DoD's $133M contract for logistics support in Djibouti awarded to KBR Services, LLC

Contract Overview

Contract Amount: $73,374,377 ($73.4M)

Contractor: KBR Services, LLC

Awarding Agency: Department of Defense

Start Date: 2004-09-28

End Date: 2006-06-01

Contract Duration: 611 days

Daily Burn Rate: $120.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200412!002146!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0094 ! !20040928!20120131!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !DJ!* !* !DJIBOUTI !+000003000000!N!N!000000000000!AD23!RDTE/SERVICES-ADV TECH DEV !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! ! !99990909!B! ! !A! !A!U!R!2!003!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77002

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $73.4 million to KBR SERVICES, LLC for work described as: 200412!002146!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0094 ! !20040928!20120131!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !DJ!* !* … 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 performance but can lead to higher costs. 3. The duration of the contract is over 5 years, indicating a long-term need for these services. 4. The primary contractor, KBR Services, LLC, has a significant presence in government contracting. 5. The services provided fall under Facilities Support Services, a broad category essential for operational readiness. 6. The contract was awarded by the Defense Contract Management Agency, indicating robust oversight.

Value Assessment

Rating: fair

The total award amount of $133,468,954 for a period of approximately 5 years for logistics support services in Djibouti appears to be within a reasonable range for such extensive operations. However, without specific benchmarks for similar contracts in that geographic region or for the exact scope of services, a definitive value-for-money assessment is challenging. The Cost Plus Award Fee (CPAF) structure allows for contractor flexibility and performance incentives, but it also carries the risk of cost overruns if not managed tightly. The contract's base value and potential award fees need careful monitoring to ensure taxpayer funds are used efficiently.

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 offers. The data shows 3 offers were received. This level of competition is generally positive for price discovery and ensuring the government receives competitive pricing. The fact that multiple bids were submitted suggests that the market for these services is sufficiently robust to support competition, which should theoretically drive down costs and improve service quality.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better value for the services procured. It ensures that the government is not locked into a single provider and can leverage market forces to its advantage.

Public Impact

The U.S. Army Industrial Operations is the primary beneficiary, receiving essential logistics and facilities support. Services include advanced technology development and general facilities support, crucial for military operations in Djibouti. The geographic impact is concentrated in Djibouti, supporting U.S. military presence and operations in the Horn of Africa. The contract supports a workforce involved in complex logistics and facility management, contributing to employment in the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to higher final costs compared to fixed-price contracts if not meticulously managed.
The long duration of the contract (over 5 years) necessitates ongoing vigilance to ensure continued value and performance.
Reliance on a single primary contractor for extensive logistics support in a remote location can pose risks if performance falters.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace for these services.
The Defense Contract Management Agency's involvement suggests a structured oversight and accountability framework.
The contract's focus on essential support services ensures critical operational needs are met for the U.S. Army.

Sector Analysis

This contract falls within the Facilities Support Services sector (NAICS code 561210), a significant segment of the government contracting market. This sector encompasses a wide range of services, including maintenance, operation, and support of facilities. The global nature of military operations often requires extensive logistics and support contracts in strategic locations like Djibouti. Comparable spending benchmarks for similar large-scale, long-term logistics contracts in overseas military installations would provide further context for assessing the value and pricing of this award.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses arising from a set-aside provision. The primary contractor, KBR Services, LLC, will likely manage subcontracting opportunities based on its own business needs and the specific requirements of the contract, rather than through mandated small business participation goals tied to a set-aside.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides a layer of oversight for defense contracts. The Cost Plus Award Fee (CPAF) structure implies performance metrics and award criteria that are subject to review and approval. Transparency regarding the specific award fee criteria and the justification for awarded fees would enhance accountability. Further details on Inspector General involvement or specific audit protocols would provide a more complete picture of the oversight mechanisms.

Related Government Programs

Logistics Support Services
Base Operations Support
Contingency Contracting
Defense Readiness Support
Global Force Projection Support

Risk Flags

Cost Plus Award Fee (CPAF) contract type can lead to higher costs if not managed effectively.
Long contract duration requires sustained oversight to ensure value.
Performance in remote overseas locations can be subject to unique logistical and geopolitical risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.4 million to KBR SERVICES, LLC. 200412!002146!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0094 ! !20040928!20120131!133468954!133468954!964409007!N!KELLOGG BROWN & ROOT SERVICES,!9900 WESTPARK DR !HOUSTON !TX!77060!00000! !DJ!* !* !DJIBOUTI !+000003000000!N!N!000000000000!AD23!RDTE/SERVICES-ADV TECH DEV !S1 !SERVICES !000 !* !561210!E! !5!B!S! ! ! !999

Who is the contractor on this award?

The obligated recipient is KBR SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $73.4 million.

What is the period of performance?

Start: 2004-09-28. End: 2006-06-01.

What is the track record of KBR Services, LLC in managing large-scale logistics contracts for the Department of Defense, particularly in overseas environments?

KBR Services, LLC, and its predecessors, have a long and extensive history of managing large-scale logistics and support contracts for the Department of Defense, both domestically and in numerous overseas environments. They have been a significant player in providing services in complex operational theaters, including Iraq and Afghanistan, often involving base operations, life support, transportation, and maintenance. Their experience includes managing contracts with substantial dollar values and durations, similar to the Djibouti contract. While their track record is generally characterized by extensive experience, like any large contractor, they have faced scrutiny and challenges on specific contracts related to cost, performance, and oversight. A detailed review of past performance evaluations and any contract disputes or modifications would provide a more nuanced understanding of their capabilities and reliability for this specific Djibouti contract.

How does the per-unit cost or cost-per-service compare to similar contracts awarded by the DoD for logistics support in comparable geographic regions?

Benchmarking the per-unit cost or cost-per-service for this $133 million contract against similar logistics support contracts in comparable geographic regions is challenging without access to detailed pricing breakdowns and specific contract data. Factors such as the specific services included (e.g., facility maintenance, transportation, security, advanced technology development), the duration of the contract, the operational tempo, local labor costs, logistical complexities of the region (Djibouti is a strategic but remote location), and the competitive landscape at the time of award all significantly influence pricing. Generally, contracts in austere or high-risk environments tend to command higher prices due to increased operational costs and risks. A thorough comparison would require analyzing data from contracts with similar scopes of work, durations, and geographic locations, ideally awarded under similar competitive conditions, which is often proprietary or not publicly detailed at a granular level.

What are the primary risk indicators associated with this Cost Plus Award Fee (CPAF) contract structure for logistics support in Djibouti?

The primary risk indicator for this Cost Plus Award Fee (CPAF) contract is the potential for cost growth. While CPAF incentivizes performance through award fees, it allows the contractor to recover allowable costs plus a fee that can be adjusted based on performance. If the performance metrics are not clearly defined, objectively measurable, or if oversight is insufficient, costs can escalate beyond initial projections. Another risk relates to the contractor's ability to consistently meet performance standards required to earn the maximum award fee, which could indicate underlying operational issues. Furthermore, the long duration and the nature of logistics support in a remote location like Djibouti introduce risks related to supply chain disruptions, geopolitical instability, and the need for adaptable service delivery. Effective risk mitigation requires robust contract administration, clear performance standards, and diligent monitoring of costs and performance.

What is the historical spending pattern for facilities support services and logistics in Djibouti by the Department of Defense over the past decade?

Analyzing the historical spending pattern for facilities support services and logistics in Djibouti by the Department of Defense over the past decade would reveal trends in demand, contractor utilization, and average contract values. This specific contract, awarded in 2004 with an end date in 2012 (though the data shows an end date of 2006-01-01, the total award value suggests a longer period or significant modifications), represents a substantial investment. Historical data would likely show a consistent need for such services due to the strategic importance of Camp Lemonnier and the broader U.S. Africa Command (AFRICOM) area of responsibility. Understanding whether spending has increased, decreased, or remained stable, and how contract values have evolved, would provide context for the current contract's scale and necessity. It would also highlight any shifts in the types of services procured or the primary contracting vehicles used.

How does the number of bidders (3) in this full and open competition compare to the average number of bids received for similar large-scale DoD support contracts?

Receiving 3 bids in a full and open competition for a large-scale Department of Defense support contract like this one is a moderate level of competition. The average number of bids can vary significantly depending on the specific service, the geographic location, the complexity of the requirement, and the overall market conditions. For highly specialized or niche services, or in remote or challenging environments, fewer bidders might be expected. Conversely, for more common services in accessible locations, a higher number of bids might be typical. Three bidders suggest that while the competition was not extremely crowded, it was sufficient to provide the government with options and leverage market dynamics. It indicates that the requirement was known and accessible to multiple capable contractors, but perhaps not so broadly appealing or easily executable as to attract a larger pool of offers.

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