DoD's $8.9B Facilities Support Contract to KBR Services Shows Long-Term Commitment
Contract Overview
Contract Amount: $8,949,368,389 ($8.9B)
Contractor: KBR Services, LLC
Awarding Agency: Department of Defense
Start Date: 2008-09-24
End Date: 2012-09-30
Contract Duration: 1,467 days
Daily Burn Rate: $6.1M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: FOLLOW ON TASK ORDER TO 139 IS NOW TASK ORDER 159
Plain-Language Summary
Department of Defense obligated $8.95 billion to KBR SERVICES, LLC for work described as: FOLLOW ON TASK ORDER TO 139 IS NOW TASK ORDER 159 Key points: 1. This contract represents a significant, long-term investment in facilities support services for the Department of Defense. 2. The extensive duration and substantial value suggest a critical need for these services and a reliance on the incumbent contractor. 3. The 'Cost Plus Award Fee' structure incentivizes performance but requires careful monitoring to ensure value for money. 4. The contract's full and open competition basis is a positive indicator for price discovery, though the follow-on nature may limit future competition. 5. The lack of small business set-aside or subcontracting data warrants further investigation into opportunities for smaller firms. 6. The contract's performance period spans over a decade, indicating a stable but potentially less agile service delivery model.
Value Assessment
Rating: good
Benchmarking the value of this $8.9 billion contract is challenging due to its broad scope and long duration. However, the Cost Plus Award Fee (CPA) pricing structure suggests a mechanism for incentivizing performance and controlling costs, provided award fees are tied to measurable outcomes. Comparing it to similar large-scale, multi-year facilities support contracts for federal agencies would be necessary for a more precise value assessment. The absence of specific performance metrics makes it difficult to definitively assess value-for-money without further data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete for this significant requirement. While the initial award was competitive, the fact that this is a follow-on task order suggests a potential for incumbent advantage in subsequent phases. The number of bidders for the original contract is not specified, but the full and open nature is generally positive for price discovery.
Taxpayer Impact: Full and open competition at the outset is beneficial for taxpayers as it encourages a wider range of proposals and potentially drives down initial pricing. However, the long-term nature and follow-on task order structure could lead to reduced competition in later stages, potentially impacting long-term cost efficiency.
Public Impact
The Department of Defense benefits from consistent and comprehensive facilities support services across its installations. Military personnel and civilian employees are provided with functional and safe working and living environments. The contract supports the operational readiness of military forces by ensuring infrastructure is maintained. Geographic impact is likely widespread, covering multiple DoD installations requiring facilities management. The contract supports a significant workforce, both directly employed by KBR Services and indirectly through its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns given the Cost Plus Award Fee structure if award criteria are not rigorously managed.
- Long contract duration may lead to complacency or reduced innovation from the contractor.
- Lack of transparency on small business subcontracting could mean missed opportunities for smaller enterprises.
- Dependence on a single contractor for critical facilities support could pose a risk if performance degrades.
Positive Signals
- Full and open competition at award suggests a competitive initial pricing environment.
- The Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
- The long duration indicates a stable and reliable provision of essential services.
- The contract's scale suggests the contractor has the capacity and experience to manage complex requirements.
Sector Analysis
This contract falls within the Facilities Support Services sector, a broad category encompassing maintenance, repair, operations, and management of physical infrastructure. This sector is crucial for government operations, ensuring that facilities are functional, safe, and compliant with regulations. The market size for federal facilities support services is substantial, with agencies like the Department of Defense being major consumers. This contract represents a significant portion of spending within this niche, likely involving a wide array of services from janitorial to complex building systems management.
Small Business Impact
The provided data indicates that small business participation (ss: false, sb: false) was not a primary consideration for this contract, either through set-asides or explicit subcontracting goals. This suggests that the primary focus was on the prime contractor's capabilities. Further analysis would be needed to determine if KBR Services has a robust subcontracting plan that includes small businesses. The lack of explicit small business involvement could limit opportunities for smaller firms to participate in large federal contracts and potentially reduce overall competition.
Oversight & Accountability
Oversight for this contract would primarily reside with the contracting officer and the Department of the Army's program management office. The Cost Plus Award Fee structure necessitates detailed performance monitoring and evaluation to determine award fee payments, providing a degree of accountability. Transparency regarding performance metrics and award fee decisions would be key to assessing oversight effectiveness. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Defense Base Operations Support (BOS)
- General Services Administration (GSA) Facilities Management Contracts
- Department of Veterans Affairs (VA) Facility Maintenance
- Other Agency-Specific Facilities Support Contracts
Risk Flags
- Potential for cost creep due to CPA structure.
- Lack of defined small business subcontracting goals.
- Long duration may reduce contractor incentive for innovation.
- Follow-on task order may indicate reduced future competition.
Tags
defense, department-of-defense, facilities-support-services, kbr-services-llc, cost-plus-award-fee, full-and-open-competition, delivery-order, large-contract, long-term-contract, army, facilities-management, operations-and-maintenance
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $8.95 billion to KBR SERVICES, LLC. FOLLOW ON TASK ORDER TO 139 IS NOW TASK ORDER 159
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 $8.95 billion.
What is the period of performance?
Start: 2008-09-24. End: 2012-09-30.
What is the historical spending trend for facilities support services within the Department of the Army?
Historical spending on facilities support services by the Department of the Army has been substantial and consistent, reflecting the vast infrastructure managed by the service. While specific figures for this contract's predecessors are not detailed here, the Army consistently allocates billions annually towards maintaining its installations, encompassing everything from routine upkeep to major repairs and specialized services. This $8.9 billion contract, spanning from 2008 to 2012 with a follow-on task order, represents a significant but not isolated investment. Analyzing broader trends would involve examining annual budget appropriations for facilities maintenance and operations across different Army commands and installations over the past decade or more, looking for patterns of growth, contraction, or shifts in service delivery models.
How does the Cost Plus Award Fee (CPA) structure typically impact contractor performance and cost control in large federal contracts?
The Cost Plus Award Fee (CPA) structure is designed to provide flexibility in pricing while incentivizing contractor performance beyond minimum requirements. Under a CPA contract, the contractor is reimbursed for allowable costs plus a fixed fee, with the potential for an additional award fee based on performance against defined criteria. This structure can be effective in complex service contracts where performance is difficult to quantify precisely upfront. However, it requires robust government oversight to ensure that award criteria are objective, measurable, and rigorously applied. Without strong oversight, there's a risk that award fees could be granted too liberally, leading to higher costs than anticipated and potentially less incentive for true cost control. Conversely, well-defined criteria and diligent evaluation can drive superior performance and value.
What are the potential risks associated with a single contractor holding a long-term, high-value facilities support contract?
A significant risk associated with a single contractor holding a long-term, high-value facilities support contract is the potential for reduced competition and innovation over time. As the incumbent contractor gains deep institutional knowledge and establishes strong relationships, it can become more difficult for new or smaller competitors to enter the market, potentially leading to higher prices in future re-competitions or extensions. There's also a risk of contractor complacency, where the lack of competitive pressure might lead to a decline in service quality or a reluctance to adopt new technologies or more efficient processes. Furthermore, over-reliance on a single provider creates vulnerability; any disruption in the contractor's operations, such as financial instability, labor disputes, or performance failures, could have a severe impact on the government's ability to maintain essential facilities and operations.
How does the 'Facilities Support Services' NAICS code (561210) typically encompass the scope of work for a contract of this magnitude?
The North American Industry Classification System (NAICS) code 561210, 'Facilities Support Services,' is a broad category that encompasses a wide range of services related to the operation and maintenance of buildings and other facilities. For a contract of this magnitude, valued at nearly $9 billion, the scope likely includes comprehensive services such as facility management, maintenance and repair (HVAC, plumbing, electrical), janitorial services, groundskeeping, security, waste management, and potentially even specialized services like pest control or energy management. The 'full and open competition' award type suggests that KBR Services likely proposed a robust package covering many, if not all, of these areas to meet the extensive requirements of the Department of Defense across multiple installations.
What does the 'Delivery Order' (AW) designation imply about the contract's structure and KBR Services' role?
The 'Delivery Order' (AW) designation, in conjunction with the base contract, indicates that this is a task order issued under a larger indefinite-delivery/indefinite-quantity (IDIQ) or similar type of contract vehicle. This means that the $8.9 billion figure likely represents the total value of this specific task order, which could be one of many issued under the parent contract. KBR Services, as the awardee, is responsible for fulfilling the specific requirements outlined in this delivery order, which could involve providing facilities support services at designated locations over the specified period. This structure allows the government flexibility to order services as needed, up to the ceiling value of the order.
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
Financial Breakdown
Contract Ceiling: $8,949,368,389
Exercised Options: $8,949,368,389
Current Obligation: $8,949,368,389
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
Start Date: 2008-09-24
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 12:09:00
Last Modified: 2025-07-31
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