Naval Facilities Engineering Command awarded $517M for Guam construction and maintenance services to KBR Services, LLC

Contract Overview

Contract Amount: $51,732,825 ($51.7M)

Contractor: KBR Services, LLC

Awarding Agency: Department of Defense

Start Date: 2003-02-10

End Date: 2007-05-31

Contract Duration: 1,571 days

Daily Burn Rate: $32.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Construction

Official Description: 200306!162741!1700!C2742 !NAVAL FACILITIES ENGINEERING COM!N6247000D0005 !A!N! !Y!KB11 !20030210!20030930!806560137!043296920!964409007!N!BROWN & ROOT SERVICES, A DIVIS!1550 WILSON BLVD !ARLINGTON !VA!22209!29350!010!66!FINEGAYAN STATION !GUAM !GUAM !+000006753300!N!N!000000000000!Z199!MAINT/OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !2000!NOT DISCERNABLE OR CLASSIFIED !236220!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!R!2!003!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! !N! !Y! ! !0001! !

Place of Performance

Location: YIGO, GUAM County, GUAM, 96929

Plain-Language Summary

Department of Defense obligated $51.7 million to KBR SERVICES, LLC for work described as: 200306!162741!1700!C2742 !NAVAL FACILITIES ENGINEERING COM!N6247000D0005 !A!N! !Y!KB11 !20030210!20030930!806560137!043296920!964409007!N!BROWN & ROOT SERVICES, A DIVIS!1550 WILSON BLVD !ARLINGTON !VA!22209!29350!010!66!FINEGAYAN STATION !GUAM … Key points: 1. Contract value of over $517 million indicates a significant investment in infrastructure and facilities. 2. The contract was awarded through full and open competition, suggesting a robust bidding process. 3. The duration of the contract (over 4 years) implies a long-term need for these services. 4. The services encompass maintenance and other miscellaneous building activities, highlighting a broad scope of work. 5. The geographic location in Guam suggests a focus on supporting military installations in the Pacific region. 6. The Cost Plus Award Fee (CPA) contract type allows for flexibility but requires careful oversight to manage costs and incentivize performance.

Value Assessment

Rating: good

The contract value of $517 million for a duration of over 4 years for construction and maintenance services in Guam appears to be within a reasonable range for large-scale base support. Benchmarking against similar large-scale construction and facilities maintenance contracts for overseas military installations would provide a more precise value-for-money assessment. The Cost Plus Award Fee (CPA) structure, while common for complex projects, necessitates diligent oversight to ensure costs are controlled and performance targets are met effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely invited to submit proposals. The presence of multiple bidders generally fosters a competitive environment, which can lead to more favorable pricing and better service offerings for the government. The specific number of bidders (3) suggests a healthy level of competition for this significant contract.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value through competitive pricing and encourages contractors to offer innovative solutions to win the bid.

Public Impact

Military personnel and their families stationed in Guam benefit from well-maintained and functional facilities. The contract supports the operational readiness of U.S. Naval facilities in the strategically important region of Guam. The services delivered include maintenance and construction, ensuring the upkeep and potential expansion of critical infrastructure. The geographic impact is concentrated in Guam, supporting the U.S. military's presence in the Indo-Pacific.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee (CPA) contracts can lead to cost overruns if not managed rigorously, as the contractor is reimbursed for allowable costs plus a fee that may be adjusted based on performance.
The long duration of the contract increases the risk of scope creep or changes in requirements that could impact the overall cost and schedule.
Reliance on a single contractor for such a broad range of services could create dependencies and potential vulnerabilities in service delivery.

Positive Signals

Awarding through full and open competition suggests a fair and transparent procurement process, likely resulting in competitive pricing.
The selection of KBR Services, LLC, a known entity in government contracting, may indicate a level of confidence in their capabilities and past performance.
The contract's focus on maintenance and construction addresses essential needs for facility upkeep and operational readiness.

Sector Analysis

This contract falls within the Construction and Facilities Maintenance sector, a critical component of government operations, particularly for overseas installations. The market for large-scale base support and construction services is dominated by a few major defense contractors. Spending in this sector is often driven by geopolitical considerations, military readiness requirements, and the need to maintain aging infrastructure. Comparable spending benchmarks would typically involve looking at other large base operating support contracts or major construction projects at similar overseas locations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary award went to a large business. The absence of small business set-aside provisions means that opportunities for small businesses to directly participate in this large contract may be limited, though they could potentially engage as subcontractors if KBR Services, LLC opts to utilize them.

Oversight & Accountability

The contract is a Cost Plus Award Fee (CPA) type, which inherently requires robust oversight to monitor costs, ensure compliance with contract terms, and evaluate performance against award criteria. The Naval Facilities Engineering Command (NAVFAC) would be responsible for administering the contract and overseeing the contractor's performance. Transparency would be facilitated through regular reporting requirements and potentially through public contract databases, though specific details of performance evaluations might be less accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Base Operating Support Services
Military Construction
Facilities Maintenance Contracts
Overseas Construction Projects

Risk Flags

Cost Plus Award Fee (CPA) contract type requires diligent oversight to manage costs and performance.
Long contract duration increases potential for scope creep and cost escalation.
Geographic location in Guam presents logistical challenges and potentially higher costs.
Contract awarded to a single large business may limit opportunities for small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.7 million to KBR SERVICES, LLC. 200306!162741!1700!C2742 !NAVAL FACILITIES ENGINEERING COM!N6247000D0005 !A!N! !Y!KB11 !20030210!20030930!806560137!043296920!964409007!N!BROWN & ROOT SERVICES, A DIVIS!1550 WILSON BLVD !ARLINGTON !VA!22209!29350!010!66!FINEGAYAN STATION !GUAM !GUAM !+000006753300!N!N!000000000000!Z199!MAINT/OTHER MISCELLANEOUS BUILDINGS !C2 !CONSTRUCTION !2000!NOT DISCERNABLE OR CLASSIFIED !236220!E! !5!B!S! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is KBR SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $51.7 million.

What is the period of performance?

Start: 2003-02-10. End: 2007-05-31.

What is KBR Services, LLC's track record with similar large-scale facilities maintenance and construction contracts, particularly for overseas military bases?

KBR Services, LLC, and its parent company KBR, Inc., have a long history of performing large-scale government contracts, including extensive work in base operations support, facilities maintenance, and construction for military installations worldwide. They have managed numerous contracts similar in scope and complexity to this one, often in challenging overseas environments. Their experience includes providing a wide range of services such as infrastructure repair, construction of new facilities, logistics support, and base operations. While specific performance details for every contract are not always public, KBR's sustained presence in the government contracting space suggests a generally accepted capability to execute such demanding projects. However, like any large contractor, they may have faced scrutiny or performance issues on specific contracts over their history, which would require a deeper dive into individual contract performance reports and government accountability documents.

How does the awarded amount of $517 million compare to the typical cost of similar base operating support and construction contracts in Guam or other Pacific territories?

The awarded amount of approximately $517 million for over four years of services (approximately $120-130 million per year) for base operating support and construction in Guam appears to be substantial, reflecting the high cost of operations and construction in remote island locations like Guam. Factors contributing to higher costs include logistics, transportation of materials and personnel, limited local resources, and the specific security and operational requirements of military installations. To benchmark effectively, one would compare this contract's annual value against other large Base Operating Support (BOS) contracts or major construction projects awarded by the Department of Defense or other federal agencies for similar island territories or remote overseas bases. Without specific comparable contract data readily available, it's difficult to definitively state if this represents a premium or a fair market value, but the scale suggests a significant undertaking.

What are the primary risks associated with a Cost Plus Award Fee (CPA) contract of this magnitude and duration?

The primary risks associated with a Cost Plus Award Fee (CPA) contract of this magnitude ($517 million) and duration (over 4 years) revolve around cost control and performance management. For the government, the risk is that the contractor may not manage costs efficiently, leading to expenditures exceeding initial estimates, as the contractor is reimbursed for allowable costs. The 'award fee' component introduces a performance incentive, but defining and measuring objective performance criteria can be challenging, potentially leading to disputes or subjective assessments. For the contractor, risks include the potential for disallowed costs, failure to meet performance targets which would reduce the award fee, and the complexities of managing a large, long-term project in a remote location. Effective government oversight is crucial to mitigate these risks by rigorously auditing costs, monitoring performance metrics, and ensuring clear communication.

What is the strategic importance of this contract for maintaining U.S. military readiness and presence in the Indo-Pacific region?

This contract is strategically vital for maintaining U.S. military readiness and presence in the Indo-Pacific region, particularly given Guam's role as a key strategic hub. Guam hosts significant naval and air force installations, serving as a critical forward-deployed base for power projection, intelligence gathering, and logistical support throughout the region. Ensuring the continuous maintenance and operational capability of these facilities through robust construction and upkeep services is paramount. The contract directly supports the infrastructure necessary for deploying and sustaining forces, responding to regional contingencies, and reinforcing alliances. Its value underscores the U.S. commitment to regional security and stability, enabling the effective execution of military operations and deterrence strategies in a dynamic geopolitical environment.

How has federal spending on construction and facilities maintenance for overseas bases evolved over the period this contract was active (2003-2007) and how does it compare to current trends?

During the period of this contract (2003-2007), federal spending on overseas base construction and maintenance was significantly influenced by the ongoing Global War on Terror (GWOT) and increased military operations in Iraq and Afghanistan. This led to substantial investments in upgrading and expanding facilities to support troop presence and operational requirements. Spending often focused on force protection, infrastructure modernization, and building new capabilities. Compared to current trends, while overseas base support remains critical, the focus may have shifted. Current spending patterns are influenced by evolving geopolitical threats, strategic rebalancing (e.g., towards the Indo-Pacific), and a greater emphasis on efficiency and sustainability. However, the fundamental need for robust infrastructure and maintenance at overseas installations persists, making contracts like this a consistent feature of federal defense spending, albeit with potentially different priorities and technological considerations today.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: KBR, Inc. (UEI: 784072626)

Address: 2451 CRYSTAL DR STE 675, ARLINGTON, VA, 08

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247000D0005

IDV Type: IDC

Timeline