DoD's $290M ARCTEC Services Contract: Long Duration, Fixed Price Incentive, Full and Open Competition
Contract Overview
Contract Amount: $289,969,829 ($290.0M)
Contractor: Arctec Services JV
Awarding Agency: Department of Defense
Start Date: 1999-10-01
End Date: 2011-09-30
Contract Duration: 4,382 days
Daily Burn Rate: $66.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Place of Performance
Location: CLEAR, DENALI County, ALASKA, 99704
State: Alaska Government Spending
Plain-Language Summary
Department of Defense obligated $290.0 million to ARCTEC SERVICES JV for work described as: Key points: 1. Significant contract value of $290M over 12 years. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. Fixed Price Incentive (FPI) contract type introduces performance risk and reward. 4. The contract spans a long duration, potentially impacting adaptability to changing needs.
Value Assessment
Rating: fair
The contract's fixed price incentive structure aims to balance cost control with performance. However, the long duration and lack of specific performance metrics make a direct pricing assessment challenging without further data on incentives and outcomes.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, indicating a broad solicitation process. This method generally promotes price discovery and competitive pricing, though the long contract term might have influenced initial bids.
Taxpayer Impact: The competitive nature of the award is positive for taxpayers, aiming to secure the best possible price. However, the extended duration warrants scrutiny to ensure continued value throughout the contract lifecycle.
Public Impact
Long-term commitment of nearly $290 million by the Department of Defense. Potential for sustained service delivery by ARCTEC SERVICES JV over more than a decade. The contract's duration raises questions about the government's ability to adapt to evolving technological or operational requirements. Fixed Price Incentive contracts can lead to cost overruns if not managed carefully.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (12 years)
- Fixed Price Incentive (FPI) contract type
- Lack of specific performance data for assessment
Positive Signals
- Full and open competition
- Significant contract value awarded
Sector Analysis
This contract falls under general services or support within the Department of Defense. Benchmarking is difficult without a specific Product Service Code (PSC), but large, long-duration service contracts are common in government.
Small Business Impact
The data indicates the awardee is 'ARCTEC SERVICES JV'. The 'JV' suggests a joint venture, which could involve small businesses. However, the 'sb' field is false, implying no specific small business set-aside or participation was mandated or reported.
Oversight & Accountability
The long duration of this contract necessitates robust oversight to ensure performance standards are met and costs remain controlled. Regular reviews and performance assessments are crucial for accountability.
Related Government Programs
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Extended contract duration may lead to obsolescence or changing requirements.
- Fixed Price Incentive contracts can be complex to manage and may lead to cost overruns if not properly structured.
- Lack of specific performance metrics makes it difficult to assess contractor efficiency and value.
- Potential for contractor lock-in over the long term despite initial competition.
Tags
department-of-defense, ak, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $290.0 million to ARCTEC SERVICES JV. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is ARCTEC SERVICES JV.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $290.0 million.
What is the period of performance?
Start: 1999-10-01. End: 2011-09-30.
What specific services were procured under this $290M contract, and how did the fixed price incentive structure align with achieving optimal value for the Air Force?
The provided data does not specify the exact services rendered under the ARCTEC SERVICES JV contract. A Fixed Price Incentive (FPI) contract aims to share cost savings or overruns between the government and contractor based on achieving target costs and performance levels. Understanding the specific targets, incentive formulas, and final outcomes would be necessary to assess if this structure truly optimized value and encouraged efficient performance for the Department of the Air Force over its 12-year span.
Given the 12-year duration and FPI structure, what were the primary risks associated with cost overruns or performance shortfalls for the Department of Defense?
The primary risks with a 12-year FPI contract include potential cost escalation beyond initial projections due to unforeseen market changes or scope creep, especially if the incentive structure wasn't sufficiently robust. Performance risks involve the contractor potentially cutting corners to meet cost targets at the expense of quality or failing to adapt to evolving mission needs over such a long period. Effective government oversight and clear performance metrics are critical to mitigate these risks.
How effectively did the 'full and open competition' ensure competitive pricing and prevent potential contractor lock-in over the contract's extended lifecycle?
Full and open competition is designed to maximize the pool of potential bidders, thereby fostering competitive pricing at the outset. For a 12-year contract, its effectiveness in preventing long-term price creep or contractor lock-in depends heavily on the contract's terms, including any options, re-negotiation clauses, and the government's ability to solicit new competitions for evolving needs. While it likely secured a good initial price, ongoing vigilance is needed to ensure sustained value.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE (L)
Contractor Details
Address: 1785 N ACADEMY BLVD, COLORADO SPRIN, CO
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 1999-10-01
Current End Date: 2011-09-30
Potential End Date: 2011-09-30 00:00:00
Last Modified: 2011-10-04
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