DoD's $45.2M Marine Corps contract to KBR WYLE SERVICES, LLC for machinery repair shows fair value

Contract Overview

Contract Amount: $45,204,277 ($45.2M)

Contractor: KBR Wyle Services, LLC

Awarding Agency: Department of Defense

Start Date: 2017-10-01

End Date: 2018-09-30

Contract Duration: 364 days

Daily Burn Rate: $124.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: IGF::CT::IGF P&MCLS MARINE CORPS

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32226

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $45.2 million to KBR WYLE SERVICES, LLC for work described as: IGF::CT::IGF P&MCLS MARINE CORPS Key points: 1. The contract's value appears reasonable when benchmarked against similar repair and maintenance services. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The cost-plus award fee structure introduces some performance-based incentives but also potential for cost overruns. 4. The contract duration of one year is relatively short, allowing for periodic reassessment of needs and performance. 5. This contract falls within the broader category of industrial equipment repair, a critical support function for military readiness. 6. The geographic location in Florida may indicate specific operational needs or basing for the Marine Corps units served.

Value Assessment

Rating: good

The total award amount of $45.2 million for a one-year period for machinery repair and maintenance services appears to be within a reasonable range for contracts of this nature. Benchmarking against similar contracts for industrial equipment repair and maintenance for military branches suggests that the pricing is competitive. The cost-plus award fee (CPAF) structure, while allowing for flexibility and performance incentives, requires careful monitoring to ensure costs remain controlled and that the award fees are justified by exceptional performance. Without specific per-unit cost data, a definitive assessment is challenging, but the overall contract value seems aligned with market expectations for comprehensive support services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but the use of full and open competition generally fosters a competitive environment, which is beneficial for price discovery and achieving value for money. This approach allows the government to solicit proposals from a wide range of qualified contractors, increasing the likelihood of receiving competitive bids and innovative solutions.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider selection of qualified contractors, leading to better overall value and service delivery.

Public Impact

The primary beneficiaries are the U.S. Marine Corps units operating in or supported by facilities in Florida, ensuring their machinery and equipment are operational. The services delivered include repair and maintenance for commercial and industrial machinery and equipment, crucial for maintaining readiness. The geographic impact is concentrated in Florida, where the contract is being performed. The contract supports a workforce skilled in machinery repair and maintenance, contributing to specialized employment within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can incentivize cost growth if not rigorously managed.
Lack of specific per-unit cost data makes granular value assessment difficult.
The contract's performance period is relatively short, requiring timely renewal or re-competition.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Contractor (KBR WYLE SERVICES, LLC) likely has a track record in similar government service contracts.
Focus on essential repair and maintenance supports operational readiness.

Sector Analysis

This contract falls within the broader industrial equipment repair and maintenance sector, a vital component of the defense industrial base. The market for such services is substantial, driven by the continuous need to maintain complex machinery and equipment for operational readiness across various government agencies, particularly the Department of Defense. Comparable spending benchmarks for similar repair and maintenance contracts within the DoD often range in the tens to hundreds of millions of dollars annually, depending on the scope and duration. This specific contract represents a significant, albeit single-year, investment in ensuring the functionality of critical Marine Corps assets.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor, KBR WYLE SERVICES, LLC, will likely perform the majority of the work. While this may not directly benefit small businesses through set-asides or mandated subcontracting, the overall spending within the defense sector can indirectly support the small business ecosystem through supply chains and ancillary services, though direct impact is not evident here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. The cost-plus award fee structure necessitates close monitoring of expenditures and performance against defined award criteria. Transparency is generally maintained through contract reporting mechanisms and potential reviews by the Government Accountability Office (GAO) or the Department of Defense's Inspector General (IG) if performance or cost issues arise. The specific IG jurisdiction would likely be the DoD IG.

Related Government Programs

Defense Logistics Agency (DLA) Maintenance, Repair, and Operations (MRO) Contracts
Naval Sea Systems Command (NAVSEA) Ship Repair Contracts
Army Aviation and Missile Command (AMCOM) Logistics Support Contracts
Air Force Sustainment Center Maintenance Contracts

Risk Flags

Cost Overrun Risk (CPAF)
Performance Measurement Subjectivity
Potential for Disruption due to Natural Disasters (Florida)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.2 million to KBR WYLE SERVICES, LLC. IGF::CT::IGF P&MCLS MARINE CORPS

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 Navy).

What is the total obligated amount?

The obligated amount is $45.2 million.

What is the period of performance?

Start: 2017-10-01. End: 2018-09-30.

What is KBR WYLE SERVICES, LLC's track record with similar government contracts, particularly in machinery repair and maintenance?

KBR WYLE SERVICES, LLC, and its predecessors, have a substantial history of performing large-scale service contracts for the U.S. government, including extensive work in logistics, base operations support, and technical services for various military branches. Their experience often encompasses maintenance, repair, and overhaul (MRO) of complex equipment and systems. While specific details for this particular contract's performance are not detailed here, the company's general profile suggests a capacity to handle significant contracts within the defense sector. A deeper dive into their contract performance history, including past performance evaluations and any reported issues, would provide a more precise assessment of their reliability for this specific type of machinery repair and maintenance work.

How does the value of this contract compare to similar machinery repair and maintenance contracts awarded by the Department of Defense in recent years?

The $45.2 million award for a one-year period for machinery repair and maintenance aligns with the typical scale of such contracts within the DoD. Contracts for similar services, especially those supporting major military installations or specific equipment fleets, can range from tens to hundreds of millions of dollars annually. Factors influencing value include the type and complexity of machinery, the scope of maintenance (preventive vs. corrective), geographic location, and the specific contract type (e.g., cost-plus, fixed-price). Given the 'full and open competition' designation, the pricing is presumed to be competitive. However, a precise benchmark would require comparing specific service lines, equipment types, and performance metrics against other awarded contracts.

What are the primary risks associated with this Cost Plus Award Fee (CPAF) contract structure for machinery repair?

The primary risks associated with a CPAF contract for machinery repair involve potential cost overruns and the subjective nature of 'award fees.' While CPAF incentivizes performance beyond basic requirements, it can also lead to increased costs if the contractor's efforts to achieve higher award fees result in scope creep or less stringent cost control. Effective oversight is crucial to ensure that the government clearly defines performance objectives and that award fees are tied to demonstrable, objective achievements. Without robust monitoring, there's a risk that costs could escalate beyond initial estimates, and the 'award' portion might not reflect truly exceptional value, potentially impacting the overall cost-effectiveness for taxpayers.

What is the historical spending pattern for machinery repair and maintenance services by the Department of the Navy, and how does this contract fit within that trend?

The Department of the Navy historically allocates significant funds towards the maintenance, repair, and overhaul (MRO) of its vast array of equipment, including naval vessels, aircraft, vehicles, and shore-based industrial machinery. Spending patterns in this area are generally consistent, driven by operational tempo, equipment age, and readiness requirements. This $45.2 million contract for Marine Corps machinery repair represents a specific allocation within the broader Navy MRO budget. While it may appear substantial for a single contract, it is likely part of a larger, ongoing investment strategy to ensure the serviceability of critical assets. Analyzing trends would involve examining year-over-year spending on similar services across different Navy commands and installations.

What are the implications of performing this contract in Florida, considering the state's industrial base and potential for natural disasters?

Performing this machinery repair and maintenance contract in Florida has several implications. Florida possesses a significant industrial and defense-related economic base, which may provide access to a skilled workforce and relevant supply chains. However, the state is also prone to natural disasters, particularly hurricanes. This introduces a risk factor for contract performance, as severe weather events could disrupt operations, damage equipment, or impact personnel availability. The contract's terms and the contractor's contingency planning would need to address such potential disruptions to ensure continuity of essential repair and maintenance services for the Marine Corps, especially in maintaining operational readiness.

Industry Classification

NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

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

Address: 7000 COLUMBIA GATEWAY DR STE 100, COLUMBIA, MD, 21046

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

Financial Breakdown

Contract Ceiling: $45,204,277

Exercised Options: $45,204,277

Current Obligation: $45,204,277

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6700409D0020

IDV Type: IDC

Timeline