DoD's THAAD Project Office awards $35.9M R&D contract to KBR Wyle Services for missile defense analysis

Contract Overview

Contract Amount: $35,900,455 ($35.9M)

Contractor: KBR Wyle Services, LLC

Awarding Agency: Department of Defense

Start Date: 2022-12-20

End Date: 2027-12-26

Contract Duration: 1,832 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TERMINAL HIGH ALTITUDE AREA DEFENSE PROJECT OFFICE TECHNICAL ANALYSIS FOR MISSILE DEFENSE AGENCY

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $35.9 million to KBR WYLE SERVICES, LLC for work described as: TERMINAL HIGH ALTITUDE AREA DEFENSE PROJECT OFFICE TECHNICAL ANALYSIS FOR MISSILE DEFENSE AGENCY Key points: 1. Contract focuses on critical research and development for missile defense systems. 2. Full and open competition suggests a robust market for these specialized services. 3. The contract duration of over 5 years indicates a long-term need for these capabilities. 4. Awarded by the Department of the Air Force, supporting broader defense initiatives. 5. The NAICS code 541715 points to significant investment in physical and engineering sciences research. 6. The contract type (Cost Plus Fixed Fee) allows for flexibility in research but requires careful cost oversight.

Value Assessment

Rating: good

The contract value of $35.9 million over approximately five years for specialized R&D in missile defense appears reasonable. Benchmarking against similar complex R&D contracts in the defense sector is challenging due to the unique nature of missile defense systems. However, the fixed fee component suggests a degree of cost control. Further analysis would require comparing specific deliverables and labor rates to industry standards for highly specialized scientific and engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bidders suggests a competitive environment for this specialized missile defense R&D. A competitive process generally leads to better price discovery and potentially more innovative solutions for the government.

Taxpayer Impact: Taxpayers benefit from a competitive award process which typically drives down costs and ensures the government receives the best value for its investment in critical defense research.

Public Impact

The primary beneficiaries are the U.S. military and national security, through advancements in missile defense capabilities. Services delivered include technical analysis and research crucial for the effectiveness of the THAAD system. The contract is geographically focused within Alabama, supporting a key defense research hub. This contract likely supports a highly skilled workforce of scientists, engineers, and technical analysts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed diligently.
The specialized nature of missile defense R&D may limit the pool of truly competitive bidders in the long term.
Reliance on a single contractor for extended periods could pose a risk if performance degrades.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential offerors.
The contract duration of over five years suggests a stable and predictable requirement, allowing for focused R&D efforts.
The selection of KBR Wyle Services, LLC, likely indicates a contractor with proven expertise in this highly technical field.

Sector Analysis

The defense R&D sector is characterized by high barriers to entry, significant government investment, and a focus on technological innovation. This contract fits within the broader missile defense domain, a critical area for national security. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of missile defense systems, but overall R&D spending in defense is substantial, with significant portions allocated to advanced technologies like missile defense.

Small Business Impact

There is no indication of a small business set-aside for this contract, and the prime contractor, KBR Wyle Services, LLC, is a large business. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The focus on highly specialized R&D might limit the scope for broad small business participation as prime contractors.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force and the Missile Defense Agency. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is typically maintained through contract reporting mechanisms and potential reviews by the Government Accountability Office (GAO) or the Inspector General, especially concerning cost and performance.

Related Government Programs

Missile Defense Agency (MDA) Programs
Terminal High Altitude Area Defense (THAAD)
Research and Development in Defense
Aerospace and Defense R&D
Advanced Weapons Systems Analysis

Risk Flags

Cost Overrun Risk (CPFF)
Technical Complexity
Long-Term Dependency
Limited Competition Pool

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.9 million to KBR WYLE SERVICES, LLC. TERMINAL HIGH ALTITUDE AREA DEFENSE PROJECT OFFICE TECHNICAL ANALYSIS FOR MISSILE DEFENSE AGENCY

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 $35.9 million.

What is the period of performance?

Start: 2022-12-20. End: 2027-12-26.

What is the track record of KBR Wyle Services, LLC with the Missile Defense Agency and similar R&D contracts?

KBR Wyle Services, LLC has a significant history of supporting government contracts, particularly within the aerospace and defense sectors. While specific details on their track record with the Missile Defense Agency (MDA) for THAAD-related R&D require deeper database searches, their general profile suggests experience in complex engineering, scientific research, and technical analysis. They have been involved in various aspects of defense research, including simulation, testing, and systems analysis. Their ability to secure this contract, especially under full and open competition, implies a demonstrated capability and past performance that meets the stringent requirements of the MDA for critical missile defense projects. Further investigation into past performance reviews and contract awards would provide a more granular understanding of their specific successes and challenges in similar roles.

How does the $35.9 million contract value compare to historical spending on THAAD technical analysis?

Comparing the $35.9 million contract value to historical spending on THAAD technical analysis requires access to historical contract databases and specific line-item data for similar services. Without that granular historical data, a direct comparison is difficult. However, the contract's duration of approximately five years suggests an average annual spend of around $7.2 million. This figure should be contextualized within the overall budget of the THAAD program, which is a multi-billion dollar endeavor. Given the complexity and critical nature of missile defense R&D, this annual figure for specialized technical analysis appears to be within a reasonable range for such a high-stakes program. Fluctuations in annual spending would depend on specific research phases, testing requirements, and evolving threat assessments.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type for missile defense R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for missile defense R&D revolve around cost control and contractor incentives. While the fixed fee provides a defined profit margin for the contractor, the 'cost plus' element means the government bears the risk of cost overruns. If the research proves more complex or time-consuming than initially estimated, the total cost to the government could escalate significantly beyond initial projections. This necessitates robust government oversight to scrutinize all incurred costs and ensure they are reasonable, allocable, and necessary. Additionally, CPFF contracts can sometimes reduce the contractor's incentive to control costs aggressively, as their fee is fixed regardless of the final project cost, although the potential for future contracts can serve as an indirect incentive for efficient performance.

How effective is the current competition level likely to be in ensuring optimal value for taxpayers?

The current competition level, with two bidders under a full and open solicitation, is moderately effective in ensuring optimal value for taxpayers. Having multiple bidders generally fosters price competition and encourages offerors to present their best technical solutions and pricing. However, the specialized nature of missile defense R&D means the pool of truly capable contractors may be limited. While two bidders provide some level of competition, a larger number of bidders would typically yield even greater price discovery and potentially more innovative approaches. The government's ability to negotiate favorable terms and ensure rigorous oversight of the chosen contractor will be crucial in maximizing taxpayer value beyond the initial competitive award.

What are the potential performance challenges or indicators of concern for this specific R&D contract?

Potential performance challenges for this R&D contract could include difficulties in achieving specific research objectives within the projected timelines and budget, especially given the inherent uncertainties in scientific discovery and technological development. Technical hurdles, unforeseen complexities in missile defense system analysis, or integration issues could arise. Indicators of concern might include frequent requests for contract modifications or extensions, significant cost growth beyond initial estimates without clear justification, negative feedback from technical monitors regarding progress, or a decline in the contractor's key personnel assigned to the project. The CPFF structure requires vigilant monitoring to ensure the contractor remains focused on delivering the required analytical outcomes efficiently and effectively.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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: $53,301,086

Exercised Options: $53,301,086

Current Obligation: $35,900,455

Actual Outlays: $3,897,143

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $17,327,864

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807518D0015

IDV Type: IDC

Timeline