Navy awards $14.7M engineering services contract to KBR Wyle, citing sole-source justification

Contract Overview

Contract Amount: $14,692,067 ($14.7M)

Contractor: KBR Wyle Services, LLC

Awarding Agency: Department of Defense

Start Date: 2025-08-29

End Date: 2026-08-31

Contract Duration: 367 days

Daily Burn Rate: $40.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PROVIDING PROGRAM MANAGEMENT, ENGINEERING, FINANCIAL, AND LOGISTICS SUPPORT SERVICES FOR THE U.S. NAVY.

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $14.7 million to KBR WYLE SERVICES, LLC for work described as: PROVIDING PROGRAM MANAGEMENT, ENGINEERING, FINANCIAL, AND LOGISTICS SUPPORT SERVICES FOR THE U.S. NAVY. Key points: 1. Contract focuses on essential program management, engineering, financial, and logistics support for the U.S. Navy. 2. Sole-source award raises questions about potential missed opportunities for competitive pricing. 3. Contract duration of over a year suggests a need for sustained support services. 4. The award falls under engineering services, a critical sector for defense operations. 5. Geographic focus on Maryland indicates a concentration of Navy support infrastructure in the region.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without competitive bids. The $14.7 million award for 367 days of service suggests a significant daily rate. While KBR Wyle is a known entity in government contracting, the lack of competition prevents a robust assessment of whether this represents a fair market price or optimal value for the taxpayer. Further analysis would require comparing the scope of services to similar sole-source or competitively awarded contracts for program management and engineering support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or qualifications required for the service, or in cases of urgent need. The absence of a competitive bidding process limits the opportunity for price discovery and may result in a higher cost to the government than if multiple firms had competed.

Taxpayer Impact: Sole-source awards can mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding, potentially leading to higher overall program expenditures.

Public Impact

The U.S. Navy benefits directly through the provision of critical program management, engineering, financial, and logistics support. This contract ensures the continuity of essential services required for naval operations and readiness. The primary geographic impact is in Maryland, where the contractor will provide services, likely supporting local Navy installations and personnel. The contract supports a workforce skilled in program management, engineering, and logistics, contributing to the defense industry's employment base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source award requires further scrutiny.
Contract duration and value may indicate a need for more robust long-term strategic sourcing.

Positive Signals

Award to an established contractor like KBR Wyle suggests a degree of reliability and existing knowledge of Navy requirements.
Focus on essential support services indicates alignment with core defense mission objectives.
Contracting for program management and engineering is crucial for effective defense operations.

Sector Analysis

Engineering services represent a significant segment of the federal contracting market, particularly within the Department of Defense. This contract falls under the 'Engineering Services' NAICS code (541330). The market for these services is characterized by a mix of large, established firms and specialized smaller businesses. The Navy's reliance on such services underscores the importance of technical expertise and program management in maintaining its operational capabilities. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the DoD.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses in the provided data. The award to KBR Wyle, a large business, suggests that the scope and nature of the services were deemed best suited for a prime contractor of this size and capability. This may limit opportunities for small businesses to participate directly in this specific contract, although they may be involved in the broader defense supply chain.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy, likely through contracting officers and program managers responsible for monitoring performance and ensuring compliance with contract terms. As a Department of Defense contract, it may also be subject to review by the Department of Defense Office of Inspector General for issues related to fraud, waste, and abuse. Transparency regarding the sole-source justification and performance metrics will be key to assessing accountability.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Support Services
Department of Defense Program Management Support
Engineering and Technical Services Contracts
Logistics Support Services for Military Branches

Risk Flags

Sole-source award justification requires scrutiny.
Potential for cost overruns with CPFF contract type.
Short-term duration may impact long-term service continuity.
Limited transparency on performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.7 million to KBR WYLE SERVICES, LLC. PROVIDING PROGRAM MANAGEMENT, ENGINEERING, FINANCIAL, AND LOGISTICS SUPPORT SERVICES FOR THE U.S. NAVY.

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 $14.7 million.

What is the period of performance?

Start: 2025-08-29. End: 2026-08-31.

What is the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis to KBR Wyle Services, LLC?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. While the specific detailed justification is not included in the abbreviated data, typical reasons for sole-source awards include the unique capabilities of the contractor, urgent and compelling needs where competition is not feasible, or when only one responsible source exists. For this contract, the Navy would need to formally document why KBR Wyle was the only viable option, potentially citing proprietary knowledge, specialized equipment, or a critical, time-sensitive requirement that precluded a competitive solicitation process. Without the full justification document, it's difficult to assess the validity of the sole-source determination.

How does the cost structure (Cost Plus Fixed Fee) of this contract compare to industry standards for similar engineering and program management support services?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure is common in government contracting, especially for services where the scope may evolve or is difficult to define precisely upfront. However, CPFF contracts can incentivize cost overruns as the contractor's profit (the fixed fee) remains constant regardless of the final cost. Benchmarking this against industry standards requires comparing the fee percentage and the overall cost performance on similar Navy or DoD contracts. Without specific cost data and performance metrics, it's challenging to definitively state if this contract's fee is competitive or if it presents a higher risk of cost escalation compared to fixed-price or other cost-reimbursement types.

What is KBR Wyle Services, LLC's track record with the U.S. Navy and other federal agencies for providing similar program management and engineering support?

KBR Wyle Services, LLC, is a significant contractor with the U.S. federal government, including the Department of Defense and NASA. They have a history of providing a wide range of services, including engineering, program management, logistics, and technical support. Their experience often involves complex, large-scale projects. A detailed review of their past performance ratings, contract history, and any past performance issues or awards with the Navy would be necessary to fully assess their track record for this specific type of support. Generally, their presence in the federal contracting space suggests they possess the necessary qualifications and experience, but specific performance on similar contracts is key.

What are the potential risks associated with the 367-day duration of this contract and its implications for long-term service continuity for the Navy?

A contract duration of 367 days, while substantial, is relatively short-term in the context of ongoing defense program management and engineering needs. The primary risk is the potential for disruption in service continuity if a follow-on contract is not awarded in a timely manner or if the transition to a new contractor is not seamless. This could impact the Navy's operational tempo and project timelines. Furthermore, a short-term contract might discourage deep investment in process improvements or long-term strategic planning by the contractor, focusing instead on meeting the immediate requirements. The sole-source nature also means the Navy is reliant on KBR Wyle for this period without the leverage of competitive renewal.

How does the $14.7 million total award amount compare to historical spending patterns for similar engineering and program management support services by the Department of the Navy?

The $14.7 million award for approximately one year of service represents a significant investment. To compare this to historical spending, one would need to analyze the Navy's budget allocations and actual expenditures for engineering and program management support over previous fiscal years. This would involve looking at contracts with similar scopes of work, durations, and contractor types. Without access to detailed historical spending data and a clear definition of 'similar services,' it's difficult to provide a precise comparison. However, given the nature of defense support services, this amount is not unusual for large-scale, specialized requirements, but its value proposition is best assessed against competitive benchmarks or the criticality of the services provided.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Brown & Root Industrial Services Holdings, LLC

Address: 22309 EXPLORATION DR, LEXINGTON PARK, MD, 20653

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

Financial Breakdown

Contract Ceiling: $124,031,596

Exercised Options: $19,378,829

Current Obligation: $14,692,067

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline