DoD's $31.7M contract with KBR Wyle for PEO Aviation R&D faces scrutiny over value and competition
Contract Overview
Contract Amount: $31,720,645 ($31.7M)
Contractor: KBR Wyle Services, LLC
Awarding Agency: Department of Defense
Start Date: 2023-08-03
End Date: 2028-08-02
Contract Duration: 1,826 days
Daily Burn Rate: $17.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: SYSTEM ACQUISITION AND RELIABILITY IMPROVEMENT FOR THE PROGRAM EXECUTIVE OFFICE AVIATION, FIXED WING PROJECT OFFICE
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35806
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $31.7 million to KBR WYLE SERVICES, LLC for work described as: SYSTEM ACQUISITION AND RELIABILITY IMPROVEMENT FOR THE PROGRAM EXECUTIVE OFFICE AVIATION, FIXED WING PROJECT OFFICE Key points: 1. The contract focuses on R&D in physical, engineering, and life sciences, a broad category. 2. KBR Wyle, a large government contractor, secured this award. 3. The 'full and open competition' method was used, but the specific impact on price discovery needs review. 4. The contract duration is 5 years, suggesting a long-term need for these services.
Value Assessment
Rating: questionable
The contract value of $31.7M over 5 years for R&D services is difficult to benchmark without specific deliverables. The Cost Plus Fixed Fee (CPFF) contract type can lead to 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 effectiveness of this method in achieving the best value for R&D services is not immediately clear. The award was a delivery order, suggesting it's part of a larger contract vehicle.
Taxpayer Impact: The ultimate taxpayer impact depends on the successful outcomes of the R&D and whether the fixed fee adequately incentivizes efficiency.
Public Impact
Potential for advanced aviation technologies and improved system reliability. Impact on the broader aerospace and defense R&D sector. Ensuring taxpayer funds are used efficiently for critical defense research.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can incentivize spending.
- Lack of specific performance metrics makes value assessment difficult.
- Long contract duration may not reflect evolving R&D needs.
Positive Signals
- Awarded under full and open competition.
- Supports critical Program Executive Office Aviation initiatives.
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences. Spending in this sector is crucial for technological advancement but can be prone to cost overruns due to the inherent uncertainties of research.
Small Business Impact
The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small businesses had opportunities to participate as subcontractors.
Oversight & Accountability
Oversight will be critical to ensure KBR Wyle meets performance objectives and manages costs effectively under the CPFF structure. Regular reviews of progress and expenditures are essential.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Lack of specific performance metrics.
- Broad R&D category.
- Long contract duration.
Tags
research-and-development-in-the-physical, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.7 million to KBR WYLE SERVICES, LLC. SYSTEM ACQUISITION AND RELIABILITY IMPROVEMENT FOR THE PROGRAM EXECUTIVE OFFICE AVIATION, FIXED WING PROJECT OFFICE
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 $31.7 million.
What is the period of performance?
Start: 2023-08-03. End: 2028-08-02.
How does the fixed fee in this CPFF contract align with the expected R&D outcomes and market rates for similar services?
The alignment of the fixed fee with R&D outcomes and market rates is a key area for scrutiny. A CPFF structure requires careful negotiation of the fixed fee to ensure it reflects a reasonable profit for the contractor while incentivizing efficient performance. Without detailed breakdowns of the contractor's proposed costs and the government's independent cost estimates, it's difficult to assess if the fee is appropriate or if it could lead to excessive profits given the inherent risks of R&D.
What specific performance metrics are in place to measure the success of the 'system acquisition and reliability improvement' R&D?
The provided data lacks specific performance metrics for this R&D contract. Effective oversight requires clearly defined, measurable, achievable, relevant, and time-bound (SMART) goals. These metrics should detail expected improvements in system acquisition processes or reliability enhancements. Without them, assessing the contractor's progress and the ultimate value delivered to the Department of Defense becomes subjective and challenging, potentially leading to missed objectives or inefficient use of funds.
Could this R&D effort have been achieved more cost-effectively through alternative contract types or competition strategies?
The choice of a Cost Plus Fixed Fee (CPFF) contract for R&D, while common, warrants examination. Alternative strategies like Firm-Fixed-Price (FFP) contracts, if R&D scope was more defined, or other incentive-based fee structures might have offered greater cost control. Furthermore, the effectiveness of the 'full and open competition' in driving down costs for this specific R&D niche needs validation. Exploring if a more targeted competition or different contract vehicle could have yielded better value is crucial for taxpayer accountability.
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: $55,396,442
Exercised Options: $55,396,442
Current Obligation: $31,720,645
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $24,479,944
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
Start Date: 2023-08-03
Current End Date: 2028-08-02
Potential End Date: 2028-08-02 00:00:00
Last Modified: 2025-12-10
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