DoD's $2.6B J-TECH II contract with JT4 LLC awarded for engineering services in Nevada

Contract Overview

Contract Amount: $2,615,162,840 ($2.6B)

Contractor: JT4 LLC

Awarding Agency: Department of Defense

Start Date: 2018-04-16

End Date: 2026-09-30

Contract Duration: 3,089 days

Daily Burn Rate: $846.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: JOINT RANGE TECHNICAL SERVICES (J-TECH II)

Place of Performance

Location: LAS VEGAS, CLARK County, NEVADA, 89119

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $2.62 billion to JT4 LLC for work described as: JOINT RANGE TECHNICAL SERVICES (J-TECH II) Key points: 1. Contract awarded to JT4 LLC for engineering services, with a significant total value. 2. The contract type is Cost Plus Award Fee, indicating performance-based incentives. 3. Services are primarily located in Nevada, suggesting a regional focus for this spending. 4. The contract duration is substantial, spanning over 8 years. 5. This contract falls under Engineering Services (NAICS 541330), a critical sector for defense operations. 6. The award was made under full and open competition, suggesting a broad search for qualified contractors.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. However, the Cost Plus Award Fee structure suggests an intent to incentivize efficiency and performance. Comparing to similar large-scale engineering services contracts within the Department of Defense would provide further context on its relative value. The total obligated amount of over $2.6 billion over its lifespan indicates a significant investment in specialized engineering capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple bidders were likely considered. The presence of multiple bidders generally fosters price discovery and can lead to more competitive pricing. The specific number of bids received is not detailed here, but the competitive process suggests a robust evaluation of various technical and cost proposals.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it aims to secure the best value by allowing a wide range of qualified contractors to compete, potentially driving down costs through market forces.

Public Impact

The Department of Defense benefits from specialized engineering services to support its operational and technological requirements. This contract likely supports advanced technological development, testing, and sustainment activities. The geographic impact is concentrated in Nevada, potentially creating local employment and economic activity. The contract may involve a significant workforce of engineers, technicians, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to cost overruns if not managed diligently, as the contractor is reimbursed for costs plus a fee that can be adjusted based on performance.
The long duration of the contract (over 8 years) could present risks related to technological obsolescence or shifts in defense priorities.
Reliance on a single contractor (JT4 LLC) for such a large and long-term engineering services contract could pose a risk if performance issues arise.

Positive Signals

The award through full and open competition suggests a thorough vetting process, likely resulting in a highly qualified contractor.
The Cost Plus Award Fee structure incentivizes contractor performance, potentially leading to higher quality outcomes and greater efficiency.
The substantial investment indicates a commitment to critical engineering capabilities deemed essential by the Department of Defense.

Sector Analysis

Engineering services are a vital component of the defense industrial base, encompassing a wide range of activities from research and development to system integration and lifecycle support. The market for these services is substantial, driven by the continuous need for technological advancement and modernization within military branches. This contract fits within the broader landscape of defense contracting, where specialized technical expertise is often outsourced to private firms. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the DoD or other federal agencies for similar types of services.

Small Business Impact

The provided data indicates that small business participation (sb) is marked as false, and there is no specific mention of small business set-asides for this contract. This suggests that the primary award was not specifically targeted towards small businesses. However, the prime contractor, JT4 LLC, may engage small businesses as subcontractors to fulfill certain aspects of the contract, which would be a key area for further investigation to understand the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency, the Department of the Air Force, through contract officers and program managers. Accountability measures are embedded within the Cost Plus Award Fee structure, which ties a portion of the contractor's compensation to performance. Transparency would be assessed through contract reporting mechanisms and public contract databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services Contracts
Aerospace Engineering Support
Military Technology Development
Department of Defense Research and Development
Air Force Systems Command Contracts

Risk Flags

Potential for cost overruns in CPAF contracts
Risk of technological obsolescence over contract duration
Dependency on a single contractor for critical services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.62 billion to JT4 LLC. JOINT RANGE TECHNICAL SERVICES (J-TECH II)

Who is the contractor on this award?

The obligated recipient is JT4 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 $2.62 billion.

What is the period of performance?

Start: 2018-04-16. End: 2026-09-30.

What is the historical spending pattern for JT4 LLC with the Department of Defense?

Analyzing the historical spending patterns for JT4 LLC with the Department of Defense requires access to detailed contract databases. However, the award of a $2.6 billion contract like J-TECH II suggests a significant and established relationship. Typically, contractors that receive such large awards have a proven track record of performance and have previously secured substantial contracts. Further investigation into historical awards, contract types, and performance reviews for JT4 LLC would provide a clearer picture of their past engagement with the DoD and their capacity to manage large-scale projects.

How does the per-unit cost of services under J-TECH II compare to similar engineering contracts?

Determining a precise per-unit cost for services under the J-TECH II contract is complex due to its Cost Plus Award Fee structure and the broad scope of engineering services it encompasses. A 'per-unit cost' would need to be defined based on specific deliverables, such as hours of engineering labor, specific project milestones, or system development phases. Benchmarking against similar contracts would involve identifying comparable services, contract types, and agencies, and then analyzing their cost structures. Without granular data on the specific services rendered and their associated costs, a direct per-unit comparison is not feasible from the provided summary data.

What are the key performance indicators (KPIs) used to evaluate JT4 LLC's performance under this contract?

The key performance indicators (KPIs) for the J-TECH II contract are not explicitly detailed in the summary data. However, as a Cost Plus Award Fee (CPAF) contract, performance is typically evaluated against pre-defined criteria related to technical execution, schedule adherence, cost control, and quality of deliverables. The 'Award Fee' component suggests that JT4 LLC's performance will be assessed, and a portion of their fee will be contingent upon meeting or exceeding these established KPIs. Specific KPIs would be outlined in the contract's Statement of Work (SOW) and performance assessment plan.

What is the risk profile associated with JT4 LLC as a contractor for this significant award?

The risk profile associated with JT4 LLC for this significant award can be assessed by considering several factors. The award through full and open competition suggests that JT4 LLC was deemed highly capable and competitive among potential bidders. The CPAF contract type, while incentivizing performance, also carries inherent risks related to cost management. A comprehensive risk assessment would also consider JT4 LLC's past performance on similar contracts, their financial stability, and any history of performance issues or disputes. The long duration of the contract introduces risks related to evolving technological landscapes and potential shifts in DoD priorities.

What is the projected impact of this contract on the Nevada economy and workforce?

The J-TECH II contract, with its significant value and concentration of services in Nevada, is likely to have a notable impact on the state's economy and workforce. This includes the potential creation of numerous high-skilled jobs for engineers, technicians, and support staff. Furthermore, the substantial contract value can stimulate local economic activity through direct spending, as well as indirect effects on supporting industries and businesses within Nevada. The long-term nature of the contract suggests sustained economic benefits and workforce development opportunities within the region.

How does the $2.6 billion total value compare to overall Department of Defense engineering services spending?

The $2.6 billion total value of the J-TECH II contract represents a significant investment within the Department of Defense's engineering services portfolio. To contextualize this, one would need to compare it against the DoD's total annual or multi-year spending on engineering services across all branches and agencies. The DoD's overall budget is in the hundreds of billions of dollars, and engineering services constitute a substantial portion of that. While $2.6 billion is a large sum for a single contract, it is likely a component of a much larger overall expenditure on critical engineering capabilities necessary for national defense.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA824015R7218

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 821GRIER DR, LAS VEGAS, NV, 89119

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

Financial Breakdown

Contract Ceiling: $5,276,537,670

Exercised Options: $2,620,424,318

Current Obligation: $2,615,162,840

Actual Outlays: $83,940,193

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $3,607,960

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline