State Department awards $2.3B facilities support contract to Xator LLC over 3 years

Contract Overview

Contract Amount: $2,326,916,907 ($2.3B)

Contractor: Xator LLC

Awarding Agency: Department of State

Start Date: 2023-03-01

End Date: 2026-02-28

Contract Duration: 1,095 days

Daily Burn Rate: $2.1M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CARE LOGISTICAL SUPPORT SERVICES - CLSS

Plain-Language Summary

Department of State obligated $2.33 billion to XATOR LLC for work described as: CARE LOGISTICAL SUPPORT SERVICES - CLSS Key points: 1. Contract value represents significant investment in facilities support services. 2. Full and open competition suggests a potentially competitive bidding process. 3. Contract duration of three years allows for sustained service delivery. 4. Fixed-price contract type shifts performance risk to the contractor. 5. The award is a major win for Xator LLC in the facilities support sector. 6. Facilities Support Services (NAICS 561210) is a broad category encompassing many operational needs.

Value Assessment

Rating: good

The total contract value of $2.33 billion over three years averages to approximately $775 million annually. Benchmarking this against similar large-scale facilities support contracts is challenging without more specific service details. However, the firm-fixed-price structure suggests that the government has negotiated a set price for the defined scope of work, which can be advantageous if the contractor manages costs effectively. The absence of specific performance metrics or cost breakdowns makes a definitive value-for-money assessment difficult at this stage, but the competitive nature of the award implies a degree of price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a robust bidding environment, potentially leading to better pricing and service offerings for the government. The number of bidders is not specified, but the use of full and open competition suggests a significant number of interested parties participated, aiming to secure this substantial contract.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and encourages a wider pool of contractors to vie for government business, driving down costs.

Public Impact

The Department of State benefits from comprehensive facilities support services, ensuring operational continuity and security. Services likely include maintenance, repair, security, and logistical support for government facilities. The geographic impact is likely global, supporting State Department operations worldwide. Workforce implications include potential job creation for facilities management and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if contractor's fixed price does not adequately account for unforeseen operational challenges.
Dependence on a single contractor for critical facilities support could pose a risk if performance falters.
Scope creep could lead to increased costs if not managed tightly within the fixed-price framework.

Positive Signals

Firm-fixed-price contract shifts cost control responsibility to the contractor.
Full and open competition suggests a competitive environment that should drive efficiency.
Long-term nature of the contract allows for stable service provision and potential for economies of scale.
Award to an established entity like Xator LLC may indicate a track record of successful service delivery.

Sector Analysis

Facilities Support Services (NAICS 561210) is a broad category within the professional, scientific, and technical services sector. This sector is characterized by a wide range of service providers, from large conglomerates to specialized firms. Contracts in this space often involve managing and maintaining complex physical infrastructures, including buildings, grounds, and related systems. The market size for facilities management is substantial, driven by government and commercial entities requiring reliable operational support. This contract represents a significant portion of spending within this specific service category for the Department of State.

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 for small businesses mandated by a set-aside. However, the prime contractor, Xator LLC, may choose to subcontract portions of the work to small businesses as part of its overall business strategy or to meet broader socioeconomic goals, though this is not explicitly detailed in the provided information.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of State's contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and managing any modifications or disputes. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

General Services Administration (GSA) Federal Buildings Fund
Department of Defense Facilities Maintenance Contracts
Department of Homeland Security Facilities Management
Department of Justice Facilities Operations

Risk Flags

Large contract value requires robust oversight.
Firm-fixed-price can lead to performance trade-offs if not managed.
Global service delivery introduces logistical and security complexities.
Contractor's capacity to manage such a large-scale, long-term contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $2.33 billion to XATOR LLC. CARE LOGISTICAL SUPPORT SERVICES - CLSS

Who is the contractor on this award?

The obligated recipient is XATOR LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $2.33 billion.

What is the period of performance?

Start: 2023-03-01. End: 2026-02-28.

What is Xator LLC's track record with the Department of State and other federal agencies for similar facilities support contracts?

Xator LLC has a history of providing security, logistics, and facilities support services to various government agencies, including the Department of State. Their contract portfolio often includes base operations support, perimeter security, and logistical management. Analyzing their past performance on similar contracts, particularly those with the Department of State, would involve reviewing past performance evaluations (e.g., CPARS reports), contract modifications, and any documented disputes or challenges. A review of publicly available data suggests Xator has been awarded numerous contracts for security and support services, indicating a significant presence in this market. Further investigation into the scale and complexity of their previous State Department contracts would be necessary to fully assess their suitability for this $2.3 billion award.

How does the $2.33 billion contract value compare to historical spending on facilities support by the Department of State?

The $2.33 billion awarded to Xator LLC represents a substantial, multi-year investment in facilities support services for the Department of State. To contextualize this, one would need to examine the Department's historical spending trends for similar services (NAICS 561210 or comparable categories) over the past 5-10 years. This would involve analyzing annual budget allocations and actual expenditures for facilities management, maintenance, security, and logistics. If this single contract significantly exceeds or represents a major shift from previous aggregated spending on these services, it could indicate an expansion of services, a consolidation of multiple previous contracts, or a change in procurement strategy. Without historical spending data specific to the Department of State's facilities support, it's difficult to definitively state how this award compares, but its magnitude suggests a significant commitment.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how will they be monitored?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. Typically, for a facilities support services contract of this magnitude, KPIs would likely include metrics related to response times for maintenance requests, uptime of critical building systems (e.g., HVAC, power), security incident response rates, cleanliness standards, and overall customer satisfaction. SLAs would define the acceptable performance thresholds for these KPIs. Monitoring would be conducted by the Department of State's contracting officer's representatives (CORs) through regular performance reviews, site inspections, data reporting by the contractor, and potentially through third-party audits. The effectiveness of oversight hinges on clearly defined, measurable KPIs and robust monitoring mechanisms.

What is the risk profile of this contract, considering its large value, long duration, and the nature of facilities support services?

The risk profile for this $2.33 billion, three-year contract is multifaceted. Key risks include: 1) Performance Risk: Ensuring Xator LLC consistently delivers high-quality services across potentially numerous global locations. Failures in maintenance, security, or logistics could have significant operational impacts. 2) Cost Risk: Although a firm-fixed-price contract, unforeseen global events, inflation, or complex operational challenges could strain the contractor's ability to maintain profitability without impacting service quality or seeking contract modifications. 3) Security Risk: Given the nature of supporting government facilities, security vulnerabilities or breaches related to contractor personnel or systems pose a significant risk. 4) Contractor Viability Risk: The long duration and large value mean the financial stability and operational capacity of Xator LLC are critical. Mitigation strategies would involve strong government oversight, clear performance standards, robust security protocols, and contingency planning.

How does the firm-fixed-price (FFP) contract type influence the allocation of risk and potential for cost savings or overruns?

The firm-fixed-price (FFP) contract type places the primary responsibility for cost control and management on the contractor, Xator LLC. This means that the contractor assumes the risk of cost overruns; if their actual costs exceed the negotiated price, their profit margin will decrease, or they may incur a loss. Conversely, if they can perform the work more efficiently than anticipated, they will realize a higher profit. For the government, an FFP contract provides cost certainty, as the total price is fixed. This structure incentivizes the contractor to be efficient and innovative in their service delivery to maximize profit. However, it can also lead to potential issues if the initial price was too high due to inadequate competition or if the scope is not precisely defined, potentially leading to disputes or a reluctance by the contractor to perform work outside the narrowly defined scope.

What specific types of facilities support services are encompassed within this contract, and are they standardized across all locations?

The provided data identifies the contract under NAICS code 561210, Facilities Support Services, which is a broad category. Specific services typically include a range of activities such as building operations and maintenance (HVAC, electrical, plumbing), custodial services, groundskeeping, pest control, security services (guard forces, access control), mailroom operations, transportation services, and potentially minor repairs and renovations. It is unlikely that the services are entirely standardized across all locations, especially given the global footprint of the Department of State. Different facilities will have unique requirements based on their size, age, location, security needs, and environmental conditions. The contract likely outlines a core set of services applicable globally, with specific task orders or appendices detailing variations and additional requirements for individual posts or facilities.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SAQMMA16R0106

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Parsons Corporation

Address: 1835 ALEXANDER BELL DR STE 210, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,866,737,346

Exercised Options: $2,866,737,346

Current Obligation: $2,326,916,907

Actual Outlays: $291,496,364

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $112,888,125

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19AQMM19D0119

IDV Type: IDC

Timeline