DoD's $557M Facilities Support Contract with Vectrus Systems LLC Faces Scrutiny Over Pricing and Competition
Contract Overview
Contract Amount: $557,282,087 ($557.3M)
Contractor: Vectrus Systems LLC
Awarding Agency: Department of Defense
Start Date: 2014-10-01
End Date: 2021-04-30
Contract Duration: 2,403 days
Daily Burn Rate: $231.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: IGF::OT::IGF BASIC PERIOD-O&M TURKEY/SPAIN LOCATIONS
Plain-Language Summary
Department of Defense obligated $557.3 million to VECTRUS SYSTEMS LLC for work described as: IGF::OT::IGF BASIC PERIOD-O&M TURKEY/SPAIN LOCATIONS Key points: 1. The contract awarded to Vectrus Systems LLC for facilities support services is a significant expenditure of $557.3 million. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. The contract type, Fixed Price with Economic Price Adjustment, introduces risk related to cost overruns due to inflation. 4. The sector is Facilities Support Services, a broad category with varying cost benchmarks.
Value Assessment
Rating: questionable
The contract's fixed-price with economic price adjustment structure warrants scrutiny. While intended to account for inflation, it can lead to unpredictable cost increases for taxpayers. Benchmarking against similar facilities support contracts is crucial to assess if the price adjustments are reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the economic price adjustment clause may have limited the long-term price certainty and potentially allowed for higher initial bids to buffer against future cost increases.
Taxpayer Impact: The economic price adjustment clause poses a risk to taxpayers by potentially increasing the contract's final cost beyond initial projections due to fluctuating economic conditions.
Public Impact
Taxpayers may face higher costs due to economic price adjustments, impacting the overall value for money. The long duration of the contract (over 6 years) means sustained potential for cost increases. Lack of specific performance metrics or outcomes makes it difficult to assess the true effectiveness of the services provided for the cost.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment (EPA) clause
- Long contract duration
- Lack of specific performance metrics
- No small business participation noted
Positive Signals
- Full and open competition
- Definitive contract award
Sector Analysis
Facilities Support Services contracts encompass a wide range of maintenance, repair, and operational support for government facilities. Spending benchmarks can vary significantly based on the scope of services, geographic locations, and specific facility types. This contract's size suggests a comprehensive service package.
Small Business Impact
The data indicates that small business participation was not a factor in this contract award (sb: false). This suggests that the prime contractor, Vectrus Systems LLC, did not subcontract significant portions to small businesses, potentially limiting opportunities for smaller enterprises in this large federal contract.
Oversight & Accountability
The contract's long duration and the inclusion of economic price adjustments necessitate robust oversight to ensure costs remain reasonable and services are effectively delivered. Regular audits and performance reviews are critical to hold the contractor accountable and protect taxpayer interests.
Related Government Programs
- Facilities Support Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns due to EPA
- Lack of specific performance metrics
- No noted small business participation
- Long contract duration increases risk exposure
- Limited transparency on specific service costs
Tags
facilities-support-services, department-of-defense, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $557.3 million to VECTRUS SYSTEMS LLC. IGF::OT::IGF BASIC PERIOD-O&M TURKEY/SPAIN LOCATIONS
Who is the contractor on this award?
The obligated recipient is VECTRUS SYSTEMS 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 $557.3 million.
What is the period of performance?
Start: 2014-10-01. End: 2021-04-30.
What is the actual impact of the economic price adjustment on the contract's total cost compared to a fixed-price contract?
The economic price adjustment (EPA) allows for increases in contract price based on fluctuations in economic factors like labor costs, material prices, and inflation indices. Without specific data on the applied adjustments, it's difficult to quantify the exact impact. However, EPAs generally lead to higher final costs than fixed-price contracts, as they transfer some cost-increase risk to the government, potentially inflating the total expenditure beyond initial projections.
How does the cost per unit for these facilities support services compare to industry benchmarks, considering the contract's scope and locations?
Benchmarking the cost per unit for these facilities support services is challenging without detailed breakdowns of the services provided (e.g., per square foot maintained, per service call). However, given the contract's $557M value over approximately 6.5 years, the average annual spend is substantial. A thorough analysis would require comparing specific service costs against similar DoD or large-scale commercial facilities management contracts in Turkey and Spain.
What mechanisms are in place to ensure the effectiveness and quality of facilities support services despite the long contract duration and potential for cost escalation?
Effective oversight mechanisms are crucial. This includes clearly defined performance standards, Key Performance Indicators (KPIs), and regular performance evaluations. The Department of Defense should actively monitor service delivery, conduct site inspections, and utilize customer satisfaction surveys. Contract modifications or incentive clauses tied to performance could also ensure quality and effectiveness over the contract's lifespan.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA561313R0005
Offers Received: 6
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Vectrus, Inc.
Address: 655 SPACE CENTER DR, COLORADO SPRINGS, CO, 80915
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $690,371,386
Exercised Options: $605,463,189
Current Obligation: $557,282,087
Actual Outlays: $18,187,343
Subaward Activity
Number of Subawards: 153
Total Subaward Amount: $46,515,483
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-10-01
Current End Date: 2021-04-30
Potential End Date: 2021-04-30 00:00:00
Last Modified: 2025-07-17
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