Dod's PEO Cs&css R&D Contract Awarded to KBR Wyle Services, LLC for Over $35M

Contract Overview

Contract Amount: $35,478,360 ($35.5M)

Contractor: KBR Wyle Services, LLC

Awarding Agency: Department of Defense

Start Date: 2023-07-27

End Date: 2028-07-26

Contract Duration: 1,826 days

Daily Burn Rate: $19.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PROGRAM EXECUTIVE OFFICE COMBAT SUPPORT & COMBAT SERVICES SUPPORT (PEO CS&CSS) PORTFOLIO OF PRODUCTS, VEHICLES, AND SYSTEMS RESEARCH AND DEVELOPMENT (R&D) FOR ARMY PEO CS&CSS

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $35.5 million to KBR WYLE SERVICES, LLC for work described as: PROGRAM EXECUTIVE OFFICE COMBAT SUPPORT & COMBAT SERVICES SUPPORT (PEO CS&CSS) PORTFOLIO OF PRODUCTS, VEHICLES, AND SYSTEMS RESEARCH AND DEVELOPMENT (R&D) FOR ARMY PEO CS&CSS Key points: 1. Contract focuses on research and development for combat support systems, aligning with critical defense modernization efforts. 2. The chosen contractor, KBR WYLE SERVICES, LLC, has a significant presence in defense contracting, suggesting established capabilities. 3. Awarded under full and open competition, indicating a broad search for qualified vendors and potential for competitive pricing. 4. The contract type (Cost Plus Fixed Fee) allows for flexibility in R&D but requires careful oversight to manage costs. 5. Performance period spans five years, suggesting a long-term commitment to the research objectives. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract value of approximately $35.5 million over five years for R&D in combat support systems appears reasonable given the scope. Benchmarking against similar large-scale R&D contracts within the Department of Defense for specialized systems suggests this is within expected parameters. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, necessitates diligent cost tracking to ensure value for money, as profit is fixed regardless of actual costs incurred.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The presence of two bidders suggests a competitive environment, though the exact number of proposals received and their relative strengths are not detailed here. Full and open competition generally promotes price discovery and encourages vendors to offer their best terms.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices and ensures the government receives the most advantageous offers available in the market.

Public Impact

The primary beneficiaries are the U.S. Army's combat support and combat services support units, which will receive advancements in vehicle and system technologies. Services delivered include research and development, crucial for modernizing military capabilities and maintaining technological superiority. The geographic impact is primarily within Alabama (STAL), where the contractor is located, but the ultimate impact is on national defense readiness. Workforce implications include potential job creation and demand for specialized R&D personnel within KBR WYLE SERVICES, LLC and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize cost overruns if not rigorously managed, potentially impacting the final expenditure.
The specific R&D outcomes are not detailed, making it difficult to assess the direct return on investment at this stage.
Reliance on a single delivery order under a potential IDIQ structure might limit future competition if not managed strategically.

Positive Signals

Awarded through full and open competition, indicating a robust selection process and potential for competitive pricing.
The contractor, KBR WYLE SERVICES, LLC, is an established entity in the defense sector, suggesting a track record of performance.
The contract duration of five years allows for sustained focus and development of complex R&D objectives.
The contract supports critical Army modernization efforts, aligning with strategic defense priorities.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. The defense R&D market is substantial, with significant government investment aimed at maintaining technological superiority. This contract contributes to the broader ecosystem of defense innovation, supporting advancements in platforms and systems critical for national security. Comparable spending benchmarks for similar R&D efforts within the DoD often run into tens or hundreds of millions of dollars over several years.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no specific small business set-aside (ss) noted for this contract. This suggests that the primary award was not targeted towards small businesses. However, KBR WYLE SERVICES, LLC, as a large prime contractor, may engage small businesses as subcontractors to fulfill specific needs or components of the R&D effort, contributing to the small business ecosystem indirectly.

Oversight & Accountability

Oversight for this contract will likely be managed by the Program Executive Office (PEO) Combat Support & Combat Services Support (CS&CSS) within the Department of Defense. The Cost Plus Fixed Fee (CPFF) contract type necessitates robust financial oversight to monitor expenditures and ensure compliance with the fixed fee. Accountability measures would include performance reviews, milestone tracking, and adherence to R&D objectives. Transparency is typically managed through contract reporting mechanisms and potentially through public contract databases, though specific R&D details may be sensitive.

Related Government Programs

Army Combat Systems Development
Defense Research and Development Programs
PEO CS&CSS Portfolio Management
Vehicle and Systems Engineering Contracts
Military Logistics R&D

Risk Flags

Cost Overrun Risk (CPFF)
Uncertainty of R&D Outcomes
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.5 million to KBR WYLE SERVICES, LLC. PROGRAM EXECUTIVE OFFICE COMBAT SUPPORT & COMBAT SERVICES SUPPORT (PEO CS&CSS) PORTFOLIO OF PRODUCTS, VEHICLES, AND SYSTEMS RESEARCH AND DEVELOPMENT (R&D) FOR ARMY PEO CS&CSS

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 $35.5 million.

What is the period of performance?

Start: 2023-07-27. End: 2028-07-26.

What is KBR WYLE SERVICES, LLC's track record with similar R&D contracts for the Department of Defense?

KBR WYLE SERVICES, LLC, and its predecessor entities, have a substantial history of performing research and development services for the Department of Defense. They have been involved in various large-scale engineering, scientific, and technical support contracts across multiple military branches. Their experience often includes complex system integration, testing, and analysis, particularly in areas related to aerospace, defense platforms, and operational support systems. While specific R&D contract values and performance metrics for similar projects are not detailed here, their consistent presence as a prime contractor on significant DoD programs suggests a generally positive track record and established capabilities in meeting defense research requirements.

How does the $35.5 million contract value compare to other R&D investments in combat support systems?

The $35.5 million contract value for R&D in combat support systems is a significant but not extraordinary figure within the context of large-scale defense modernization. The Department of Defense invests billions annually in research and development across various domains. Contracts of this magnitude are typical for specialized R&D efforts that require extensive engineering, testing, and analysis over several years. For instance, major platform upgrades or the development of entirely new technological capabilities can command contracts ranging from tens to hundreds of millions of dollars. This specific contract's value appears aligned with the scope of developing and refining combat support vehicles and systems, suggesting it represents a focused investment rather than a program-of-record level expenditure.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D revolve around cost control and ensuring optimal value. While the fixed fee provides the contractor with a predictable profit margin, the 'cost plus' element means the government bears the risk of actual costs incurred. If not managed diligently, this can lead to cost overruns, especially in R&D where unforeseen technical challenges or scope creep can significantly increase expenses. The contractor may have less incentive to control costs aggressively compared to fixed-price contracts, as their fee remains constant. Therefore, robust government oversight, detailed cost tracking, and clear definition of work are crucial to mitigate these risks and ensure the project stays within budget and delivers the intended R&D outcomes effectively.

What is the expected program effectiveness or return on investment for this R&D contract?

The expected program effectiveness and return on investment (ROI) for this R&D contract are inherently difficult to quantify at the outset, as is typical for research and development initiatives. The primary goal is to advance technologies and capabilities for Army combat support and combat services support vehicles and systems. Success will be measured by the successful development of prototypes, the validation of new technologies, and their potential integration into future military platforms. The ROI is realized through enhanced military readiness, improved soldier safety, increased operational efficiency, and maintaining a technological edge over adversaries. Quantifying this ROI often occurs years later, upon successful fielding of the developed technologies and their demonstrated impact on mission success and cost savings in operations.

How has spending on PEO CS&CSS R&D evolved over the past five years?

Analyzing historical spending patterns for PEO CS&CSS R&D requires access to detailed budget and contract databases beyond the scope of this single award. However, generally, spending in defense R&D, particularly for combat support systems, tends to fluctuate based on strategic priorities, technological advancements, and geopolitical needs. The Army's PEO CS&CSS portfolio is critical for modernizing its ground vehicle fleet and support infrastructure. It is reasonable to assume that spending in this area has been sustained or potentially increased in recent years, reflecting a broader DoD emphasis on readiness, modernization, and countering evolving threats. Specific year-over-year trends would need to be derived from aggregated spending data for the PEO CS&CSS portfolio.

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: $74,990,028

Exercised Options: $74,990,028

Current Obligation: $35,478,360

Actual Outlays: $674,373

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $6,891,988

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