PAE Government Services awarded $104M for facilities support, highlighting potential value concerns

Contract Overview

Contract Amount: $104,046,709 ($104.0M)

Contractor: PAE Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-01-17

End Date: 2012-05-31

Contract Duration: 500 days

Daily Burn Rate: $208.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: ADDITIONAL FUNDING AND SERVICES

Plain-Language Summary

Department of Defense obligated $104.0 million to PAE GOVERNMENT SERVICES, INC. for work described as: ADDITIONAL FUNDING AND SERVICES Key points: 1. The contract's cost-plus award fee structure may incentivize cost overruns. 2. Limited competition data available for this specific award. 3. The duration of the contract (500 days) suggests a need for ongoing services. 4. Facilities support services are critical for operational readiness. 5. The award was made under full and open competition, suggesting a broad search for qualified contractors. 6. The base contract value is not explicitly stated, making direct value assessment difficult.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without a clear breakdown of base cost versus award fee. The cost-plus award fee (CPAF) structure, while common for services where performance is hard to define upfront, can lead to higher final costs if not managed tightly. Comparing this to similar facilities support contracts would require detailed scope of work and performance metrics, which are not provided here. The awarded amount of $104M over approximately 1.5 years suggests a significant operational footprint.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the Department of the Navy sought proposals from all responsible sources. With 6 bidders identified, this suggests a reasonably competitive environment for this type of service. The level of competition is generally positive for price discovery, though the final negotiated price is influenced by the CPAF structure.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The Department of the Navy benefits from essential facilities support services, ensuring operational readiness. Services likely include maintenance, repair, and management of physical infrastructure at naval facilities. The geographic impact is tied to the specific naval installations where PAE Government Services operates. The contract supports a workforce involved in facilities management and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can lead to higher final costs than fixed-price contracts.
Lack of detailed performance metrics makes it difficult to assess the 'award' component's justification.
The significant dollar amount warrants close monitoring of expenditures and service delivery.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
The contractor, PAE Government Services, Inc., is a known entity in government contracting.
Facilities support is a critical and ongoing need for military operations.

Sector Analysis

Facilities Support Services (NAICS 561210) represent a significant segment of the government contracting market, encompassing a wide range of services from building maintenance to groundskeeping and operational support. This contract fits within the broader professional, scientific, and technical services sector. Comparable spending benchmarks would depend heavily on the specific scope of services and geographic location of the facilities supported.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While PAE Government Services, Inc. is a large business, there is no information provided regarding subcontracting plans or performance related to small business participation. Further investigation would be needed to determine if small businesses are involved in the supply chain for this contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations into potential fraud, waste, or abuse. Transparency is enhanced by the public nature of contract awards, but detailed performance and cost breakdowns may be less accessible.

Related Government Programs

Base Operations Support (BOS)
Logistics and Supply Chain Management
Facilities Engineering and Maintenance
Government Property Management

Risk Flags

Cost-Plus Award Fee structure may lead to cost overruns.
Limited public data on specific performance metrics and award fee payouts.
Potential for scope creep over the contract's duration.
Need for ongoing, robust oversight to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $104.0 million to PAE GOVERNMENT SERVICES, INC.. ADDITIONAL FUNDING AND SERVICES

Who is the contractor on this award?

The obligated recipient is PAE GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $104.0 million.

What is the period of performance?

Start: 2011-01-17. End: 2012-05-31.

What is the typical profit margin for Cost Plus Award Fee (CPAF) contracts in facilities support services?

Profit margins for Cost Plus Award Fee (CPAF) contracts can vary significantly based on the specific industry, the complexity of the services, and the perceived risk. For facilities support services, profit margins might typically range from 8% to 15% of the total contract cost, with the 'award fee' component allowing for additional profit based on exceeding performance expectations. However, the CPAF structure inherently carries a risk of cost growth, as the contractor is reimbursed for allowable costs plus a fee that is earned based on performance. Without specific details on PAE's performance metrics and the defined award fee criteria for this contract, it's difficult to pinpoint the exact profit realized. The total awarded amount of $104M suggests a substantial service delivery, and the fee structure aims to incentivize high performance while covering costs.

How does the $104M award compare to historical spending on facilities support by the Department of the Navy?

Comparing the $104 million award to historical spending requires access to detailed historical contract data for the Department of the Navy's facilities support services. This single award represents a significant investment over its approximately 500-day duration (roughly 1.5 years). To contextualize it, one would need to analyze the Navy's total annual or multi-year spending on similar services, identify trends in contract values, and understand if this award is an outlier or representative of typical contract sizes. Factors such as the specific installations supported, the scope of services (e.g., maintenance, construction, operations), and the economic climate at the time of award would influence historical comparisons. Without this broader dataset, it's challenging to definitively state whether $104M is high, low, or average relative to the Navy's historical spending patterns for facilities support.

What are the key performance indicators (KPIs) typically used to evaluate contractors for facilities support services under a CPAF contract?

Key Performance Indicators (KPIs) for facilities support services under a CPAF contract are designed to measure the contractor's effectiveness, efficiency, and responsiveness. Common KPIs include response times for service requests (e.g., maintenance, repairs), completion rates for scheduled maintenance, customer satisfaction scores from facility users, energy efficiency metrics, safety incident rates, and compliance with environmental regulations. For a CPAF contract, these KPIs are crucial as they directly influence the 'award fee' earned by the contractor. The government establishes specific targets and evaluation criteria for each KPI, and the contractor's performance against these targets determines the portion of the award fee they receive. Robust KPIs ensure that the contractor is incentivized to deliver high-quality services that meet or exceed the government's requirements.

What is the track record of PAE Government Services, Inc. in delivering facilities support services to the federal government?

PAE Government Services, Inc. (now part of Amentum) has a substantial track record in providing a wide array of services to the federal government, including extensive experience in facilities support, logistics, and base operations. They have historically managed large-scale contracts for various agencies, including the Department of Defense, often in complex and remote environments. Their experience spans maintenance, repair, operations, construction, and management of critical infrastructure. While specific performance details for individual contracts are not always publicly available, their continued success in winning significant government contracts suggests a generally positive performance history. However, as with any large contractor, there may be instances of performance issues or contract disputes on specific projects, which would require a deeper dive into contract databases and performance reports.

What are the potential risks associated with a 500-day contract duration for facilities support services?

A 500-day duration (approximately 1.5 years) for facilities support services presents several potential risks. Firstly, it necessitates a long-term commitment of resources and funding, requiring consistent budget allocation. Secondly, over this period, the condition of facilities can change, potentially leading to scope creep or the need for unforeseen repairs, which could impact costs if not managed contractually. Thirdly, there's a risk of contractor complacency or a decline in service quality over time if performance monitoring is not rigorous. Finally, market conditions, technology, and government requirements can evolve, potentially making the contracted services less optimal or efficient by the end of the term. Effective contract management, including regular performance reviews and flexibility for adjustments, is crucial to mitigate these risks.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Holding Corporation (UEI: 968071493)

Address: 888 S FIGUEROA ST STE 1760, LOS ANGELES, CA, 90

Business Categories: Category Business, Not Designated a Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $104,046,709

Exercised Options: $104,046,709

Current Obligation: $104,046,709

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N3319107D0207

IDV Type: IDC

Timeline