Missile Defense Agency awards $42.5M for THAAD technical support, with KBR Wyle Services, LLC as prime

Contract Overview

Contract Amount: $42,531,330 ($42.5M)

Contractor: KBR Wyle Services, LLC

Awarding Agency: Department of Defense

Start Date: 2018-05-11

End Date: 2022-12-31

Contract Duration: 1,695 days

Daily Burn Rate: $25.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TERMINAL HIGH ALTITUDE AREA DEFENSE (THAAD) TECHNICAL SUPPORT MISSILE DEFENSE AGENCY (MDA) THAAD PROJECT OFFICE (TPO) (MDA/TH)

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $42.5 million to KBR WYLE SERVICES, LLC for work described as: TERMINAL HIGH ALTITUDE AREA DEFENSE (THAAD) TECHNICAL SUPPORT MISSILE DEFENSE AGENCY (MDA) THAAD PROJECT OFFICE (TPO) (MDA/TH) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1695 days indicates a long-term need for technical support. 3. The award amount of $42.5M is spread over several years, requiring careful performance monitoring. 4. The North American Industry Classification System (NAICS) code 541712 points to R&D services, a critical but complex sector. 5. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not managed tightly. 6. The prime contractor, KBR Wyle Services, LLC, has a significant presence in defense contracting.

Value Assessment

Rating: good

The contract value of $42.5M over approximately 4.6 years averages to about $9.2M annually. Benchmarking this against similar technical support contracts for complex defense systems is crucial. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, carries inherent risks of cost escalation if not rigorously overseen. Without specific per-unit cost data, a direct value-for-money assessment is challenging, but the competitive award suggests an attempt to secure reasonable pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specialized technical support requirement. While two bidders is better than one, a higher number of bids would typically lead to more robust price discovery and potentially lower costs for the government.

Taxpayer Impact: A competitive award process, even with two bidders, is generally favorable for taxpayers as it encourages more competitive pricing compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the U.S. Army and Missile Defense Agency, receiving critical technical support for the THAAD system. Services delivered include research and development support, essential for maintaining and enhancing the THAAD system's capabilities. The contract's geographic impact is primarily in Alabama (ST/SN), where the contractor is located, but supports a national defense asset. Workforce implications include employment for highly skilled engineers, scientists, and technical personnel within KBR Wyle Services, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type requires stringent oversight to prevent cost overruns.
Limited competition (2 bidders) may not have yielded the lowest possible price.
The specialized nature of THAAD technical support means few contractors can compete, potentially limiting future competition.
Reliance on a single prime contractor for critical technical support could pose a risk if performance issues arise.

Positive Signals

Awarded through full and open competition, ensuring a broad initial search for qualified contractors.
The prime contractor, KBR Wyle Services, LLC, is an established entity with significant experience in defense contracting.
The contract duration suggests a stable, long-term need, allowing for focused expertise development.
The Missile Defense Agency is a sophisticated client likely to have robust performance monitoring in place.

Sector Analysis

The defense sector, particularly missile defense, represents a highly specialized and technologically advanced area. Spending in this sector is driven by national security priorities and geopolitical factors. Contracts for technical support and R&D are crucial for maintaining the effectiveness of complex weapon systems like THAAD. Comparable spending benchmarks would involve analyzing other technical support contracts for major defense platforms, which often run into tens or hundreds of millions of dollars over their lifecycle.

Small Business Impact

This contract does not appear to have a small business set-aside component (ss: false, sb: false). The prime contractor is KBR Wyle Services, LLC, a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The focus on specialized R&D and technical support for a major defense system may limit opportunities for broad small business subcontracting, though specific components or services might be outsourced.

Oversight & Accountability

Oversight for this contract would primarily fall under the Missile Defense Agency (MDA) and potentially the Department of Defense's Inspector General. The CPFF contract type necessitates close monitoring of costs, performance, and adherence to the Statement of Work. Transparency is generally maintained through contract reporting mechanisms, but detailed operational specifics are often classified or sensitive. Accountability rests with the contracting officer and program managers within MDA.

Related Government Programs

Missile Defense Systems
Ballistic Missile Defense
Research and Development
Aerospace Engineering Services
Government Technical Support Contracts

Risk Flags

Cost Overrun Risk (CPFF Contract)
Limited Competition
Technical Complexity
Long-Term Sustainment Needs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.5 million to KBR WYLE SERVICES, LLC. TERMINAL HIGH ALTITUDE AREA DEFENSE (THAAD) TECHNICAL SUPPORT MISSILE DEFENSE AGENCY (MDA) THAAD PROJECT OFFICE (TPO) (MDA/TH)

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 $42.5 million.

What is the period of performance?

Start: 2018-05-11. End: 2022-12-31.

What is the track record of KBR Wyle Services, LLC with the Missile Defense Agency or similar defense contracts?

KBR Wyle Services, LLC, is a significant player in the government contracting space, particularly within the defense sector. They have a history of providing a wide range of services, including engineering, technical support, and R&D, to various agencies, including the Department of Defense and NASA. Their experience often encompasses complex systems and programs. For the Missile Defense Agency specifically, KBR has been involved in various capacities, supporting missile defense programs. Their track record generally indicates a capacity to handle large, technically demanding contracts. However, like any large contractor, they may have faced scrutiny or performance reviews on specific contracts, necessitating a detailed review of their performance history on contracts directly comparable to this THAAD technical support award.

How does the $42.5M contract value compare to other technical support contracts for major defense systems?

The $42.5 million contract value for THAAD technical support, awarded over approximately 4.6 years, translates to an average annual value of roughly $9.2 million. This figure is moderate when compared to the overall spending on major defense acquisition programs. For instance, sustainment and technical support contracts for aircraft carriers, fighter jets, or large-scale IT infrastructure modernization efforts can easily reach hundreds of millions or even billions of dollars over their lifecycles. However, for a specific system like THAAD, which is a critical but not the sole component of missile defense, this level of funding for technical support is substantial and reflects the complexity and importance of the system. A more precise comparison would require analyzing contracts for similar missile defense components or specialized R&D support for other advanced weapon systems.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, especially for Research and Development (R&D) services, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is variable. If the R&D effort encounters unforeseen technical challenges, requires more resources than initially estimated, or if cost accounting and controls are not rigorous, the total cost to the government can escalate significantly beyond initial projections. This necessitates robust government oversight, detailed cost tracking, and clear definitions of allowable costs to mitigate the risk of the government bearing an excessive financial burden for an R&D project that may not yield the expected results.

How effective is the Missile Defense Agency in managing technical support contracts to ensure program effectiveness?

The Missile Defense Agency (MDA) is generally considered a sophisticated organization with extensive experience managing complex, high-stakes defense contracts. Its mission is critical, and it operates within a demanding technological and budgetary environment. MDA employs program managers and contracting officers with specialized expertise in missile defense systems and R&D. They utilize various contract types and oversight mechanisms, including performance metrics, milestone reviews, and audits, to ensure program effectiveness and contractor performance. While specific effectiveness metrics for individual contracts are not publicly detailed, the continued development and deployment of missile defense capabilities suggest a generally effective management approach. However, challenges related to cost, schedule, and technical performance are inherent in such complex programs, and continuous vigilance and adaptation of management strategies are necessary.

What are the historical spending patterns for THAAD technical support or similar missile defense R&D?

Historical spending patterns for THAAD technical support and similar missile defense R&D indicate a consistent and significant investment by the U.S. government over the past two decades. The development and sustainment of advanced missile defense systems are inherently costly due to the cutting-edge technology involved, extensive testing requirements, and the need for specialized expertise. Funding for THAAD, in particular, has fluctuated based on threat assessments, technological advancements, and strategic priorities. Annual budgets for MDA, which encompasses THAAD and other programs, have often been in the billions of dollars. Technical support and R&D contracts form a substantial portion of this spending, reflecting the ongoing need for system upgrades, maintenance, and operational readiness. This specific $42.5M award fits within the broader context of sustained, high-level investment in national missile defense capabilities.

What is the significance of the North American Industry Classification System (NAICS) code 541712 for this contract?

The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' signifies that the core services procured under this contract involve scientific inquiry and experimentation aimed at discovering or interpreting facts, principles, or theories for the advancement of knowledge, with the expectation of practical application. For the THAAD technical support contract, this means the work likely involves advanced engineering, systems analysis, testing, and potentially the development of new capabilities or solutions related to the THAAD system. This classification highlights the contract's focus on innovation and technical problem-solving rather than routine maintenance or manufacturing, underscoring the need for highly skilled personnel and specialized facilities.

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: FA807513R0001

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Brown & Root Industrial Services Holdings, LLC

Address: 22309 EXPLORATION DR, LEXINGTON PARK, MD, 20653

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

Financial Breakdown

Contract Ceiling: $49,515,119

Exercised Options: $49,515,119

Current Obligation: $42,531,330

Actual Outlays: $14,935,927

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $27,500,568

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807514D0025

IDV Type: IDC

Timeline