DoD's $495M Facilities Support Contract Awarded to PAE Applied Technologies LLC for Oklahoma Operations

Contract Overview

Contract Amount: $494,903,556 ($494.9M)

Contractor: PAE Applied Technologies LLC

Awarding Agency: Department of Defense

Start Date: 2000-07-28

End Date: 2008-03-31

Contract Duration: 2,803 days

Daily Burn Rate: $176.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE INCENTIVE

Sector: Other

Place of Performance

Location: ENID, GARFIELD County, OKLAHOMA, 73705

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $494.9 million to PAE APPLIED TECHNOLOGIES LLC for work described as: Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The fixed-price incentive contract type aims to align contractor performance with government objectives. 3. Long duration of nearly 8 years indicates a significant, ongoing need for facilities support. 4. The contract's value places it as a substantial investment in base operations. 5. Focus on facilities support services is critical for maintaining operational readiness. 6. The award to a single contractor suggests a consolidation of services under one entity.

Value Assessment

Rating: good

The contract value of approximately $495 million over its duration represents a significant investment. Benchmarking this against similar large-scale facilities support contracts for Department of Defense installations is crucial. While specific per-unit cost data is not provided, the fixed-price incentive structure suggests an attempt to control costs while incentivizing performance. The long-term nature of the contract implies a stable, albeit substantial, cost for sustained services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of four bids suggests a reasonably competitive environment for this large-scale facilities support requirement. A competitive process like this is generally expected to yield better pricing and service terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from the potential for cost savings and improved service quality that can arise from a competitive bidding process. The multiple bids likely drove down the price and encouraged the contractor to offer robust services to win the award.

Public Impact

The primary beneficiaries are the Department of the Air Force and its personnel stationed at the Oklahoma facility, ensuring a well-maintained and operational environment. Services delivered include comprehensive facilities support, crucial for the day-to-day functioning and readiness of the military installation. The geographic impact is concentrated in Oklahoma, supporting local infrastructure and potentially local employment through the contractor's operations. Workforce implications include direct and indirect employment opportunities generated by PAE Applied Technologies LLC in the Oklahoma region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential cost overruns if not managed effectively.
Fixed-price incentive contracts can sometimes lead to disputes over performance metrics and cost adjustments.
Reliance on a single large contractor may reduce flexibility in adapting to changing operational needs.
Potential for contractor 'lock-in' making it difficult to switch providers in the future without significant disruption.

Positive Signals

Awarded through full and open competition, indicating a robust and fair bidding process.
Fixed-price incentive contract structure aligns contractor incentives with government goals.
Long-term contract provides stability and predictability for essential base support services.
The contractor, PAE Applied Technologies LLC, likely has a track record in providing similar services.
The contract's value suggests a significant scope of work, potentially leading to economies of scale.

Sector Analysis

Facilities Support Services represent a significant segment within the broader professional, scientific, and technical services sector. This contract, valued at nearly half a billion dollars, falls within the upper echelon of government service contracts. The market for such services is characterized by large, established players capable of managing complex, long-term operations at government installations. Comparable spending benchmarks would involve analyzing other large-scale base operations and support contracts awarded by the DoD and other federal agencies.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no specific subcontracting requirements for small businesses were mandated. The large scale and nature of facilities support services often favor larger prime contractors. While this specific award may not directly benefit small businesses through set-asides, PAE Applied Technologies LLC may engage small businesses as subcontractors for specialized tasks, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Air Force. Performance monitoring, invoicing review, and compliance checks are standard accountability measures. Transparency is facilitated through contract award databases and reporting requirements. The Inspector General's office may conduct audits or investigations if performance issues or allegations of fraud arise.

Related Government Programs

Base Operations Support (BOS)
Logistics and Facilities Management Services
Department of Defense Maintenance Contracts
Government Facilities Services
Professional, Scientific, and Technical Services

Risk Flags

Long contract duration increases exposure to market volatility and changing requirements.
Fixed-price incentive contracts can be complex to administer and may lead to disputes.
Potential for contractor performance degradation over an extended period without strong oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $494.9 million to PAE APPLIED TECHNOLOGIES LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is PAE APPLIED TECHNOLOGIES LLC.

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 $494.9 million.

What is the period of performance?

Start: 2000-07-28. End: 2008-03-31.

What is PAE Applied Technologies LLC's track record with similar large-scale federal facilities support contracts?

PAE Applied Technologies LLC, and its parent/affiliated entities, have a substantial history of performing large-scale federal contracts, particularly within the Department of Defense and other government agencies. Their portfolio often includes base operations support, logistics, and facilities maintenance services. Analyzing past performance evaluations, contract modifications, and any past performance issues or awards associated with PAE on similar contracts would provide a clearer picture of their capabilities and reliability in executing this specific $495 million facilities support agreement. A review of their contract history would reveal their experience in managing complex service requirements, workforce deployment, and adherence to government standards over extended periods.

How does the $495 million contract value compare to historical spending on facilities support at this specific Air Force installation?

To assess the value comparison, one would need to examine historical spending data for facilities support services at the specific Oklahoma Air Force installation prior to this award. This involves looking at previous contracts, their values, durations, and the scope of services provided. If previous contracts were smaller, shorter in duration, or covered fewer services, the $495 million award might represent an expansion of scope, an increase in service levels, or simply an inflation-adjusted increase over time. Conversely, if previous spending was similar or higher, it might indicate a consistent level of investment in base support. Understanding the baseline spending is key to determining if this award represents an increase, decrease, or stable investment in facilities support.

What are the primary risk indicators associated with a fixed-price incentive (FPI) contract of this magnitude and duration?

The primary risk indicators for a $495 million, nearly 8-year FPI contract revolve around cost control and performance alignment. For the government, the risk lies in the potential for the final cost to exceed initial estimates if the contractor incurs higher-than-expected costs, even with incentive targets. There's also a risk of disputes over the achievement of performance targets, which directly impact the final price paid. For the contractor, the risk is in managing costs effectively to meet or exceed incentive thresholds while absorbing unforeseen expenses. The long duration increases the likelihood of economic fluctuations, changes in operational requirements, or unforeseen technical challenges that could strain the FPI structure and lead to cost overruns or performance shortfalls if not managed proactively.

How effective is the 'full and open competition' process in ensuring value for money for this type of extensive facilities support contract?

The 'full and open competition' process is generally considered the most effective method for ensuring value for money in large-scale federal contracts like this facilities support agreement. By allowing all responsible sources to bid, it fosters a competitive environment that drives down prices and encourages innovation and efficiency. The presence of four bidders suggests that the market had sufficient interest and capability to compete. However, the ultimate value for money depends on the clarity of the solicitation's requirements, the evaluation criteria used, and the government's ability to effectively manage the contract post-award to ensure the contractor delivers on all promised services and performance standards within the negotiated price.

What are the potential implications of consolidating facilities support services under a single contractor for nearly eight years?

Consolidating extensive facilities support services under a single contractor for a long duration, such as this nearly eight-year contract, can yield several implications. Positively, it can lead to greater efficiency, streamlined communication, and potentially economies of scale as the contractor manages all aspects of support. It simplifies contract management for the government. However, risks include reduced flexibility to adapt to changing needs, potential for contractor complacency or 'lock-in' effects, and a single point of failure if the contractor underperforms or faces financial instability. The government must maintain robust oversight to mitigate these risks and ensure continued optimal service delivery throughout the contract's life.

Are there specific performance metrics or Key Performance Indicators (KPIs) tied to the incentive portion of this contract?

While the provided data indicates a 'Fixed Price Incentive' (FPI) contract type, it does not detail the specific Key Performance Indicators (KPIs) or performance metrics linked to the incentive structure. In FPI contracts, these metrics are crucial and typically relate to areas such as response times for maintenance requests, facility uptime, energy efficiency targets, safety compliance rates, or customer satisfaction scores. The incentive portion means that the final price paid to the contractor will vary based on their performance against these pre-defined KPIs, with bonuses for exceeding targets and potential penalties or reduced profit for falling short. A thorough review of the contract's Performance Work Statement (PWS) and contract clauses would be necessary to identify these specific metrics.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 4

Pricing Type: FIXED PRICE INCENTIVE (L)

Contractor Details

Parent Company: Computer Sciences Corporation (UEI: 009581091)

Address: 6500 WEST FREEWAY STE 600, FORT WORTH, TX, 90

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline