DoD's $51M Philippines Operations Support Contract awarded to Amentum Services, Inc. for facilities support

Contract Overview

Contract Amount: $51,115,558 ($51.1M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-01-28

End Date: 2026-03-31

Contract Duration: 1,523 days

Daily Burn Rate: $33.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: N62742-22-C-3507 PHILIPPINES OPERATIONS SUPPORT CONTRACT (POSC) IV

Plain-Language Summary

Department of Defense obligated $51.1 million to AMENTUM SERVICES, INC. for work described as: N62742-22-C-3507 PHILIPPINES OPERATIONS SUPPORT CONTRACT (POSC) IV Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Incentive Fee, which can incentivize cost control but also carries inherent risk. 3. Amentum Services, Inc. is the sole awardee, indicating they were selected as the best value. 4. The contract duration is over 1500 days, indicating a long-term need for these services. 5. The contract is for facilities support services, a critical component of operational readiness. 6. The base award amount is substantial, requiring careful monitoring of costs and performance.

Value Assessment

Rating: good

The contract's value of approximately $51 million over its period of performance appears reasonable for comprehensive facilities support services in a strategic overseas location. Benchmarking against similar large-scale overseas base operations and support contracts would provide a clearer picture of value for money. The Cost Plus Incentive Fee structure allows for performance-based adjustments, but requires diligent oversight to ensure costs remain within acceptable parameters and that incentives align with government objectives.

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 presence of three bidders suggests a healthy level of competition for this significant contract. The competitive process is expected to drive price discovery and ensure the government receives competitive pricing for the required services.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the most advantageous pricing and terms for the government, thereby optimizing the use of public funds.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel stationed in the Philippines, who will receive essential facilities support. Services delivered include a broad range of facilities maintenance, operations, and support functions critical for military readiness. The geographic impact is concentrated in the Philippines, supporting U.S. military presence and operations in the Indo-Pacific region. Workforce implications may include the creation or sustainment of jobs both domestically with the contractor and locally in the Philippines.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts require robust oversight to manage potential cost overruns and ensure incentive alignment.
The long duration of the contract necessitates ongoing performance monitoring to ensure sustained quality and value.
Reliance on a single contractor for critical support functions in an overseas location can present logistical and contingency risks.

Positive Signals

Awarded through full and open competition, indicating a robust and fair bidding process.
The contract aims to provide essential facilities support, crucial for maintaining operational readiness.
The contractor, Amentum Services, Inc., likely has experience in providing similar services, suggesting a degree of capability.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing a wide range of services necessary for the operation and maintenance of physical infrastructure. The global market for facilities management is substantial, with significant government spending allocated to maintaining overseas bases and installations. This contract represents a key component of the Department of Defense's strategy to ensure operational readiness and logistical support in the Indo-Pacific region.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this specific award. While there is no explicit small business set-aside, the prime contractor, Amentum Services, Inc., may engage small businesses as subcontractors. Further analysis would be needed to determine the extent of small business subcontracting and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, with specific contract officers and technical representatives responsible for monitoring performance, costs, and compliance. The Cost Plus Incentive Fee structure necessitates close financial oversight to ensure that costs are reasonable and that incentives are effectively driving desired outcomes. Transparency will depend on the reporting requirements stipulated in the contract and the agency's commitment to public disclosure.

Related Government Programs

Base Operations Support (BOS)
Overseas Facilities Maintenance
Logistics and Support Services
Department of Defense Infrastructure Contracts

Risk Flags

Potential for cost overruns due to CPIF structure.
Logistical challenges in overseas operations.
Geopolitical and security risks in the region.
Reliance on a single contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.1 million to AMENTUM SERVICES, INC.. N62742-22-C-3507 PHILIPPINES OPERATIONS SUPPORT CONTRACT (POSC) IV

Who is the contractor on this award?

The obligated recipient is AMENTUM SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $51.1 million.

What is the period of performance?

Start: 2022-01-28. End: 2026-03-31.

What is Amentum Services, Inc.'s track record with similar large-scale overseas support contracts?

Amentum Services, Inc. has a significant history of performing large-scale government contracts, including extensive experience in base operations support and facilities management, particularly for the Department of Defense in overseas locations. They have been awarded numerous contracts for services similar to those required under the Philippines Operations Support Contract (POSC) IV. Analyzing their past performance on contracts of comparable size, scope, and geographic complexity would provide insight into their capabilities, reliability, and potential risks. This includes reviewing past performance evaluations, any significant contract disputes or terminations, and their ability to manage complex supply chains and personnel in challenging environments. Their established presence in supporting military operations suggests a foundational understanding of the requirements, but specific project outcomes are key to a thorough assessment.

How does the pricing structure of this Cost Plus Incentive Fee (CPIF) contract compare to industry benchmarks for similar services?

The Cost Plus Incentive Fee (CPIF) structure is designed to incentivize cost savings and performance improvements by allowing the contractor to earn a higher profit if they meet or exceed certain targets, while sharing in any cost savings. Benchmarking the fee structure and target costs against industry standards for facilities support services in comparable overseas locations is crucial. This involves analyzing typical profit margins, incentive fee curves, and cost-sharing arrangements prevalent in the market. Without specific cost data and performance targets, a direct comparison is difficult. However, CPIF contracts generally aim to balance cost control with performance quality. The government's ability to effectively define and monitor these targets is paramount to ensuring value for money and preventing potential cost escalations if targets are poorly set or managed.

What are the primary risks associated with performing facilities support services in the Philippines under this contract?

Performing facilities support services in the Philippines presents several potential risks. Geopolitical stability and security concerns in the region, while generally manageable, require constant monitoring. Logistical challenges related to supply chain management, transportation of materials, and personnel deployment to and from the site can impact project timelines and costs. Labor relations and the availability of skilled local workforce are also critical factors. Furthermore, navigating local regulations, customs, and environmental compliance adds complexity. The long-term nature of the contract also exposes it to potential changes in government policy, funding priorities, or unforeseen environmental events. Effective risk mitigation strategies, including robust contingency planning and strong relationships with local authorities, are essential for successful contract execution.

How effective are the performance metrics and incentive mechanisms within this CPIF contract in driving desired outcomes?

The effectiveness of the performance metrics and incentive mechanisms within this CPIF contract hinges on their clarity, measurability, and alignment with the government's strategic objectives. Well-defined metrics for service delivery, response times, quality standards, and cost control are essential. The incentive structure must be carefully calibrated to motivate the contractor to achieve superior performance without encouraging excessive risk-taking or compromising safety and quality. Regular performance reviews and objective data collection are critical to ensure that incentives are fairly applied and that the government is achieving the intended benefits. If the metrics are vague or the incentives are not sufficiently motivating, the contract may not yield the desired value for money. Conversely, well-structured incentives can lead to significant cost savings and enhanced operational efficiency.

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

Historical spending trends for facilities support services by the Department of the Navy in the Indo-Pacific region have generally shown a consistent and significant allocation of resources. This is driven by the strategic importance of the region and the need to maintain a robust military presence. Spending typically fluctuates based on geopolitical developments, infrastructure modernization initiatives, and the scale of deployed forces. Contracts for base operations support, maintenance, and construction in areas like Guam, Japan, South Korea, and the Philippines represent a substantial portion of the Navy's overseas operational budget. Analyzing multi-year spending data can reveal patterns of increasing or decreasing investment, identify key areas of expenditure, and highlight any shifts in contracting strategies or priorities within the region.

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: N6274221R3507

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pae-Parsons Global Logistics Services, LLC

Address: 4800 WESTFIELDS BLVD STE 400, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $163,202,771

Exercised Options: $62,732,900

Current Obligation: $51,115,558

Actual Outlays: $15

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $1,205,221

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline