DoD's $30M Engineering Services Contract Awarded to KBR Wyle Services, LLC Shows Fair Value
Contract Overview
Contract Amount: $30,152,967 ($30.2M)
Contractor: KBR Wyle Services, LLC
Awarding Agency: Department of Defense
Start Date: 2014-04-15
End Date: 2021-04-30
Contract Duration: 2,572 days
Daily Burn Rate: $11.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF ENGINEERING, TECHNICAL, OPERATIONAL, TEST AND LOGISTICS SERVICES.
Place of Performance
Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $30.2 million to KBR WYLE SERVICES, LLC for work described as: IGF::OT::IGF ENGINEERING, TECHNICAL, OPERATIONAL, TEST AND LOGISTICS SERVICES. Key points: 1. Contract provides essential engineering, technical, operational, test, and logistics support. 2. Awarded via full and open competition, suggesting a competitive pricing environment. 3. Duration of over 7 years indicates a long-term need for these services. 4. The contract's value is moderate within the context of large-scale defense engineering. 5. Performance is tracked across multiple delivery orders, allowing for granular oversight. 6. The contractor has a significant presence in defense contracting.
Value Assessment
Rating: good
The contract's total value of approximately $30 million over more than seven years suggests a reasonable annual spend for specialized engineering and technical services. Benchmarking against similar large-scale engineering support contracts within the Department of Defense indicates that the pricing structure, while not explicitly detailed here, is likely competitive given the full and open competition. The cost-plus-fixed-fee (CPFF) structure, common in complex service contracts, allows for flexibility while aiming for cost control.
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 3 delivery orders suggests that multiple bids were likely received and evaluated, fostering price discovery and potentially leading to more favorable terms for the government. This competitive approach is a positive indicator for achieving value for taxpayer money.
Taxpayer Impact: Full and open competition generally leads to better pricing for the government by encouraging multiple vendors to offer their best terms, ultimately benefiting taxpayers through cost savings.
Public Impact
The Department of the Navy benefits from continuous engineering, technical, operational, test, and logistics support. Services are critical for maintaining and advancing naval capabilities. The contract supports specialized technical expertise, potentially impacting workforce development in engineering fields. Geographic impact is likely concentrated around naval facilities where these services are deployed.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed diligently.
- Long contract durations may require periodic re-evaluation of market rates to ensure continued value.
- Dependence on a single contractor for a broad range of services could pose a risk if performance degrades.
Positive Signals
- Awarded through full and open competition, indicating a robust bidding process.
- Multiple delivery orders allow for phased execution and performance monitoring.
- The contractor, KBR Wyle Services, LLC, is a well-established entity in defense contracting.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS code 541330), a critical component of the defense industrial base. The market for defense engineering services is substantial, with significant government spending allocated annually to support military readiness and technological advancement. This contract represents a portion of that broader spending, providing specialized expertise that complements in-house government capabilities and supports complex defense programs.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses, and there is no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem may be limited unless KBR Wyle Services, LLC actively engages small businesses as subcontractors. Further analysis of subcontracting reports would be needed to fully assess the impact.
Oversight & Accountability
Oversight for this contract is managed by the Department of the Navy. The use of multiple delivery orders allows for phased oversight and performance assessment. Accountability is typically managed through contract performance metrics and adherence to the terms of the cost-plus-fixed-fee agreement. Transparency is facilitated through contract award databases, though detailed performance data may be less publicly accessible.
Related Government Programs
- Defense Engineering Services
- Naval Operations Support
- Technical and Logistics Services
- Test and Evaluation Support
Risk Flags
- Potential for cost overruns in CPFF contracts.
- Long contract duration may require periodic market value reassessment.
- Dependence on a single contractor for critical services.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, kbr-wyle-services, cost-plus-fixed-fee, full-and-open-competition, delivery-order, maryland, technical-services, logistics-services, test-and-evaluation
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.2 million to KBR WYLE SERVICES, LLC. IGF::OT::IGF ENGINEERING, TECHNICAL, OPERATIONAL, TEST AND LOGISTICS SERVICES.
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 $30.2 million.
What is the period of performance?
Start: 2014-04-15. End: 2021-04-30.
What is the historical spending trend for engineering services contracts awarded by the Department of the Navy?
Historical spending on engineering services by the Department of the Navy has been substantial and generally increasing over the past decade, driven by modernization efforts, platform sustainment, and research and development initiatives. While specific figures fluctuate year-to-year based on budgetary allocations and program requirements, the Navy consistently invests billions annually in various engineering disciplines. This includes support for shipbuilding, aircraft maintenance, weapons systems development, and infrastructure projects. The trend reflects a continuous need for specialized technical expertise to maintain operational readiness and technological superiority in a complex geopolitical environment. Analyzing past spending patterns can help contextualize the $30 million awarded to KBR Wyle Services, LLC as part of a larger, ongoing investment in critical support functions.
How does the performance of KBR Wyle Services, LLC on similar contracts compare to industry benchmarks?
KBR Wyle Services, LLC has a significant track record in performing large-scale engineering and technical support contracts for various government agencies, including the Department of Defense. Benchmarking their performance requires access to detailed contract performance reports, which are not publicly available in full. However, general industry assessments and past performance reviews often indicate that established contractors like KBR Wyle Services, LLC typically meet or exceed performance expectations on contracts awarded through competitive processes. Their extensive experience suggests a mature understanding of government contracting requirements, risk management, and quality assurance. Any deviations from expected performance would likely be addressed through contract modifications, performance improvement plans, or, in extreme cases, termination for default, none of which are indicated for this specific contract based on the provided data.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for engineering services?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure, like the one awarded to KBR Wyle Services, LLC, revolve around cost control and potential for overruns. While the fixed fee provides the contractor with a guaranteed profit margin, the 'cost plus' element means the government reimburses the contractor for all allowable costs incurred. If the contractor's costs exceed initial estimates, the government bears that burden, potentially leading to a higher total contract price than anticipated. This risk is mitigated by robust government oversight, detailed cost accounting standards, and clear definitions of allowable costs. However, it requires diligent monitoring by the contracting officer and technical team to ensure that costs are reasonable, allocable, and necessary for contract performance. The contractor also faces a risk if they significantly underestimate costs, as their fixed fee remains constant, potentially reducing their overall profit margin.
What is the typical duration for engineering services contracts of this magnitude within the Department of Defense?
The typical duration for engineering services contracts of this magnitude within the Department of Defense can vary significantly based on the scope of work, the nature of the services, and the specific program requirements. Contracts can range from one to five years, often with options for extensions or renewals. Contracts with a duration of over seven years, such as this one (2,572 days is approximately 7 years), are not uncommon for complex, long-term support requirements, especially those involving sustainment, modernization, or research and development efforts that span multiple budget cycles. Such extended durations often reflect the strategic importance and ongoing nature of the services provided, aiming for continuity and stability. However, longer contracts also necessitate careful management to ensure continued alignment with evolving technological needs and market conditions.
How does the geographic location of contract performance (Maryland) influence the overall cost and execution of this contract?
The contract's performance location in Maryland (MD) is significant as it is a hub for defense activities, particularly for the Department of the Navy. Proximity to major naval commands, research facilities, and operational bases can streamline communication, collaboration, and on-site support, potentially reducing travel costs and logistical complexities. However, operating in a high-cost-of-living area like Maryland can also lead to higher labor costs for the contractor, which may be reflected in the overall contract pricing. The presence of a skilled workforce in the region is generally an advantage. The specific impact on cost and execution depends on whether the services are primarily performed at government facilities or the contractor's own sites within Maryland, and the extent of travel required to support various naval operations.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
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
Solicitation ID: N0002412R3023
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: KBR, Inc. (UEI: 784072626)
Address: 345 BOB HEATH DR, HUNTSVILLE, AL, 35806
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $48,283,637
Exercised Options: $45,889,877
Current Obligation: $30,152,967
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $1,618,996
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017805D4663
IDV Type: IDC
Timeline
Start Date: 2014-04-15
Current End Date: 2021-04-30
Potential End Date: 2021-04-30 00:00:00
Last Modified: 2021-02-03
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