Defense Logistics Agency awarded $1.19B for engineering services, with a 20-year contract duration

Contract Overview

Contract Amount: $11,931,849 ($11.9M)

Contractor: Willbros Engineers, Inc

Awarding Agency: Department of Defense

Start Date: 1998-12-01

End Date: 2018-11-30

Contract Duration: 7,304 days

Daily Burn Rate: $1.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200611!006134!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060098D5880 !A!N! !Y!B001 !29 !20060207!20131130!046696568!186686002!853675270!N!WILLBROS GOVERNMENT SERVICES, !2087 E 71ST ST STE 101 !TULSA !OK!74136!04260!031!37!BEAUFORT !CARTERET !N CAROLINA!+000000012979!N!N!000000000000!M173!OPERATION/FUEL STORAGE BUILDINGS !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !3!A!S!C! ! !99990909!B! ! !B! !A!U!J!2!007!B! !C!N!Z! ! !Y!C!N! ! ! !A!A!A!A!000!A!A!N! ! ! ! ! ! !0001! !

Place of Performance

Location: FORT BRAGG, CUMBERLAND County, NORTH CAROLINA, 28310

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $11.9 million to WILLBROS ENGINEERS, INC for work described as: 200611!006134!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060098D5880 !A!N! !Y!B001 !29 !20060207!20131130!046696568!186686002!853675270!N!WILLBROS GOVERNMENT SERVICES, !2087 E 71ST ST STE 101 !TULSA !OK!74136!04260!031!37!BEAUFORT !CART… Key points: 1. Contract value of $1.19B over 20 years suggests a long-term strategic need for engineering services. 2. Full and open competition indicates a broad market solicitation, potentially leading to competitive pricing. 3. The contract's duration of 20 years presents a long-term risk for price escalation and service relevance. 4. Engineering services are critical for maintaining and upgrading defense infrastructure. 5. The contract falls under the 'Engineering Services' NAICS code, a common category for defense support. 6. The firm fixed-price contract type shifts cost overrun risk to the contractor.

Value Assessment

Rating: good

The total contract value of $1.19 billion over 20 years averages to approximately $59.5 million per year. This figure needs to be benchmarked against similar long-term, large-scale engineering support contracts for defense infrastructure. Without specific comparable data, it's difficult to definitively assess value for money. However, the firm fixed-price nature suggests a degree of cost certainty for the government, provided the scope remains stable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The data indicates two bids were received. While two bidders participated, the level of competition might be considered moderate for a contract of this magnitude and duration. A higher number of bidders could potentially drive prices lower, but the specific nature of specialized engineering services might limit the pool of qualified contractors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible price and quality through a wide solicitation. However, with only two bids, the potential for significant cost savings might be constrained compared to a more robustly competed contract.

Public Impact

The primary beneficiaries are the Department of Defense and its various installations requiring engineering support. Services delivered include engineering expertise for operations and fuel storage buildings, crucial for military readiness. The geographic impact is likely widespread across Department of Defense facilities, particularly those managed by the Defense Logistics Agency. The contract supports a workforce of engineers and technical specialists, contributing to employment in the engineering sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (20 years) increases the risk of price increases due to inflation or market shifts.
Potential for scope creep over a two-decade period, leading to increased costs if not managed tightly.
Dependence on a single contractor for critical engineering services over an extended period could reduce flexibility.
The limited number of bidders (2) might indicate a concentrated market or high barriers to entry, potentially impacting long-term competition.
Firm fixed-price contracts can be problematic if unforeseen technical challenges arise, potentially leading to disputes or change orders.

Positive Signals

Firm fixed-price contract structure provides cost certainty for the government, assuming scope is well-defined.
Full and open competition suggests an effort to achieve competitive pricing and access a broad range of capabilities.
The long duration allows for stable planning and consistent service delivery for critical infrastructure.
The contractor, Willbros Government Services, has a track record in government contracting, implying some level of established capability.
The contract supports essential defense infrastructure, contributing to national security objectives.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense infrastructure. The Engineering Services sector is a significant part of the broader professional, scientific, and technical services industry. Spending in this area is often driven by government needs for infrastructure development, maintenance, and modernization. Comparable spending benchmarks would involve analyzing other large, long-term engineering support contracts awarded by federal agencies, particularly within the Department of Defense, for similar types of facilities and services.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false) and there is no specific mention of subcontracting plans for small businesses (sb: false). This suggests that the primary award went to a large business, and there may be limited direct opportunities for small businesses through this specific contract vehicle, unless the prime contractor voluntarily engages them for subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Defense Logistics Agency. Accountability measures are embedded in the firm fixed-price structure and performance requirements outlined in the contract. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Infrastructure Modernization Programs
Military Construction Projects
Logistics and Readiness Support Contracts
Base Operations Support Contracts
Energy Infrastructure Support Services

Risk Flags

Long contract duration may increase risk of price escalation and technological obsolescence.
Limited number of bidders could indicate market concentration and reduced competitive pressure.
Potential for scope creep over a 20-year period.
Dependence on a single contractor for critical services over an extended timeframe.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to WILLBROS ENGINEERS, INC. 200611!006134!97AS!SP0600!DEFENSE ENERGY SUPPORT CENTER !SP060098D5880 !A!N! !Y!B001 !29 !20060207!20131130!046696568!186686002!853675270!N!WILLBROS GOVERNMENT SERVICES, !2087 E 71ST ST STE 101 !TULSA !OK!74136!04260!031!37!BEAUFORT !CARTERET !N CAROLINA!+000000012979!N!N!000000000000!M173!OPERATION/FUEL STORAGE BUILDINGS !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !3!A!S!C! ! !999

Who is the contractor on this award?

The obligated recipient is WILLBROS ENGINEERS, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $11.9 million.

What is the period of performance?

Start: 1998-12-01. End: 2018-11-30.

What is the historical spending pattern for engineering services related to operations and fuel storage buildings by the Defense Logistics Agency?

Analyzing historical spending patterns for similar services by the Defense Logistics Agency (DLA) is crucial for context. While this specific contract represents a significant $1.19 billion commitment over 20 years, understanding prior DLA expenditures on engineering for fuel storage and operational facilities can reveal trends. For instance, have there been previous large, long-term contracts, or is this an increase in investment? Examining spending over the last 5-10 years, broken down by contract type and scope, would indicate whether this award is an anomaly or part of a sustained strategic focus. It would also help in benchmarking the annual average expenditure of approximately $59.5 million against historical norms to assess if it represents a fair market price or a potential escalation.

How does the $1.19 billion contract value compare to other large-scale engineering services contracts awarded by the Department of Defense in recent years?

Comparing the $1.19 billion contract value to other large-scale engineering services contracts awarded by the Department of Defense (DoD) provides essential benchmarking. For example, contracts for base realignment and closure (BRAC) support, major construction projects, or extensive facilities management often run into hundreds of millions or billions of dollars. Analyzing the scope, duration, and specific services offered in comparable DoD contracts helps determine if this award is within the expected range. If similar 20-year contracts for specialized engineering services are rare, it might warrant further investigation into the necessity of such a long commitment. Conversely, if it aligns with other major infrastructure investments, it suggests a standard approach to long-term asset management within the DoD.

What are the specific risks associated with a 20-year firm fixed-price contract for engineering services, particularly concerning technological obsolescence and changing regulatory environments?

A 20-year firm fixed-price contract for engineering services carries inherent risks, especially concerning technological obsolescence and evolving regulatory landscapes. Over two decades, technologies related to fuel storage, operations, and engineering methodologies can become outdated. If the contract doesn't include mechanisms for incorporating new technologies or adapting to updated environmental or safety regulations, the government might end up paying for services or systems that are no longer optimal or compliant. The fixed-price nature means the contractor is incentivized to maintain the current scope, potentially resisting costly upgrades unless explicitly mandated by change orders, which can lead to price increases. Conversely, the government bears the risk if unforeseen technological advancements or regulatory changes necessitate significant modifications not covered by the original agreement.

What is the track record of Willbros Government Services, Inc. in managing large, long-term federal contracts, particularly within the defense sector?

Assessing the track record of Willbros Government Services, Inc. (or its predecessor/related entities like Willbros Engineers, Inc.) is vital for understanding their capability to execute this $1.19 billion, 20-year contract. Researching their past performance on similar large-scale engineering and construction contracts, especially for the Department of Defense or other federal agencies, is key. This includes examining past performance reviews, any history of contract disputes, cost overruns, or schedule delays. Understanding their experience with firm fixed-price contracts of this magnitude and duration, and their ability to manage complex projects involving fuel storage and operational facilities, provides insight into their reliability and potential risks associated with this award.

Given the 'full and open competition' and only two bids, what does this imply about the market concentration for specialized defense engineering services?

The fact that this significant $1.19 billion, 20-year contract for specialized defense engineering services attracted only two bids under full and open competition suggests a potentially concentrated market. This could indicate high barriers to entry, such as specialized expertise, significant bonding requirements, extensive security clearances, or a limited number of firms possessing the necessary qualifications and capacity. Market concentration can have implications for long-term pricing, as fewer competitors may reduce the pressure to offer the most aggressive bids. It also raises questions about the sustainability of competition over the contract's 20-year lifespan. If the market is indeed concentrated, the Defense Logistics Agency might need to explore strategies to encourage new entrants or foster competition among existing players to ensure value for money throughout the contract term.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060097R0135

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Willbros Global Holding Inc

Address: 2087 E 71ST ST STE 100, TULSA, OK, 74136

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,931,849

Exercised Options: $11,931,849

Current Obligation: $11,931,849

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP060098D5880

IDV Type: IDC

Timeline