DoD's $331M Logistics Support Program in Kuwait: A Deep Dive into Operations and Maintenance
Contract Overview
Contract Amount: $331,453,620 ($331.5M)
Contractor: KBR Services, LLC
Awarding Agency: Department of Defense
Start Date: 2006-12-11
End Date: 2012-09-30
Contract Duration: 2,120 days
Daily Burn Rate: $156.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST NO FEE
Sector: Other
Official Description: A LOGISTICS SUPPORT PROGRAM EXERCISING THE PREPLANNED USE OF GLOBAL CORPORATE RESOURCES TO SUPPORT WORLD WIDE CONTINGENCY OPERATIONS BY AUGMENTING COMBAT SUPPORT AND COMBAT SERVICES SUPPORT. THIS TASK ORDER PROVIDES LIFE SUPPORT AND OPERATIONS AND MAINTENANCE SERVICES IN KUWAIT
Plain-Language Summary
Department of Defense obligated $331.5 million to KBR SERVICES, LLC for work described as: A LOGISTICS SUPPORT PROGRAM EXERCISING THE PREPLANNED USE OF GLOBAL CORPORATE RESOURCES TO SUPPORT WORLD WIDE CONTINGENCY OPERATIONS BY AUGMENTING COMBAT SUPPORT AND COMBAT SERVICES SUPPORT. THIS TASK ORDER PROVIDES LIFE SUPPORT AND OPERATIONS AND MAINTENANCE SERVICES IN KUWAIT Key points: 1. Contract provides essential life support and O&M services in Kuwait, crucial for contingency operations. 2. The program leverages global corporate resources, indicating a strategic approach to augmenting combat support. 3. With a duration of 2120 days, this task order represents a significant, long-term commitment. 4. The 'Cost No Fee' contract type suggests a focus on cost recovery rather than profit for the contractor. 5. The award was made under full and open competition, implying a broad search for qualified vendors. 6. The contractor, KBR Services, LLC, has a substantial history with this type of support. 7. This contract falls under Facilities Support Services, a critical component of logistical operations.
Value Assessment
Rating: good
The total value of $331.45 million over approximately 5.7 years for extensive life support and operations and maintenance services in a high-demand contingency environment appears reasonable. While specific per-unit cost benchmarks are not provided, the 'Cost No Fee' contract type suggests that the government is primarily reimbursing the contractor for actual costs incurred, which can be an efficient model if well-managed. Benchmarking against similar large-scale logistics support contracts in comparable regions would provide further insight into value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 offers suggests a healthy level of competition for this significant task order. A competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government.
Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down costs and ensures the government receives the best possible value for its investment in critical logistical support.
Public Impact
Service members and personnel operating in Kuwait receive essential life support, including housing, food, and facility maintenance. The program directly supports global contingency operations by ensuring robust logistical capabilities are in place. Geographic impact is concentrated in Kuwait, providing a stable operational base. Workforce implications include employment opportunities for both U.S. personnel and potentially local nationals in Kuwait for support roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if not closely monitored due to the 'Cost No Fee' structure.
- Reliance on a single contractor for critical life support could pose risks if performance falters.
- Geopolitical instability in the region could impact operational continuity and costs.
Positive Signals
- Contractor's experience in providing similar services globally suggests a high likelihood of successful execution.
- Full and open competition indicates a robust selection process, likely resulting in a capable provider.
- Long-term nature of the contract allows for economies of scale and stable service provision.
Sector Analysis
This contract falls within the Facilities Support Services sector, a critical segment of the broader logistics and support industry. This sector is characterized by its essential role in enabling military and government operations, particularly in complex environments. The market size for such services is substantial, driven by ongoing global security needs and infrastructure development. This specific contract represents a significant portion of spending within this niche, highlighting the importance of reliable support infrastructure for deployed forces.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. Given the scale and nature of the services required (global logistics support), it is likely that the prime contractor, KBR Services, LLC, possesses the extensive resources and capabilities necessary to manage such a large operation. Further investigation into subcontracting opportunities would be needed to assess the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. Performance monitoring, financial audits, and compliance checks are standard accountability measures. Transparency is generally maintained through contract databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Logistics Support Contracts
- Contingency Operations Support
- Facilities Operations and Maintenance
- Global Support Services
- Department of Defense Procurement
Risk Flags
- Cost Control
- Performance Monitoring
- Geopolitical Risk
Tags
defense, department-of-defense, department-of-the-army, logistics-support, facilities-support-services, full-and-open-competition, cost-no-fee, kuwait, contingency-operations, delivery-order, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $331.5 million to KBR SERVICES, LLC. A LOGISTICS SUPPORT PROGRAM EXERCISING THE PREPLANNED USE OF GLOBAL CORPORATE RESOURCES TO SUPPORT WORLD WIDE CONTINGENCY OPERATIONS BY AUGMENTING COMBAT SUPPORT AND COMBAT SERVICES SUPPORT. THIS TASK ORDER PROVIDES LIFE SUPPORT AND OPERATIONS AND MAINTENANCE SERVICES IN KUWAIT
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 $331.5 million.
What is the period of performance?
Start: 2006-12-11. End: 2012-09-30.
What is KBR Services, LLC's track record with similar large-scale logistics support contracts for the Department of Defense?
KBR Services, LLC has a long and extensive history of providing logistics, engineering, and support services to the U.S. military and government agencies worldwide. They have been a significant player in supporting contingency operations, base support, and infrastructure development in various theaters, including the Middle East. Their experience encompasses a wide range of services similar to those required in this Kuwaiti task order, such as life support, facility maintenance, transportation, and base operations. This extensive background suggests a high degree of familiarity with military requirements, operational environments, and the complexities of managing large, geographically dispersed support programs, which generally positions them as a reliable contractor for such demanding tasks.
How does the $331.45 million cost compare to similar logistics support contracts in the Middle East?
Benchmarking the $331.45 million cost requires comparing it to contracts of similar scope, duration, and geographic location. Large-scale logistics support contracts in the Middle East, especially those involving life support, operations, and maintenance for significant troop presence during contingency operations, can range from tens to hundreds of millions of dollars annually. Given this task order's duration of approximately 5.7 years (2120 days), the total cost averages around $58 million per year. This figure appears to be within the expected range for comprehensive support services in a demanding operational environment like Kuwait, considering factors such as personnel, equipment, security, and infrastructure management. However, a precise comparison would necessitate detailed analysis of specific service inclusions and market conditions at the time of award.
What are the primary risks associated with a 'Cost No Fee' contract for life support services?
A 'Cost No Fee' (CNF) contract means the contractor is reimbursed for allowable costs but does not receive any profit. The primary risk for the government in a CNF contract is the potential for cost escalation if the contractor does not have a strong incentive to control expenses, as their profit is not tied to efficiency. While the government avoids paying profit, it must ensure robust oversight to prevent unnecessary costs. For the contractor, the risk lies in absorbing unexpected costs that exceed the estimated budget, as they cannot recoup these losses through profit. Effective management and stringent cost controls by the government are crucial to mitigate these risks and ensure the contract remains cost-effective.
How effective is the 'full and open competition' approach for securing complex logistics support services?
The 'full and open competition' approach is generally considered the most effective method for securing complex logistics support services as it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive bids and innovative solutions. This broad competition allows the government to identify contractors with the best capabilities, experience, and pricing. For complex services like global logistics, it ensures that specialized firms can compete, leading to better value for the taxpayer. The requirement for multiple offers (3 in this case) indicates that the competition was meaningful, suggesting that the government likely secured a capable provider at a competitive price point, which is crucial for mission success in demanding operational environments.
What are the historical spending patterns for similar logistics support programs by the Department of the Army?
The Department of the Army has historically allocated substantial funding towards logistics support programs, particularly for overseas contingency operations and base support. Spending in this category often fluctuates based on global security postures and deployment levels. Programs similar to this one, providing comprehensive life support and operational maintenance in regions like the Middle East, have consistently represented a significant portion of the Army's procurement budget. Annual spending can range from billions to tens of billions of dollars across various contracts, reflecting the continuous need for robust logistical capabilities to sustain military readiness and operational effectiveness in diverse and challenging environments worldwide.
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 NO FEE (S)
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
Financial Breakdown
Contract Ceiling: $331,495,794
Exercised Options: $331,495,794
Current Obligation: $331,453,620
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: DAAA0902D0007
IDV Type: IDC
Timeline
Start Date: 2006-12-11
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 12:09:00
Last Modified: 2025-07-31
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