Vectrus Systems LLC awarded $241M LOGCAP V contract for PACOM theater services, a significant investment in global logistics

Contract Overview

Contract Amount: $240,973,104 ($241.0M)

Contractor: Vectrus Systems LLC

Awarding Agency: Department of Defense

Start Date: 2019-04-12

End Date: 2026-05-02

Contract Duration: 2,577 days

Daily Burn Rate: $93.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LOGISTICS CIVIL AUGMENTATION PROGRAM (LOGCAP) V AWARD FOR PACOM SETTING THE THEATER SERVICES.

Plain-Language Summary

Department of Defense obligated $241.0 million to VECTRUS SYSTEMS LLC for work described as: LOGISTICS CIVIL AUGMENTATION PROGRAM (LOGCAP) V AWARD FOR PACOM SETTING THE THEATER SERVICES. Key points: 1. The contract's substantial value suggests a critical need for logistics support in the PACOM region. 2. Full and open competition was utilized, indicating a potentially competitive bidding process. 3. The contract duration of over 7 years presents long-term performance and cost management considerations. 4. Vectrus Systems LLC's performance on this contract will be a key indicator of their capability in large-scale logistics. 5. The award falls under Facilities Support Services, highlighting the importance of infrastructure and operational readiness. 6. The fixed-price contract type aims to provide cost certainty for the government.

Value Assessment

Rating: good

Benchmarking this contract's value requires comparison to similar large-scale logistics support contracts, particularly those in the Indo-Pacific region. The $241 million award over approximately 7 years suggests a significant but potentially reasonable investment given the scope of services. The firm fixed-price nature of the contract helps manage cost overruns, but the ultimate value for money will depend on the quality and efficiency of services delivered by Vectrus Systems LLC.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The presence of 6 bidders (no=6) indicates a healthy level of interest and competition for this significant logistics support requirement. This competitive environment is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: A competitive bidding process like this typically benefits taxpayers by driving down costs and encouraging better service offerings from contractors.

Public Impact

The primary beneficiaries are U.S. military forces operating within the U.S. Pacific Command (PACOM) area of responsibility, receiving essential logistical support. Services delivered include a broad range of facilities support, crucial for maintaining operational readiness and infrastructure. The geographic impact is concentrated within the PACOM theater, a vast and strategically important region. Workforce implications include potential job creation for support staff, technicians, and management personnel, both locally and potentially through U.S.-based hires.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration could lead to complacency or reduced innovation if not actively managed.
Geopolitical instability in the PACOM region could impact service delivery and increase operational risks.
Dependence on a single contractor for critical logistics functions poses a risk if performance falters.

Positive Signals

Award through full and open competition suggests a robust vetting of capabilities and pricing.
The firm fixed-price contract type provides cost predictability for the government.
Vectrus Systems LLC's established presence in logistics support indicates a degree of experience and capability.

Sector Analysis

This contract falls within the Facilities Support Services sector, a critical component of the broader defense and logistics industry. The global market for logistics support services is substantial, driven by military operations, disaster relief, and complex infrastructure projects. This award represents a significant portion of government spending dedicated to maintaining operational readiness and supporting deployed forces in a key strategic theater.

Small Business Impact

The data indicates that small business participation was not a primary set-aside component for this specific award (sb=false). While the prime contractor, Vectrus Systems LLC, is a large business, the contract's nature may involve subcontracting opportunities for specialized services. The extent of small business involvement will depend on Vectrus's subcontracting plan and the availability of small businesses capable of fulfilling specific support roles within the PACOM theater.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, with specific contracting officers and program managers responsible for monitoring performance, ensuring compliance, and approving payments. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

LOGCAP Program
Global Contingency Logistics Support
Defense Base Operations Support
Theater Support Services

Risk Flags

Long-term contract duration
Geopolitical risks in PACOM
Performance dependency on single contractor
Potential for cost escalation if scope changes

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $241.0 million to VECTRUS SYSTEMS LLC. LOGISTICS CIVIL AUGMENTATION PROGRAM (LOGCAP) V AWARD FOR PACOM SETTING THE THEATER SERVICES.

Who is the contractor on this award?

The obligated recipient is VECTRUS SYSTEMS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $241.0 million.

What is the period of performance?

Start: 2019-04-12. End: 2026-05-02.

What is Vectrus Systems LLC's track record with similar large-scale logistics contracts, particularly with the Department of Defense?

Vectrus Systems LLC has a significant history of performing large-scale logistics and base support contracts for the Department of Defense, including previous iterations of the LOGCAP program. Their experience often involves providing a wide array of services such as base operations, maintenance, transportation, and life support in complex and often austere environments. Analyzing their past performance metrics, including on-time delivery, quality of service, and adherence to budget on comparable contracts, is crucial for assessing their capability to execute the PACOM LOGCAP V award effectively. Past performance reviews and any documented issues or commendations would provide valuable context for this assessment.

How does the $241 million award compare to historical spending on similar logistics support in the PACOM theater?

Comparing the $241 million award for PACOM theater services to historical spending requires examining previous LOGCAP awards or similar large-scale support contracts within the U.S. Pacific Command's area of responsibility. The scale of this award suggests a sustained or potentially increased requirement for logistics support, possibly influenced by evolving geopolitical dynamics or increased operational tempo in the region. Historical data on contract values, durations, and the scope of services provided in prior years would establish a benchmark. Significant deviations from historical spending patterns, either higher or lower, warrant further investigation into the underlying reasons, such as changes in mission requirements, inflation, or competitive market conditions.

What are the primary risk indicators associated with this contract, considering its duration and geographic scope?

The primary risk indicators for this contract stem from its long duration (over 7 years) and its operation within the expansive and often volatile PACOM theater. Long-term contracts increase the risk of cost escalation due to inflation or unforeseen changes in requirements, and can also lead to contractor complacency if performance management is not rigorous. The geographic scope presents logistical challenges, potential security risks, and the need to navigate diverse regulatory and environmental conditions across multiple countries. Geopolitical instability within the PACOM region could disrupt supply chains, impact personnel safety, and affect the ability to deliver services consistently. Furthermore, dependence on a single contractor for critical functions introduces a performance risk if Vectrus Systems LLC encounters significant operational difficulties.

How effective is the firm fixed-price contract type in ensuring value for money for this specific logistics support requirement?

The firm fixed-price (FFP) contract type is generally favored for logistics support services like LOGCAP V because it shifts the risk of cost overruns to the contractor, Vectrus Systems LLC. This structure incentivizes the contractor to manage costs efficiently and deliver services within the agreed-upon price, thereby promoting value for money for the government. However, the effectiveness of FFP depends on the clarity of the contract's scope of work and the government's ability to accurately estimate costs upfront. If the scope is poorly defined or unforeseen circumstances arise, the contractor might face challenges, potentially leading to disputes or a reduction in service quality if they prioritize cost savings over performance. Robust performance monitoring by the government is essential to ensure that cost control does not compromise the quality and timeliness of essential logistics support.

What are the implications of having 6 bidders for this contract in terms of price discovery and competition?

Having 6 bidders for this LOGCAP V contract is a positive indicator of robust competition. A larger number of bidders generally leads to more competitive pricing as companies vie for the award. This scenario enhances price discovery, meaning the market is more likely to reveal a fair and reasonable price for the services required. It also increases the likelihood that the government will receive proposals offering a strong balance of cost and performance. The presence of multiple bidders suggests that the barriers to entry for this type of large-scale logistics support are manageable for several firms, fostering a dynamic market environment that benefits the procuring agency and, ultimately, the taxpayer.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vectrus, Inc.

Address: 2424 GARDEN OF THE GODS RD STE 300, COLORADO SPRINGS, CO, 80919

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

Financial Breakdown

Contract Ceiling: $240,973,104

Exercised Options: $240,973,104

Current Obligation: $240,973,104

Actual Outlays: $3,745,524

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J19D0045

IDV Type: IDC

Timeline