Army awards $1.14B for Kwajalein Range Services, supporting missile and space systems development

Contract Overview

Contract Amount: $1,693,299,989 ($1.7B)

Contractor: Kwajalein Range Services, LLC

Awarding Agency: Department of Defense

Start Date: 2002-09-25

End Date: 2019-04-30

Contract Duration: 6,061 days

Daily Burn Rate: $279.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200212!003208!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6002C0074 !A!N! !Y! !20020925!20061231!114353365!114353365!114353365!N!KWAJALEIN RANGE SERVICES, LLC !4975 BRADFORD DR , SUITE 3!HUNTSVILLE !AL!35807!30000!150!68!YONA !KWAJALEIN !MARSHALL I!+000002000000!N!N!000000000000!AD26!RDTE/SERVICES-MANAGEMENT SUPPORT !A2 !MISSILE AND SPACE SYSTEMS !1000!NOT DISCERNABLE OR CLASSIFIED !561210!E! !3! ! ! ! ! !99990909!B! ! !B! !A!Y!R!2!003!B! !Z!Y!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $1.69 billion to KWAJALEIN RANGE SERVICES, LLC for work described as: 200212!003208!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6002C0074 !A!N! !Y! !20020925!20061231!114353365!114353365!114353365!N!KWAJALEIN RANGE SERVICES, LLC !4975 BRADFORD DR , SUITE 3!HUNTSVILLE !AL!35807!30000!150!68!YONA !KWAJA… Key points: 1. Contract provides essential facilities support services for critical defense research and development. 2. Long-term contract duration suggests a stable, ongoing need for these specialized services. 3. Awarded as a definitive contract, indicating a firm commitment to service provision. 4. The cost-plus-award-fee structure incentivizes performance while managing costs. 5. Services are crucial for testing and evaluation of missile and space systems. 6. Contractor has a significant role in maintaining vital national security infrastructure.

Value Assessment

Rating: good

The total award amount of $1.14 billion over approximately 15 years represents a substantial investment in maintaining critical testing facilities. While specific cost breakdowns are not provided, the cost-plus-award-fee (CPAF) structure allows for flexibility and incentivizes contractor performance. Benchmarking this against similar large-scale, long-term support contracts for specialized R&D facilities is challenging due to the unique nature of the Kwajalein Atoll operations. However, the extended duration and scope suggest a fair valuation for the services rendered, assuming performance targets are met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of multiple bidders generally fosters a competitive environment, which can lead to better pricing and service quality for the government. The specific number of bidders is not detailed, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value by allowing a wide range of contractors to compete, driving down costs and improving service delivery.

Public Impact

Benefits the U.S. Department of Defense, specifically agencies involved in missile and space systems research, development, testing, and evaluation. Delivers essential facilities support services, including operations, maintenance, and logistics, at the Reagan Test Site on Kwajalein Atoll. Geographic impact is concentrated on the Kwajalein Atoll in the Marshall Islands, a unique and vital location for strategic testing. Workforce implications include employment opportunities for specialized technical, operational, and support personnel both locally and potentially in the U.S.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to complacency if not actively managed.
Reliance on a single contractor for critical infrastructure at a remote location poses logistical risks.
Cost-plus-award-fee contracts can sometimes lead to cost overruns if not closely monitored.

Positive Signals

Contractor's established presence and experience at Kwajalein likely ensure continuity of operations.
Full and open competition suggests a competitive process that should yield good value.
The award fee component incentivizes high performance and efficiency.
The definitive contract structure provides stability for essential services.

Sector Analysis

This contract falls within the Facilities Support Services sector, specifically supporting research, development, testing, and evaluation (RDT&E) activities. The Reagan Test Site at Kwajalein Atoll is a unique and critical national asset for strategic missile defense and space exploration programs. Spending in this niche sector is often characterized by long-term, high-value contracts due to the specialized infrastructure and operational requirements. Comparable spending benchmarks are difficult to establish due to the singular nature of the Kwajalein facility.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the scale and specialized nature of the services required at Kwajalein, it is likely that the prime contractor, Kwajalein Range Services, LLC, would subcontract portions of the work. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting agency, the Department of the Army, and potentially the Department of Defense's Inspector General. The cost-plus-award-fee structure necessitates robust oversight to ensure that costs are reasonable and that award fees are justified based on performance metrics. Transparency is generally maintained through contract reporting mechanisms, though specific operational details at Kwajalein may be sensitive.

Related Government Programs

Missile Defense Agency (MDA) Programs
Space Surveillance and Tracking Systems
National Range and Test Facility Support
Department of Defense R&D Infrastructure
Pacific Missile Range Facility (PMRF) Operations

Risk Flags

Potential for cost overruns in CPAF structure.
Logistical challenges due to remote location.
Risk of technological obsolescence over long contract duration.
Dependence on a single contractor for critical infrastructure.
Personnel retention challenges in an isolated environment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.69 billion to KWAJALEIN RANGE SERVICES, LLC. 200212!003208!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6002C0074 !A!N! !Y! !20020925!20061231!114353365!114353365!114353365!N!KWAJALEIN RANGE SERVICES, LLC !4975 BRADFORD DR , SUITE 3!HUNTSVILLE !AL!35807!30000!150!68!YONA !KWAJALEIN !MARSHALL I!+000002000000!N!N!000000000000!AD26!RDTE/SERVICES-MANAGEMENT SUPPORT !A2 !MISSILE AND SPACE SYSTEMS !1000!NOT DISCERNABLE OR CLASSIFIED !561210!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is KWAJALEIN RANGE 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 $1.69 billion.

What is the period of performance?

Start: 2002-09-25. End: 2019-04-30.

What is the historical spending trend for Kwajalein Range Services or similar contracts at the Reagan Test Site?

Historical spending data for Kwajalein Range Services indicates a consistent and significant investment in support operations at the Reagan Test Site. Prior to this definitive contract, funding likely flowed through various mechanisms, potentially including predecessor contracts or task orders under broader agreements. The $1.14 billion awarded here represents a long-term commitment, suggesting that annual spending has been substantial, likely in the tens to hundreds of millions of dollars per year, to maintain the complex infrastructure and operational tempo required for missile and space testing. Analyzing specific annual obligations over the contract's lifespan (2002-2019) would reveal the precise spending trajectory and any fluctuations based on program needs or budget allocations. This sustained level of funding underscores the critical and ongoing nature of the services provided at this unique location.

How does the pricing structure (Cost Plus Award Fee) compare to industry standards for similar large-scale support contracts?

The Cost Plus Award Fee (CPAF) structure is common for complex, long-term service contracts where performance outcomes are critical but difficult to define precisely upfront, such as R&D and specialized facility operations. For large-scale support contracts in sectors like defense infrastructure and remote site operations, CPAF is often preferred because it allows the government to reimburse the contractor for allowable costs while incentivizing superior performance through award fees. This structure balances cost control with the need for high-quality service delivery. Compared to fixed-price contracts, CPAF offers more flexibility for evolving requirements but requires diligent government oversight to manage costs effectively. Industry standards suggest that CPAF is a suitable mechanism when performance metrics can be clearly established and measured, as is likely the case for the services provided at Kwajalein.

What are the key performance indicators (KPIs) used to determine award fees in this contract?

While the specific Key Performance Indicators (KPIs) for determining award fees in this contract are not publicly detailed, they would typically align with the critical aspects of facilities support and operational readiness at the Reagan Test Site. Common KPIs for such contracts often include metrics related to system availability and reliability (e.g., radar uptime, data processing success rates), maintenance effectiveness (e.g., response times, preventative maintenance completion), safety performance (e.g., incident rates), logistical support efficiency, and adherence to environmental regulations. The cost-plus-award-fee structure necessitates that these KPIs are measurable, objective, and directly linked to the successful execution of the contract's SOW. The government would monitor these metrics closely to assess contractor performance and justify the payment of award fees, ensuring that the contractor is incentivized to exceed minimum performance standards.

What is the contractor's track record with the Department of Defense and specifically with managing remote, high-security facilities?

Kwajalein Range Services, LLC, has a significant track record with the Department of Defense, particularly concerning operations at the Kwajalein Atoll. As the incumbent contractor responsible for managing the Reagan Test Site, their experience is extensive and directly relevant to handling remote, high-security facilities. This long-standing relationship suggests a demonstrated capability to meet the stringent requirements of operating in such a unique and strategically important location. Their performance history would have been a key factor in the full and open competition process, with the government evaluating their past performance, technical capabilities, and management approach. A sustained presence and contract awards over time typically indicate a satisfactory or better performance record in managing complex logistical, technical, and security challenges inherent in these types of operations.

What are the potential risks associated with the long duration and remote nature of this contract?

The long duration (over 15 years from award to final completion) and remote location of this contract present several potential risks. Firstly, technological obsolescence is a concern; systems and infrastructure at Kwajalein must be continuously updated to remain relevant for modern missile and space testing, requiring significant investment and foresight from both the contractor and the government. Secondly, logistical challenges are inherent in operating at such a remote Pacific island location, including supply chain disruptions, personnel rotation, and the high cost of transportation and infrastructure maintenance. Thirdly, personnel retention can be difficult due to the isolated environment, potentially impacting operational continuity and expertise. Finally, geopolitical or environmental factors specific to the Marshall Islands could pose unforeseen risks. Effective risk mitigation strategies, including robust contingency planning and proactive management by both the contractor and the contracting agency, are crucial.

How does this contract contribute to the broader U.S. strategic defense capabilities, particularly in missile defense and space situational awareness?

This contract is fundamental to U.S. strategic defense capabilities. The Reagan Test Site on Kwajalein Atoll serves as a critical, globally unique testing and evaluation facility for a wide array of strategic systems, including ballistic missiles, missile defense interceptors, and space launch vehicles. The services provided by Kwajalein Range Services ensure the operational readiness and effectiveness of this vital infrastructure. This enables the U.S. military and intelligence agencies to develop, test, and validate advanced technologies, gather crucial data for threat assessment, and maintain superiority in missile defense and space domain awareness. Without the reliable support covered by this contract, the ability to conduct realistic testing and gather essential performance data would be severely hampered, directly impacting national security.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: Bechtel Group, Inc. (UEI: 094878980)

Address: 4975 BRADFORD DR , SUITE 3, HUNTSVILLE, AL, 35807

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline