DoD's $571M contract with EC III, L.L.C. for services in Arizona, awarded in 1999

Contract Overview

Contract Amount: $570,936,990 ($570.9M)

Contractor: EC III, L.L.C.

Awarding Agency: Department of Defense

Start Date: 1999-10-28

End Date: 2009-02-28

Contract Duration: 3,411 days

Daily Burn Rate: $167.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Place of Performance

Location: YUMA, YUMA County, ARIZONA, 85365

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $570.9 million to EC III, L.L.C. for work described as: Key points: 1. The contract's significant value suggests a long-term, critical need for the services provided. 2. Awarded under full and open competition, indicating a broad market search. 3. The Cost Plus Award Fee (CPA) structure incentivizes performance but requires robust oversight to manage costs. 4. A duration of 3411 days (over 9 years) points to a stable, ongoing requirement. 5. The contract's geographic focus on Arizona may indicate specific regional operational needs. 6. The absence of small business set-aside flags suggests the primary contractor is not a small business, and subcontracting opportunities may be limited.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without knowing the specific services rendered. However, a nearly $571 million award over nine years represents a substantial investment. The Cost Plus Award Fee (CPA) structure, while common for complex services, can lead to higher final costs if not managed tightly. Without detailed performance metrics and cost breakdowns, it's difficult to definitively assess value for money, but the long duration and significant funding suggest a perceived need that justified the expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that the Department of Defense sought proposals from all responsible sources. This approach typically fosters a competitive environment, potentially leading to better pricing and innovative solutions. The fact that it was competed broadly is a positive indicator for price discovery and market responsiveness.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple bidders to offer their best prices and terms, potentially reducing overall program costs.

Public Impact

The Department of Defense benefits through the provision of essential services supporting its operations. Services delivered likely contribute to military readiness and operational capabilities within the specified region. The geographic impact is concentrated in Arizona, potentially supporting local military installations or related activities. Workforce implications may include direct employment by EC III, L.L.C. and its subcontractors, as well as indirect economic benefits in the Arizona region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost overruns are a potential risk with Cost Plus Award Fee contracts if performance targets are not clearly defined or if contractor costs are not rigorously scrutinized.
The long contract duration could lead to scope creep or a lack of agility if requirements change significantly over time.
Lack of transparency regarding specific performance metrics and award fee determinations could obscure true value for money.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The significant duration suggests a stable, long-term requirement that the contractor has successfully met to date.
The Cost Plus Award Fee structure, when managed effectively, can drive high performance and achieve desired outcomes.

Sector Analysis

This contract falls within the broad professional, scientific, and technical services sector, often supporting government operations and logistics. The market for such services is large and competitive, with many firms capable of providing specialized support. The significant dollar value and long duration indicate this contract represents a substantial portion of spending within its specific niche, potentially for specialized defense support functions.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. This suggests that the primary focus was on securing the best overall solution, potentially from larger, established firms. Subcontracting opportunities for small businesses may exist but are not explicitly mandated by the contract's award structure. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Cost Plus Award Fee (CPA) structure necessitates strong oversight from the contracting officer and their team to monitor costs, evaluate performance against award criteria, and ensure fair and reasonable pricing. Transparency in reporting performance metrics and award fee decisions is crucial for accountability. The Department of Defense typically has established oversight mechanisms, including contract audit agencies and potentially Inspector General reviews, to ensure compliance and prevent waste.

Related Government Programs

Defense Logistics Agency Contracts
Department of the Army Service Contracts
Professional, Scientific, and Technical Services

Risk Flags

Long contract duration may reduce flexibility.
CPA structure requires diligent oversight to control costs.
Specific services not detailed, hindering precise value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $570.9 million to EC III, L.L.C.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is EC III, L.L.C..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $570.9 million.

What is the period of performance?

Start: 1999-10-28. End: 2009-02-28.

What specific services were provided under this contract?

The provided data does not specify the exact services rendered under contract number DCA. However, given the awarding agency (Department of the Army) and the contract type (Cost Plus Award Fee), it is highly probable that the services were complex, performance-based, and required specialized expertise. These could range from base operations support, technical services, logistics, maintenance, or specialized consulting. The significant duration and value suggest a critical and ongoing need for these services, likely supporting military readiness or operational infrastructure within Arizona.

How does the $571 million value compare to similar contracts for defense services in Arizona?

Comparing the $571 million value requires context on the specific services. If this contract covered broad base operations or extensive technical support over nine years, the value might be within a reasonable range for a large-scale defense requirement in a significant state like Arizona. However, without knowing the precise scope, it's difficult to benchmark accurately. Defense spending in Arizona is substantial, supporting numerous installations. A contract of this magnitude would likely represent a significant portion of a specific functional area's budget, and comparisons would ideally be made against contracts for identical or highly similar services.

What are the primary risks associated with a Cost Plus Award Fee (CPA) contract of this magnitude and duration?

The primary risks with a CPA contract of this scale ($571M over 9 years) include potential cost overruns if the award fee criteria are not stringent or if contractor costs are not meticulously monitored. There's also a risk of 'fee chasing,' where contractors focus on meeting award fee targets rather than optimizing overall value or efficiency. For long-duration contracts, maintaining flexibility to adapt to changing requirements can be challenging, potentially leading to scope creep or outdated service delivery. Ensuring robust government oversight and clear, measurable performance metrics is critical to mitigating these risks and ensuring the taxpayer receives good value.

What does the 'full and open competition' designation imply for the contractor selection and pricing?

The 'full and open competition' designation signifies that the Department of the Army solicited proposals from all responsible sources, allowing for the widest possible range of potential contractors to bid. This process is designed to foster a competitive environment, which typically leads to more favorable pricing, better quality, and innovative solutions for the government. It implies that the agency did not restrict the competition to specific types of businesses or use sole-source justifications, suggesting that EC III, L.L.C. was selected based on a competitive evaluation of multiple proposals, likely considering both technical merit and cost.

What is the historical spending pattern for similar services by the Department of the Army in Arizona?

Historical spending patterns for similar services by the Department of the Army in Arizona are not detailed in the provided data. However, Arizona hosts significant Army installations like Fort Huachuca and the Yuma Proving Ground, which require substantial support services. Contracts for base operations, maintenance, IT, and specialized training are common. A $571 million contract over nine years suggests a consistent and significant need for the services provided by EC III, L.L.C., aligning with the general pattern of substantial defense service contracting in states with large military presences.

What is the significance of the contract being awarded in 1999 and ending in 2009?

The award date of October 28, 1999, and an end date of February 28, 2009, indicate this was a long-term contract spanning over nine years (3411 days). This duration suggests that the services were critical, stable, and required a sustained commitment, rather than a short-term or project-specific need. For the contractor, it provided a predictable revenue stream. For the agency, it offered stability in service delivery. However, such long durations also necessitate careful management to ensure the contract remains relevant and cost-effective throughout its term, especially given potential technological or operational changes over that decade.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Address: 4841 TRAMWAY RIDGE DR NE, ALBUQUERQUE, NM, 01

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline