Army awards $443.8M for logistics support in Afghanistan, highlighting long-term service needs

Contract Overview

Contract Amount: $443,756,680 ($443.8M)

Contractor: KBR Services, LLC

Awarding Agency: Department of Defense

Start Date: 2006-06-16

End Date: 2012-09-30

Contract Duration: 2,298 days

Daily Burn Rate: $193.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200608!001444!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0142 ! !20060616!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !AF! ! !AFGHANISTA!+000015103809!Y!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !561210!E! !5!B!S! ! ! !99990909!B! ! !A! !A!U!S!2!003!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $443.8 million to KBR SERVICES, LLC for work described as: 200608!001444!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0142 ! !20060616!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !AF! ! … Key points: 1. Contract awarded for extensive logistics support, indicating significant operational requirements. 2. Long contract duration suggests a sustained need for services in a challenging environment. 3. The award was made under full and open competition, implying a robust bidding process. 4. Services provided are critical for maintaining operational readiness and effectiveness. 5. The scale of the award points to a substantial investment in supporting deployed forces. 6. Focus on facilities support services underscores the infrastructure demands of military operations.

Value Assessment

Rating: fair

The total award amount of $443.8 million over approximately six years represents a significant investment. Benchmarking this against similar large-scale logistics contracts in conflict zones is challenging due to unique operational contexts. However, the cost-plus award fee structure suggests that while a base fee is guaranteed, significant portions of the total value are tied to performance, which can incentivize efficiency but also lead to cost overruns if not managed tightly. The per-unit cost is not discernible from the provided data.

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 invited to submit proposals. The presence of multiple bidders generally fosters price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the designation suggests a healthy competitive environment at the outset.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at a fair market price through competitive bidding.

Public Impact

U.S. Army forces operating in Afghanistan benefit from sustained logistical support. Services include critical functions necessary for maintaining military bases and operations. The contract directly impacts the operational effectiveness and readiness of deployed personnel. Geographic impact is concentrated in Afghanistan, supporting U.S. military presence there. Workforce implications include employment opportunities for both military personnel and civilian contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term nature of the contract in a complex operational environment presents inherent risks.
Cost-plus award fee contracts can sometimes lead to higher final costs if performance incentives are not perfectly aligned with cost control.
Dependence on a single contractor for critical logistics in a remote location can create vulnerabilities.
The specific performance metrics and award fee criteria are not detailed, making it hard to fully assess value for money.
Potential for scope creep or changes in requirements over the contract's extended duration.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
The use of an award fee structure incentivizes contractor performance.
The contract aims to provide essential services, directly supporting military mission objectives.
Long duration indicates a stable, predictable support structure for deployed forces.
The contractor, KBR Services, LLC, has a history of performing large-scale government contracts.

Sector Analysis

This contract falls within the Facilities Support Services sector, a critical component of the broader defense and government services industry. This sector encompasses a wide range of activities necessary to maintain and operate government facilities, particularly in deployed or remote locations. The market for such services is substantial, driven by ongoing military operations and government infrastructure needs globally. Comparable spending benchmarks are difficult to establish precisely due to the unique operational context of Afghanistan, but large-scale logistics and base support contracts often run into hundreds of millions of dollars.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a specific set-aside. However, the prime contractor, KBR Services, LLC, may engage small businesses as subcontractors for various components of the logistics and facilities support services, depending on their subcontracting plan and the nature of the work required. The absence of a small business set-aside means the primary focus was on full and open competition.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Contracting Command and the relevant program executive office responsible for logistics and base support. Accountability measures are embedded within the Cost Plus Award Fee (CPAF) structure, where contractor performance against defined metrics influences the final payment. Transparency is generally maintained through contract award databases like FPDS, though detailed performance reports and audits are often internal or classified. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Logistics Support Services
Base Operations Support
Contingency Contracting
Facilities Management
Afghanistan Reconstruction
Department of Defense Procurement

Risk Flags

Cost Overruns Potential
Performance Measurement Difficulty
Long-Term Dependency Risk
Contract Stability vs. Flexibility
Geopolitical Instability Impact

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $443.8 million to KBR SERVICES, LLC. 200608!001444!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0007 !A!N! !Y!0142 ! !20060616!20120131!133469119!133469119!964409007!N!KELLOGG BROWN&ROOT SERVICES,!4100 CLINTON DR !HOUSTON !TX!77020!00000! !AF! ! !AFGHANISTA!+000015103809!Y!N!000000000000!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !561210!E! !5!B!S! ! ! !99990

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 $443.8 million.

What is the period of performance?

Start: 2006-06-16. End: 2012-09-30.

What is the track record of KBR Services, LLC in performing large-scale logistics and base support contracts, particularly in challenging environments?

KBR Services, LLC, and its predecessors, have a long and extensive history of performing large-scale government contracts, particularly in logistics, base operations support, and construction, often in complex and challenging environments such as Iraq and Afghanistan. They have been a significant player in supporting U.S. military operations abroad for decades. While their performance has generally been characterized by the ability to manage vast operations, they have also faced scrutiny and criticism regarding cost management, contract modifications, and specific incidents in the past. Analyzing their historical performance on similar contracts, including any audits or investigations, would provide further context on their capabilities and potential risks associated with this specific award.

How does the total award amount of $443.8 million compare to similar logistics support contracts awarded by the Department of Defense in the mid-2000s?

The total award amount of $443.8 million for logistics support services in Afghanistan is substantial and aligns with the scale of major support contracts awarded during the peak years of U.S. military operations in that region. During the mid-to-late 2000s, the Department of Defense awarded numerous large, multi-year contracts for base operations, logistics, and security in both Iraq and Afghanistan, often ranging from hundreds of millions to billions of dollars. Contracts like LOGCAP (Logistics Civil Augmentation Program) awarded to KBR and others exemplify the significant financial commitments required to sustain military presence in these theaters. This $443.8 million award is therefore consistent with the high operational tempo and extensive support requirements of that era.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract structure for long-duration services in a contingency environment?

The primary risks with a CPAF structure in a contingency environment include potential for cost growth and challenges in objective performance measurement. While CPAF incentivizes performance through award fees, the 'cost-plus' component means the government reimburses the contractor's allowable costs, plus a fee that is a percentage of those costs. If costs escalate due to unforeseen circumstances, inflation, or scope changes (common in contingency zones), the total contract value can increase significantly. Furthermore, defining objective, measurable criteria for award fees in complex, dynamic environments can be difficult, potentially leading to disputes or perceptions of unfairness. This structure requires robust government oversight to ensure costs are reasonable and performance is genuinely meeting expectations.

What does the 'Facilities Support Services' (NAICS 561210) designation imply about the specific services rendered under this contract?

The NAICS code 561210, 'Facilities Support Services,' indicates that the contract likely encompasses a broad range of services necessary for the operation and maintenance of facilities. This typically includes activities such as facility management, operation of building systems (HVAC, plumbing, electrical), custodial services, grounds maintenance, pest control, and potentially minor repairs and alterations. In the context of a military operation in Afghanistan, these services would be crucial for maintaining the functionality, safety, and habitability of bases, camps, and other deployed infrastructure, ensuring that personnel have the necessary environment to conduct their missions.

How might the long duration (over 6 years) of this contract impact its overall value and the contractor's performance?

A long contract duration, such as the over six years for this logistics support services contract, can have a dual impact on value and performance. On the positive side, it provides stability and predictability for both the government and the contractor, potentially leading to economies of scale, reduced startup costs, and the development of specialized expertise. It allows the contractor to invest in personnel and equipment. However, a long duration also increases the risk of cost escalation due to inflation, changes in market conditions, or evolving operational requirements. It can also lead to contractor complacency if oversight is not maintained rigorously, potentially diminishing performance over time. Furthermore, it ties the government to a specific provider for an extended period, potentially limiting flexibility to adapt to new technologies or seek more competitive pricing later.

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