DoD's $11.8M contract for equipment maintenance awarded to NATO agency, raising questions on competition and value

Contract Overview

Contract Amount: $11,877,968 ($11.9M)

Contractor: Nato Support and Procurement Agency

Awarding Agency: Department of Defense

Start Date: 2001-09-22

End Date: 2012-02-12

Contract Duration: 3,795 days

Daily Burn Rate: $3.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST SHARING

Sector: Defense

Official Description: 200112!002787!2100!JA22 !WIESBADEN REGIONAL CONTRNG. CTR.!DAJA3791H5011 !A!N!*!N!0027 !20010922!20010930!400580262!400580262!400580262!N!NATO MAINTENANCE AND SUPPLY AG!RUE DE LA GARE 11 !CAP !LU!8325 !* !* !LU!* !* !LUXEMBOURG!+000001332231!N!N!000000000000!J028!MAINT & REPAIR OF EQ/ENGINES, TURBINES & COMPS !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !336992!*!*!4! ! !C!*!*!*!B!*!*!N!Z!A !N!S!2!003!A! !Z!N!Z!B !LU!N!L!U! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Plain-Language Summary

Department of Defense obligated $11.9 million to NATO SUPPORT AND PROCUREMENT AGENCY for work described as: 200112!002787!2100!JA22 !WIESBADEN REGIONAL CONTRNG. CTR.!DAJA3791H5011 !A!N!*!N!0027 !20010922!20010930!400580262!400580262!400580262!N!NATO MAINTENANCE AND SUPPLY AG!RUE DE LA GARE 11 !CAP !LU!8325 !* !* !LU!* !* !LUXEMBOURG!+000001332231!N!N!000000000000!J028!MAINT & REPAIR OF… Key points: 1. Contract awarded to a non-US entity for maintenance services. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. Long contract duration of nearly 11 years may indicate a need for ongoing support. 4. The contract type, Cost Sharing, can lead to unpredictable final costs. 5. Lack of detailed performance metrics makes assessing value for money challenging. 6. The specific equipment or engines serviced are not clearly defined, hindering detailed analysis.

Value Assessment

Rating: questionable

The total value of $11.8M over nearly 11 years averages to approximately $1.08M annually. Without specific details on the equipment or services rendered, it is difficult to benchmark this against similar contracts. The 'Cost Sharing' contract type suggests that the government reimburses the contractor for allowable costs plus a fee, which can lead to less predictable spending and potentially higher costs if not managed tightly. The lack of a clear per-unit cost makes direct comparison difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' indicating that a full and open competition was not conducted. This suggests that only one or a limited number of sources were considered. The specific reasons for this limitation are not detailed in the provided data. Limited competition typically results in less price pressure and can lead to higher costs for the government compared to contracts that undergo robust competitive bidding.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding. Without multiple offers, the government had less leverage to negotiate the best possible price for these maintenance services.

Public Impact

The primary beneficiary is the NATO Support and Procurement Agency, a multinational organization. Services include maintenance and repair of equipment, specifically engines, turbines, and components. The geographic impact is likely centered around areas where the Department of the Army operates and utilizes the specified equipment. Workforce implications are unclear, but the contract supports the operational readiness of military equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in suboptimal pricing.
Cost Sharing contract type introduces cost uncertainty and potential for overruns.
Lack of detailed service descriptions hinders performance and value assessment.
Award to a foreign entity for essential maintenance could pose logistical or strategic risks.

Positive Signals

Contract supports critical maintenance for military equipment, ensuring operational readiness.
Award to a NATO agency aligns with intergovernmental cooperation and burden-sharing within the alliance.
Long-term nature of the contract suggests a sustained need and potentially stable support.

Sector Analysis

This contract falls within the broader defense sector, specifically focusing on maintenance, repair, and overhaul (MRO) services for military equipment. The MRO market is substantial, with governments being major clients. This contract's value of $11.8M over nearly 11 years is moderate within the context of large defense contracts. Comparable spending benchmarks would typically involve analyzing MRO contracts for similar types of equipment across different military branches or allied nations.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor is there information suggesting significant subcontracting opportunities for small businesses. The award to a large multinational agency further suggests that small business participation was likely minimal or non-existent. This contract does not appear to actively contribute to the small business ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract are not explicitly detailed in the provided data. However, as a Department of Defense contract, it would fall under the purview of the Department of Defense Inspector General for audits and investigations. Transparency is limited due to the lack of detailed public information regarding the specific services, performance metrics, and the justification for limited competition.

Related Government Programs

Department of Defense Maintenance and Repair Contracts
NATO Support and Procurement Agency Contracts
Equipment and Engine Maintenance Services
Turbine and Component Repair Contracts

Risk Flags

Limited Competition
Cost Sharing Contract Type
Lack of Specific Service Details
Award to Foreign Entity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to NATO SUPPORT AND PROCUREMENT AGENCY. 200112!002787!2100!JA22 !WIESBADEN REGIONAL CONTRNG. CTR.!DAJA3791H5011 !A!N!*!N!0027 !20010922!20010930!400580262!400580262!400580262!N!NATO MAINTENANCE AND SUPPLY AG!RUE DE LA GARE 11 !CAP !LU!8325 !* !* !LU!* !* !LUXEMBOURG!+000001332231!N!N!000000000000!J028!MAINT & REPAIR OF EQ/ENGINES, TURBINES & COMPS !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !336992!*!*!4! ! !C!*!*!*!B!*!*!N!Z!A !N!S!2!003!A! !Z!N!Z!B !LU!N!L!U! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Who is the contractor on this award?

The obligated recipient is NATO SUPPORT AND PROCUREMENT AGENCY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.9 million.

What is the period of performance?

Start: 2001-09-22. End: 2012-02-12.

What specific types of equipment or engines were covered under this maintenance contract?

The provided data broadly categorizes the service as 'MAINT & REPAIR OF EQ/ENGINES, TURBINES & COMPS'. This indicates the contract covered the maintenance and repair of various equipment, with a specific mention of engines, turbines, and their components. However, the exact make, model, or type of these engines and components are not specified. This lack of specificity makes it challenging to assess the complexity of the work, compare pricing to industry standards for particular equipment, or evaluate the contractor's specialized expertise beyond general maintenance capabilities.

How does the annual average cost of this contract compare to similar maintenance contracts for military equipment?

The contract's total value is $11.8M over a period of 3795 days, which is approximately 10.4 years. This results in an average annual cost of roughly $1.13M. Benchmarking this figure is difficult without knowing the specific types of equipment being maintained. Maintenance costs vary significantly based on the complexity, age, and criticality of the equipment. For instance, maintaining advanced jet engines would be far more expensive than maintaining simpler ground vehicle components. The 'Cost Sharing' nature of the contract also complicates direct comparisons, as the final reimbursed amount could fluctuate.

What are the potential risks associated with awarding a maintenance contract to a non-US entity like the NATO Support and Procurement Agency?

Awarding maintenance contracts to non-US entities can introduce several risks. These may include potential delays in service delivery due to logistical challenges, differing regulatory environments, or geopolitical factors. There could also be concerns regarding the security of sensitive technology or data if the maintenance involves classified systems. Furthermore, oversight and accountability might be more complex compared to contracts with domestic firms. However, in this case, the award to a NATO agency suggests a framework for intergovernmental cooperation, which might mitigate some risks through established protocols and shared objectives within the alliance.

What performance metrics or quality standards were likely used to evaluate the contractor's service delivery?

The provided data does not specify the performance metrics or quality standards for this contract. Typically, maintenance contracts include metrics such as turnaround time for repairs, adherence to technical specifications, equipment uptime post-maintenance, and defect rates. Given the 'Cost Sharing' nature, robust performance monitoring would be crucial to ensure value for money. Without explicit details, it's presumed that standard military maintenance protocols and quality assurance procedures were applied, overseen by the contracting agency.

What was the justification for awarding this contract on a 'NOT AVAILABLE FOR COMPETITION' basis?

The data explicitly states the contract was 'NOT AVAILABLE FOR COMPETITION'. This designation typically implies that only one source is capable of fulfilling the requirement, or that a compelling reason exists to limit competition, such as urgent and unforeseen needs, or specific interoperability requirements with existing systems that only one entity can meet. Without further documentation, the precise justification remains unclear. This limited competition raises concerns about whether the government secured the most advantageous pricing and terms possible.

How has spending on equipment maintenance evolved within the Department of the Army or similar defense agencies over the period of this contract?

The contract spanned from September 2001 to February 2012. During this period, the Department of Defense, including the Army, experienced significant increases in operational tempo due to conflicts in Afghanistan and Iraq. This often led to increased demand for maintenance and repair services to sustain aging fleets and equipment. Overall defense spending also rose substantially during this era. While specific figures for Army equipment maintenance spending are not provided here, it's reasonable to infer that demand and associated costs likely increased during this timeframe due to operational demands and the need to maintain readiness.

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: COST SHARING (T)

Contractor Details

Address: RUE DE LA GARE 11, CAPELLEN

Business Categories: Category Business, Foreign Owned, International Organization, Nonprofit Organization, Not Designated a Small Business, Special Designations

Contract Characteristics

Cost or Pricing Data: NO

Timeline