DoD's $29M DynCorp Contract for Aviation/Weapon System Support: Fair Value?

Contract Overview

Contract Amount: $28,960,210 ($29.0M)

Contractor: Dyncorp International LLC

Awarding Agency: Department of Defense

Start Date: 2006-12-13

End Date: 2011-12-13

Contract Duration: 1,826 days

Daily Burn Rate: $15.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING, TECHNICAL, TEST, TRAINING, OPERATIONS AND MAINTENANCE SUPPORT FOR FOREIGN AVIATION EQUIPMENT AND FOREIGN GROUND WEAPON SYSTEMS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76177

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $29.0 million to DYNCORP INTERNATIONAL LLC for work described as: ENGINEERING, TECHNICAL, TEST, TRAINING, OPERATIONS AND MAINTENANCE SUPPORT FOR FOREIGN AVIATION EQUIPMENT AND FOREIGN GROUND WEAPON SYSTEMS Key points: 1. Contract awarded to DynCorp International LLC for engineering, technical, test, training, and O&M support. 2. The contract value is $28.96 million over 5 years. 3. Full and open competition was used, suggesting a competitive bidding process. 4. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully.

Value Assessment

Rating: fair

The $28.96 million contract value over 5 years averages approximately $5.8 million annually. Without specific benchmarks for similar foreign aviation and ground weapon system support contracts, assessing the precise value is challenging. However, the CPFF structure necessitates close monitoring to ensure costs remain reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders were considered. This method generally promotes competitive pricing and allows the government to select the best value offer. The fixed fee component provides some cost certainty for the government.

Taxpayer Impact: Taxpayer funds are used for this contract. While competition aims for efficiency, the CPFF structure requires diligent oversight to prevent unnecessary costs and ensure funds are spent effectively.

Public Impact

Supports critical foreign aviation and ground weapon systems, impacting national security and international relations. Ensures operational readiness and sustainment of vital military equipment for allied nations. The contract's duration and scope suggest a long-term commitment to supporting these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to increase costs.
Lack of specific performance metrics or benchmarks makes value assessment difficult.
Potential for scope creep in engineering and technical support services.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Contract supports critical defense systems for foreign partners.
Long-term contract provides stability for essential services.

Sector Analysis

This contract falls under Engineering Services (NAICS 541330). Spending in this sector often involves complex technical requirements and long project lifecycles. Benchmarks vary widely based on the specific systems supported and the level of expertise required.

Small Business Impact

The contract was awarded to DynCorp International LLC, a large business. There is no indication that small businesses were subcontracted for this specific award, which could be an area for potential improvement in future solicitations.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Robust oversight is crucial, especially with CPFF contracts, to ensure cost control, performance, and adherence to contract terms.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type.
Potential for cost overruns.
Lack of specific performance metrics in the provided data.
Long contract duration increases exposure to changing requirements or economic conditions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.0 million to DYNCORP INTERNATIONAL LLC. ENGINEERING, TECHNICAL, TEST, TRAINING, OPERATIONS AND MAINTENANCE SUPPORT FOR FOREIGN AVIATION EQUIPMENT AND FOREIGN GROUND WEAPON SYSTEMS

Who is the contractor on this award?

The obligated recipient is DYNCORP INTERNATIONAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $29.0 million.

What is the period of performance?

Start: 2006-12-13. End: 2011-12-13.

How does the fixed fee compare to industry standards for similar long-term, complex engineering support contracts?

Determining the 'fairness' of the fixed fee requires detailed analysis of the contractor's proposed costs, the complexity of the services, and the profit margins typical for similar long-term engineering support contracts in the defense sector. Without access to the contractor's cost breakdown and specific market data, a precise comparison is difficult. However, the government's procurement process, including competitive bidding, aims to ensure the fee is reasonable relative to the risks and effort involved.

What are the key performance indicators (KPIs) used to measure the effectiveness of DynCorp's support services?

Effective oversight of this contract would involve clearly defined Key Performance Indicators (KPIs) tied to technical performance, response times, training quality, and operational availability of the supported systems. The government should actively monitor these KPIs to ensure DynCorp meets its contractual obligations. Regular performance reviews and feedback mechanisms are essential for identifying and addressing any deficiencies promptly.

What is the potential for cost overruns given the Cost Plus Fixed Fee (CPFF) contract structure?

The CPFF structure carries inherent risks of cost overruns if not managed diligently. While the fee is fixed, the 'cost' portion is reimbursable. This means the contractor is incentivized to incur costs to perform the work, but the government bears the ultimate cost. Strong government oversight, detailed cost tracking, and clear definition of allowable costs are critical to mitigating this risk and ensuring the total contract cost remains within reasonable bounds.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W31P4Q06R0117

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cerberus Capital Management, L.P. (UEI: 014784388)

Address: 13500 HERITAGE PKWY, FORT WORTH, TX, 76177

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $72,169,734

Exercised Options: $28,960,348

Current Obligation: $28,960,210

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline