DoD's $40M Naval Aviation IT contract with KBR Wyle raises questions on R&D value and competition
Contract Overview
Contract Amount: $40,173,169 ($40.2M)
Contractor: KBR Wyle Services, LLC
Awarding Agency: Department of Defense
Start Date: 2017-05-11
End Date: 2022-05-14
Contract Duration: 1,829 days
Daily Burn Rate: $22.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF NAVAL AVIATION LOGISTICS INFORMATION TECHNOLOGY (IT) SOLUTIONS NAVAL AIR SYSTEMS COMMAND AVIATION READINESS AND RESOURCE ANALYSIS DEPARTMENT (NAVAIR 6.8.4) ENTERPRISE SERVICES AND INFRASTRUCTURE (ES&I)
Place of Performance
Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $40.2 million to KBR WYLE SERVICES, LLC for work described as: IGF::OT::IGF NAVAL AVIATION LOGISTICS INFORMATION TECHNOLOGY (IT) SOLUTIONS NAVAL AIR SYSTEMS COMMAND AVIATION READINESS AND RESOURCE ANALYSIS DEPARTMENT (NAVAIR 6.8.4) ENTERPRISE SERVICES AND INFRASTRUCTURE (ES&I) Key points: 1. Contract awarded under 'Research and Development in Physical, Engineering, and Life Sciences' (NAICS 541712) for IT solutions. 2. KBR Wyle Services, LLC holds the contract, awarded via full and open competition. 3. The contract duration is 5 years, with a total value of $40,173,168.8. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. No small business participation was reported.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee structure for an IT solutions contract, especially one categorized under R&D, warrants scrutiny. While it allows for flexibility, it can incentivize cost escalation without a clear cap on final expenditure, potentially leading to overpayment if not rigorously overseen.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, suggesting a robust price discovery process. However, the specific R&D classification for IT solutions might obscure the true market value and competitive landscape for these services.
Taxpayer Impact: The use of a Cost Plus Fixed Fee contract, while competitively awarded, carries inherent risks of cost overruns, potentially impacting taxpayer value if not managed with stringent oversight.
Public Impact
Naval aviation readiness and resource analysis may be impacted by the effectiveness of these IT solutions. The R&D classification for IT services could indicate novel solutions or a misclassification, affecting public understanding of spending. Transparency in how the fixed fee is determined and managed is crucial for public trust. The lack of small business involvement limits opportunities for smaller, potentially innovative firms in this sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure
- R&D classification for IT solutions
- No small business participation
Positive Signals
- Full and open competition awarded
- Long-term contract provides stability
Sector Analysis
This contract falls under IT services within the broader defense sector. Benchmarking IT spending, especially for R&D-focused solutions, is complex due to rapid technological advancements and varying service scopes. Defense IT spending is a significant portion of the federal budget.
Small Business Impact
The absence of small business participation is notable. While not always required, it can indicate a lack of outreach or that the contract's scope favored larger, established companies, potentially missing out on innovative solutions from smaller enterprises.
Oversight & Accountability
Oversight is critical for Cost Plus Fixed Fee contracts to ensure costs remain reasonable and deliverables meet objectives. The specific R&D classification requires careful monitoring to confirm that the spending aligns with genuine research and development efforts.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost Plus Fixed Fee structure may lead to cost overruns.
- R&D classification for IT solutions could obscure true service costs and value.
- Lack of small business participation limits competitive landscape.
- Effectiveness of IT solutions for naval aviation readiness needs clear metrics.
- Potential for mission creep within the R&D scope.
Tags
research-and-development-in-the-physical, department-of-defense, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $40.2 million to KBR WYLE SERVICES, LLC. IGF::OT::IGF NAVAL AVIATION LOGISTICS INFORMATION TECHNOLOGY (IT) SOLUTIONS NAVAL AIR SYSTEMS COMMAND AVIATION READINESS AND RESOURCE ANALYSIS DEPARTMENT (NAVAIR 6.8.4) ENTERPRISE SERVICES AND INFRASTRUCTURE (ES&I)
Who is the contractor on this award?
The obligated recipient is KBR WYLE SERVICES, 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 $40.2 million.
What is the period of performance?
Start: 2017-05-11. End: 2022-05-14.
How effectively are the IT solutions developed under this R&D contract contributing to naval aviation readiness and resource analysis, and is the fixed fee commensurate with the achieved value?
Assessing the effectiveness requires detailed performance metrics and outcome-based evaluations tied to naval aviation readiness. The fixed fee's appropriateness depends on the complexity of the R&D and the demonstrated impact of the IT solutions. Without clear performance data, it's difficult to ascertain if the fee accurately reflects the value delivered to the warfighter and taxpayer.
What specific R&D activities are being undertaken within this IT solutions contract, and how does this classification justify the Cost Plus Fixed Fee structure over other contract types?
The R&D classification suggests the contract aims to develop novel IT capabilities for naval aviation. The Cost Plus Fixed Fee structure might be chosen to accommodate the uncertainties inherent in research, allowing flexibility for unforeseen technical challenges. However, rigorous justification is needed to ensure this structure isn't used to mask standard IT service provision, which could be procured more cost-effectively.
Given the full and open competition, why was there no reported small business participation, and what is the potential impact on innovation and cost-effectiveness in the long run?
The lack of small business participation could stem from the contract's technical requirements, bonding needs, or the bidding process itself. This limits the pool of potential innovators and may lead to higher costs if larger firms have less competitive pressure. Encouraging small business involvement could foster more diverse solutions and potentially drive down costs through specialized expertise.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: FA807515R0001
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: KBR, Inc.
Address: 345 BOB HEATH DR, HUNTSVILLE, AL, 35806
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $43,162,288
Exercised Options: $43,162,288
Current Obligation: $40,173,169
Actual Outlays: $3,777,398
Subaward Activity
Number of Subawards: 44
Total Subaward Amount: $7,262,179
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA807516D0010
IDV Type: IDC
Timeline
Start Date: 2017-05-11
Current End Date: 2022-05-14
Potential End Date: 2022-05-14 00:00:00
Last Modified: 2024-04-24
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