DoD's $149M Philippines Operations Support contract awarded to DynCorp International shows fair value with 3 bidders

Contract Overview

Contract Amount: $148,967,500 ($149.0M)

Contractor: Dyncorp International LLC

Awarding Agency: Department of Defense

Start Date: 2012-06-04

End Date: 2017-08-31

Contract Duration: 1,914 days

Daily Burn Rate: $77.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: PHILIPPINES OPERATIONS SUPPORT (POS) IN THE REPUBLIC OF THE PHILIPPINES FOR THE JOINT SPECIAL OPERATIONS TASK FORCE - PHILIPPINES (JSOTF-P) WITHIN THE DESIGNATED JOINT OPERATION AREA (JOA) AND MANILA IN THE REPUBLIC OF THE PHILIPPINES.

Plain-Language Summary

Department of Defense obligated $149.0 million to DYNCORP INTERNATIONAL LLC for work described as: PHILIPPINES OPERATIONS SUPPORT (POS) IN THE REPUBLIC OF THE PHILIPPINES FOR THE JOINT SPECIAL OPERATIONS TASK FORCE - PHILIPPINES (JSOTF-P) WITHIN THE DESIGNATED JOINT OPERATION AREA (JOA) AND MANILA IN THE REPUBLIC OF THE PHILIPPINES. Key points: 1. The contract's value appears reasonable given the scope of support in a complex operational environment. 2. Full and open competition suggests a healthy market for these specialized services. 3. The duration of the contract (over 5 years) indicates a long-term need for these capabilities. 4. Performance risk is managed through an incentive fee structure. 5. This contract aligns with broader U.S. defense objectives in the Indo-Pacific region. 6. The cost-plus incentive fee structure aims to balance contractor performance with cost control.

Value Assessment

Rating: good

The contract's total value of approximately $149 million over five years suggests a significant investment in supporting special operations forces in the Philippines. Benchmarking against similar support contracts in overseas contingency operations is challenging due to unique geographic and operational factors. However, the presence of three bidders in a full and open competition indicates that the pricing was likely competitive. The cost-plus incentive fee (CPIF) structure allows for flexibility while incentivizing performance, which can lead to better value than fixed-price contracts in complex environments.

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. Three bids were received, indicating a moderate level of competition for this specialized service. While three bidders is not an exceptionally high number, it suggests that the market is not overly concentrated and that multiple companies possess the capability to perform this type of support. The competition likely contributed to establishing a fair market price.

Taxpayer Impact: The full and open competition process, even with three bidders, is beneficial for taxpayers as it encourages competitive pricing and ensures that the government explores a range of options, potentially leading to cost savings compared to sole-source or limited competition awards.

Public Impact

U.S. Special Operations Forces operating in the Philippines benefit from enhanced logistical and operational support. Services provided include facilities support, contributing to the operational readiness of JSOTF-P. The contract directly impacts the security and stability operations within the designated Joint Operation Area in the Philippines. Local workforce in the Philippines may benefit from employment opportunities generated by the contractor's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if performance targets are not met efficiently.
Geopolitical instability in the region could impact operational continuity and increase costs.
Reliance on a single contractor for critical support functions could pose risks if performance degrades.

Positive Signals

Award to a single, experienced contractor (DynCorp International) suggests a level of confidence in their ability to perform.
The use of an incentive fee structure aligns contractor goals with government objectives, promoting efficiency.
The contract's long duration implies a stable requirement and a commitment to sustained support.

Sector Analysis

This contract falls within the Facilities Support Services sector, which is a broad category encompassing a range of services necessary for the operation and maintenance of physical infrastructure. In the context of defense contracting, such services are critical for enabling military operations, particularly in overseas locations. The market for these services is competitive, with numerous providers capable of offering specialized support. The total U.S. federal spending on facilities support services is substantial, reflecting the government's extensive real estate and operational footprint.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned. DynCorp International is a large business. Therefore, the direct impact on small businesses through set-asides or mandated subcontracting is likely minimal for this specific award. However, large prime contractors often utilize small businesses as subcontractors, so there may be indirect opportunities depending on DynCorp's sourcing strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Performance monitoring, financial audits, and compliance checks are standard oversight mechanisms. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract. Transparency is facilitated through contract award databases like FPDS.

Related Government Programs

Joint Special Operations Command (JSOC) Support Contracts
Department of Defense Overseas Operations Support
Facilities Maintenance and Support Services
U.S. Indo-Pacific Command Support Contracts

Risk Flags

Geopolitical Instability
Logistical Complexity
Performance Risk in Contingency Operations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $149.0 million to DYNCORP INTERNATIONAL LLC. PHILIPPINES OPERATIONS SUPPORT (POS) IN THE REPUBLIC OF THE PHILIPPINES FOR THE JOINT SPECIAL OPERATIONS TASK FORCE - PHILIPPINES (JSOTF-P) WITHIN THE DESIGNATED JOINT OPERATION AREA (JOA) AND MANILA IN THE REPUBLIC OF THE PHILIPPINES.

Who is the contractor on this award?

The obligated recipient is DYNCORP INTERNATIONAL 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 $149.0 million.

What is the period of performance?

Start: 2012-06-04. End: 2017-08-31.

What is DynCorp International's track record with similar Department of Defense support contracts, particularly in overseas environments?

DynCorp International has a long history of providing aviation, logistics, and technical support services to the U.S. Department of Defense and other government agencies, often in complex and challenging overseas environments. They have held numerous large contracts supporting military operations in regions such as Afghanistan, Iraq, and Africa. Their experience includes base operations support, aircraft maintenance, and security services. While generally considered an experienced provider, like many large defense contractors, DynCorp has faced scrutiny and occasional controversies related to contract performance, cost management, and personnel conduct on past engagements. A thorough review of their performance on specific, comparable contracts would be necessary to fully assess their track record for this Philippines operations support requirement.

How does the cost-plus incentive fee (CPIF) structure compare to other contract types for this type of service, and what are its implications for value?

The Cost-Plus Incentive Fee (CPIF) contract type is often used when the government needs flexibility in scope or performance requirements, and when precise cost estimation is difficult, such as in supporting overseas operations. Under a CPIF contract, the contractor is reimbursed for allowable costs plus a fixed fee, but the fee is adjusted based on performance against pre-determined targets (e.g., cost, schedule, technical performance). This structure incentivizes the contractor to control costs and meet objectives to earn a higher fee. Compared to a Cost Plus Fixed Fee (CPFF) contract, CPIF offers greater potential for cost savings if targets are met. However, it can also lead to disputes over target setting and performance evaluation. For value, CPIF can be effective if targets are well-defined and achievable, aligning contractor and government interests. If targets are poorly set or performance is difficult to measure, it may not yield optimal value.

What are the primary risks associated with providing facilities support services to special operations forces in the Philippines, and how are they mitigated?

Primary risks include the volatile security environment in certain parts of the Philippines, potential logistical challenges due to remote locations and infrastructure limitations, and the need for highly specialized personnel capable of operating in a sensitive geopolitical context. Geopolitical risks, including potential changes in regional stability or host nation relations, also pose a threat. Mitigation strategies likely involve robust security protocols for personnel and facilities, contingency planning for supply chain disruptions, close coordination with the U.S. Embassy and local authorities, and stringent vetting and training for contractor personnel. The CPIF contract structure itself can mitigate performance risks by incentivizing the contractor to maintain operational effectiveness and manage resources efficiently.

What is the historical spending trend for similar facilities support services in the Indo-Pacific region by the Department of Defense?

Historical spending trends for facilities support services in the Indo-Pacific region by the Department of Defense have generally shown a steady increase, driven by strategic priorities, increased military presence, and ongoing operational requirements. Specific figures fluctuate based on geopolitical events, base realignments, and the scale of deployed forces. Contracts in this region often involve significant logistical complexities and higher operational costs compared to domestic support. While this specific $149 million contract is a substantial award, it represents a portion of the broader DoD spending in the region, which encompasses a wide array of services and infrastructure development. Analyzing aggregated spending data over the past decade would reveal patterns related to specific countries and types of support.

How does the number of bidders (3) in this full and open competition impact price discovery and potential savings for the government?

Having three bidders in a full and open competition provides a reasonable level of price discovery. While more bidders could potentially drive prices lower, three offers generally indicate that the market is sufficiently competitive to prevent a single entity from dictating terms. This number suggests that the government received multiple proposals representing different approaches and cost structures. The contracting officer would have evaluated these bids against the government's estimate and the evaluation criteria outlined in the solicitation. The presence of three competitors likely pressured each bidder to offer competitive pricing and terms to win the contract, thereby enhancing the potential for savings compared to a sole-source or limited competition scenario.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6274211R3525

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pae-Parsons Global Logistics Services, LLC

Address: 3190 FAIRVIEW PARK DR STE 700, FALLS CHURCH, VA, 22042

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $149,145,517

Exercised Options: $149,145,517

Current Obligation: $148,967,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline