DoD's $684M Ukraine Equipment Maintenance Contract Awarded to Morrison Knudsen Corporation

Contract Overview

Contract Amount: $68,448,615 ($68.4M)

Contractor: URS Federal Services International, Inc

Awarding Agency: Department of Defense

Start Date: 1999-09-27

End Date: 2006-01-31

Contract Duration: 2,318 days

Daily Burn Rate: $29.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199912!9700!0787!ZT01 !DEFENSE THREAT REDUCTION AGENCY !DTRA0199C0207 !A!*!* !19990927!20010930!130665078!007900517!807644554!N!1ENP3!MORRISON KNUDSEN CORPORATION (!1500 W 3RD ST !CLEVELAND !OH!44113!* !* !UP!* !* !UKRAINE !0001!+000004700000!N!N!000000000000!J099!MAINT & REPAIR OF EQ/MISCELLANEOUS EQUIPMENT !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !1711!3!*!*!*!B!A!*!A !U!U!2!001!B!* !Z!Y!Z!* !* !N!M!*!*!*!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!

Plain-Language Summary

Department of Defense obligated $68.4 million to URS FEDERAL SERVICES INTERNATIONAL, INC for work described as: 199912!9700!0787!ZT01 !DEFENSE THREAT REDUCTION AGENCY !DTRA0199C0207 !A!*!* !19990927!20010930!130665078!007900517!807644554!N!1ENP3!MORRISON KNUDSEN CORPORATION (!1500 W 3RD ST !CLEVELAND !OH!44113!* !* !UP!* !* … Key points: 1. The contract, valued at $684.5 million, was awarded by the Department of Defense to Morrison Knudsen Corporation. 2. It covers maintenance and repair of equipment in Ukraine, indicating a focus on supporting military assets in the region. 3. The award was made under full and open competition, suggesting a competitive bidding process. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully.

Value Assessment

Rating: fair

The contract value of $684.5 million is substantial. Without specific benchmarks for similar maintenance and repair contracts in volatile regions, a precise pricing assessment is difficult. However, the Cost Plus Fixed Fee structure warrants scrutiny for potential cost escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which generally promotes competitive pricing. However, the specific nature of the services and location (Ukraine) might have limited the number of truly competitive bids.

Taxpayer Impact: The significant value of the contract means taxpayer funds are being utilized. While competition is intended to ensure fair pricing, the Cost Plus Fixed Fee structure requires diligent oversight to prevent excessive spending.

Public Impact

Supports U.S. foreign policy and defense objectives in Ukraine. Ensures operational readiness of critical equipment for allied forces. Potential for job creation within the defense contracting sector. Highlights the ongoing need for maintenance and repair services in international theaters.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractor to increase costs.
Geopolitical instability in Ukraine may impact contract performance and costs.
Long contract duration (over 6 years) increases risk of cost escalation and scope creep.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Contract aims to support critical defense infrastructure.
Established contractor with experience in large-scale projects.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on equipment maintenance and repair. Spending in this area is crucial for maintaining military readiness, but can be subject to significant fluctuations based on geopolitical events and equipment modernization cycles.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. Large prime contractors like Morrison Knudsen Corporation often subcontract portions of their work, which could provide opportunities for small businesses, but this is not explicitly stated.

Oversight & Accountability

The Cost Plus Fixed Fee contract type necessitates robust oversight from the Defense Threat Reduction Agency to ensure costs are reasonable and the fixed fee is justified. Monitoring performance and expenditures will be critical for accountability.

Related Government Programs

Department of Defense Contracting
Defense Threat Reduction Agency Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Geopolitical risks in Ukraine.
Long contract duration.
Potential for undefined scope creep.
Lack of specific small business participation details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.4 million to URS FEDERAL SERVICES INTERNATIONAL, INC. 199912!9700!0787!ZT01 !DEFENSE THREAT REDUCTION AGENCY !DTRA0199C0207 !A!*!* !19990927!20010930!130665078!007900517!807644554!N!1ENP3!MORRISON KNUDSEN CORPORATION (!1500 W 3RD ST !CLEVELAND !OH!44113!* !* !UP!* !* !UKRAINE !0001!+000004700000!N!N!000000000000!J099!MAINT & REPAIR OF EQ/MISCELLANEOUS EQUIPMENT !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !1711!3!*!*!*!B!A!*!A !U!U!2!0

Who is the contractor on this award?

The obligated recipient is URS FEDERAL SERVICES INTERNATIONAL, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Threat Reduction Agency).

What is the total obligated amount?

The obligated amount is $68.4 million.

What is the period of performance?

Start: 1999-09-27. End: 2006-01-31.

What is the specific breakdown of the fixed fee and the estimated cost components within this Cost Plus Fixed Fee contract, and how does this compare to industry standards for similar services?

The provided data does not detail the breakdown of the fixed fee or the estimated cost components. Understanding this breakdown is crucial for assessing the contractor's profit margin and the government's potential exposure to cost overruns. A comparison to industry standards for similar maintenance and repair services in comparable geopolitical environments would be necessary to determine if the fee structure is reasonable and offers good value for taxpayer money.

What are the specific risks associated with performing equipment maintenance and repair in Ukraine, and what mitigation strategies are in place?

Risks in Ukraine could include logistical challenges, security threats, political instability, and potential supply chain disruptions. Mitigation strategies might involve detailed security protocols, robust logistical planning, contingency plans for unforeseen events, and close coordination with local authorities and military commands. The effectiveness of these strategies would depend on the specific measures implemented by both the contractor and the contracting agency.

How will the effectiveness of the equipment maintenance and repair services be measured to ensure operational readiness and value for money?

Effectiveness is typically measured through performance metrics outlined in the contract, such as equipment uptime, repair turnaround times, adherence to maintenance schedules, and overall equipment reliability. Key Performance Indicators (KPIs) and regular performance reviews would be essential. The Defense Threat Reduction Agency would need to establish clear standards and conduct thorough inspections and audits to ensure the services meet the required operational readiness levels and provide good value.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM Global II, LLC (UEI: 043271568)

Address: 1500 W 3RD ST. STE 200, CLEVELAND, OH, 44113

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline