DoD's $1.86B contract for USAFE logistics services awarded to PAE Government Services raises cost and competition questions

Contract Overview

Contract Amount: $185,990,015 ($186.0M)

Contractor: PAE Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2001-11-20

End Date: 2007-09-30

Contract Duration: 2,140 days

Daily Burn Rate: $86.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200202!000096!5700!DA17 !USAFE CONS/LGC ROB, GERMANY !F6152102C5400 !A!N! !Y! !20011120!20060930!809790017!809790017!044435766!N!PAE GOVERNMENT SERVICES, INC !888 SOUTH FIGUEROA STREET,!LOS ANGELES !CA!90017!* !* !SP!* !* !SPAIN !+000007704638!N!N!000000000000!M199!OPERATION/OTHER MISCELLANEOUS BUILDINGS !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !488190!E! !3! ! ! ! ! !99990909!B! ! !B! !A!N!R!2!005!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Plain-Language Summary

Department of Defense obligated $186.0 million to PAE GOVERNMENT SERVICES, INC. for work described as: 200202!000096!5700!DA17 !USAFE CONS/LGC ROB, GERMANY !F6152102C5400 !A!N! !Y! !20011120!20060930!809790017!809790017!044435766!N!PAE GOVERNMENT SERVICES, INC !888 SOUTH FIGUEROA STREET,!LOS ANGELES !CA!90017!* !* !SP!* !* … Key points: 1. The contract's large value and extended duration suggest significant taxpayer investment. 2. Full and open competition was cited, but the pricing structure warrants scrutiny. 3. The service category is broad, potentially masking specific cost drivers. 4. PAE Government Services has a history of large government contracts, indicating established market presence.

Value Assessment

Rating: questionable

The contract's total value is substantial, and without specific per-unit cost data, it's difficult to benchmark against similar logistics support contracts. The 'COST PLUS AWARD FEE' structure can incentivize cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While advertised as full and open competition, the lack of detailed pricing information makes it challenging to assess if the awarded price truly reflects the most competitive outcome. The 'COST PLUS AWARD FEE' structure can sometimes lead to higher final costs than fixed-price contracts.

Taxpayer Impact: The significant value of this contract means any inefficiencies or overpricing directly impacts taxpayer funds allocated for defense support.

Public Impact

Supports critical logistics for the U.S. Air Forces in Europe (USAFE), ensuring operational readiness. The contract covers a wide range of services, impacting personnel and infrastructure management in Germany. Potential for job creation and economic activity in the region where services are performed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost control in a Cost Plus Award Fee contract
Scope creep and potential for contract modifications
Performance metrics and award fee justification

Positive Signals

Ensures essential logistical support for a key military theater
Competition was sought, indicating an attempt at market-based pricing
Long-term contract provides stability for service provision

Sector Analysis

This contract falls within the broader defense sector, specifically focusing on base operations and logistics support. Benchmarking requires comparison with similar large-scale service contracts for overseas military installations, which often involve significant overhead and risk premiums.

Small Business Impact

The contract was awarded to PAE Government Services, a large prime contractor. There is no immediate indication of significant subcontracting opportunities for small businesses within the provided data, though this is common for large prime contracts.

Oversight & Accountability

Oversight would typically involve the Department of Defense's contracting officers and potentially Inspector General's office to ensure compliance with terms, cost controls, and performance standards. The 'COST PLUS AWARD FEE' structure necessitates robust performance monitoring.

Related Government Programs

Other Support Activities for Air Transportation
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

High contract value with a Cost Plus Award Fee structure.
Extended contract duration (over 5 years).
Broad service scope may obscure specific cost efficiencies.
Lack of detailed public cost breakdown for benchmarking.
Potential for contractor performance to drift without stringent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $186.0 million to PAE GOVERNMENT SERVICES, INC.. 200202!000096!5700!DA17 !USAFE CONS/LGC ROB, GERMANY !F6152102C5400 !A!N! !Y! !20011120!20060930!809790017!809790017!044435766!N!PAE GOVERNMENT SERVICES, INC !888 SOUTH FIGUEROA STREET,!LOS ANGELES !CA!90017!* !* !SP!* !* !SPAIN !+000007704638!N!N!000000000000!M199!OPERATION/OTHER MISCELLANEOUS BUILDINGS !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !488190!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is PAE GOVERNMENT SERVICES, INC..

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 $186.0 million.

What is the period of performance?

Start: 2001-11-20. End: 2007-09-30.

What specific performance metrics are tied to the award fee, and how are they objectively measured to ensure fair compensation and prevent contractor complacency?

The contract details should outline specific Key Performance Indicators (KPIs) related to logistics efficiency, response times, and service quality. Objective measurement mechanisms, such as delivery tracking, customer satisfaction surveys, and compliance audits, are crucial. The award fee should be directly linked to achieving or exceeding these KPIs, ensuring the contractor is incentivized for superior performance rather than just meeting minimum requirements.

Given the 'COST PLUS AWARD FEE' structure, what are the primary cost drivers, and what mechanisms are in place to prevent cost overruns and ensure value for money?

Primary cost drivers likely include labor (personnel salaries, benefits), equipment, facilities, and overhead. Mechanisms to prevent overruns include detailed budget reviews, regular financial reporting, limitations on indirect cost rates, and strict oversight of expenditures. The award fee itself should be structured to reward cost efficiency, not just performance, alongside other critical metrics.

How does the performance of PAE Government Services on this contract compare to industry benchmarks for similar overseas logistics support, particularly concerning cost-effectiveness and service relia

A comprehensive comparison would require access to detailed performance data and cost breakdowns, which are not publicly available. However, analysis could involve reviewing past performance evaluations of PAE on similar contracts, comparing their cost structures to publicly available data for peer companies, and assessing the frequency and severity of any reported issues or contract disputes related to service delivery or cost management.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 5

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: Goldberg Lindsay & CO. LLC (UEI: 075062583)

Address: 888 SOUTH FIGUEROA STREET,, LOS ANGELES, CA, 90

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline