost risks, particularly with the Cost Plus Award Fee (CPAF) structure, where cost overruns could occur if not managed diligently, and 4) Contractual risks, including scope creep and potential disputes. Risk management likely involved robust security protocols, detailed performance work statements, regular progress reviews, stringent financial oversight by the Army contracting command, and clear communication channels between the government and KBR. The CPAF structure itself was a risk management tool, incentivizing KBR to perform efficiently to earn higher fees.

What was the overall effectiveness of the services provided under this contract in supporting Army operations in Iraq?

Assessing the overall effectiveness of the services provided under this specific contract requires detailed performance data and operational impact reports, which are not available in the provided summary. However, the contract's duration (nearly 8 years) and substantial value suggest that the services were deemed essential and largely effective in supporting Army operations in Iraq during that period. Logistics and facilities support are critical enablers for military missions, impacting troop morale, operational readiness, and mission success. While KBR's broader performance in Iraq has faced scrutiny at times, the continued award and renewal of contracts indicate a perceived value and necessity for the services rendered. Effectiveness would be measured by factors such as on-time delivery of supplies, maintenance of facilities, operational availability of equipment, and overall support to troop welfare and mission accomplishment.

How did historical spending patterns for logistics support in Iraq evolve leading up to and during this contract's period?

Leading up to and during the period of this contract (2004-2012), federal spending on logistics support in Iraq experienced a dramatic increase, mirroring the escalation and subsequent drawdown phases of U.S. military involvement. Initial spending focused on establishing basic infrastructure and immediate operational needs. As the conflict evolved, spending shifted towards more comprehensive base operations, security, and sustainment services, often through large, multi-year contracts like the one awarded to KBR. The total value of logistics and support contracts in Iraq ran into the tens, and even hundreds, of billions of dollars throughout the 2000s. This specific $287 million contract represents a segment of that larger spending trend, reflecting the ongoing requirement for robust logistical capabilities to maintain U.S. forces in a complex and demanding theater of operations throughout that critical period.

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: KBR Services 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