DoD's LOGCAP V contract awards over $832M for PACOM-Kwajalein logistics support

Contract Overview

Contract Amount: $832,892,801 ($832.9M)

Contractor: Vectrus Systems LLC

Awarding Agency: Department of Defense

Start Date: 2019-04-12

End Date: 2026-09-30

Contract Duration: 2,728 days

Daily Burn Rate: $305.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: LOGISTICS CIVIL AUGUMENTATION PROGRAM (LOGCAP) V AWARD FOR PACOM-KWAJALEIN.

Place of Performance

Location: MARSHALL ISLANDS

Plain-Language Summary

Department of Defense obligated $832.9 million to VECTRUS SYSTEMS LLC for work described as: LOGISTICS CIVIL AUGUMENTATION PROGRAM (LOGCAP) V AWARD FOR PACOM-KWAJALEIN. Key points: 1. Contract provides essential facilities support services in a critical geographic region. 2. The contract's duration suggests a long-term need for these logistics capabilities. 3. Multiple delivery orders indicate ongoing requirements and potential for task order competition. 4. The cost-plus-fixed-fee structure requires careful monitoring of contractor performance and costs. 5. Vectrus Systems LLC is the primary contractor, suggesting a focus on established providers. 6. The Marshall Islands location presents unique logistical and operational challenges.

Value Assessment

Rating: good

This contract, part of the larger LOGCAP V program, provides significant logistics support. While specific per-unit cost data is not available, the fixed fee component allows for some cost predictability. Benchmarking against similar large-scale logistics contracts in remote or challenging environments would be necessary for a more precise value assessment. The overall award amount reflects the scale and complexity of operations in the PACOM-Kwajalein area.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of six bidders suggests a competitive environment for this significant logistics requirement. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for essential logistics services in a strategically important region.

Public Impact

Provides critical logistical and facilities support services to U.S. military operations in the Pacific. Ensures the readiness and operational effectiveness of forces stationed or operating in the PACOM-Kwajalein area. Supports the U.S. presence and strategic interests in the Indo-Pacific region. Likely involves a significant workforce, including local hires and specialized personnel, contributing to the regional economy. Facilitates the movement of personnel, equipment, and supplies, enabling mission accomplishment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize cost overruns if not closely managed.
The remote location may present unique challenges for oversight and performance monitoring.
Reliance on a single contractor for such a broad scope of services could create dependency.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
The contract is part of a larger, established program (LOGCAP V) with a track record.
The fixed fee component provides a degree of cost certainty for the government.

Sector Analysis

This contract falls within the Facilities Support Services sector, a critical component of defense logistics. The global facilities management market is substantial, with government contracts forming a significant portion. LOGCAP is a well-established program designed to provide comprehensive support to military operations worldwide, often in austere or complex environments. This specific award addresses the unique needs of the U.S. military presence in the Marshall Islands.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, large prime contractors like Vectrus Systems LLC are often required to meet subcontracting goals with small businesses. The scale of this contract suggests potential subcontracting opportunities for small businesses in various support roles, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. The fixed-fee structure necessitates close monitoring of performance against requirements and adherence to cost controls. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General's office would have jurisdiction to investigate any allegations of fraud, waste, or abuse.

Related Government Programs

LOGCAP IV
LOGCAP VI
Base Operations Support (BOS)
Contingency Base Services

Risk Flags

Potential for cost growth in CPFF contracts if not rigorously overseen.
Logistical complexities and higher costs associated with remote island operations.
Environmental considerations specific to the Marshall Islands.
Ensuring sustained performance over the contract's extended duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $832.9 million to VECTRUS SYSTEMS LLC. LOGISTICS CIVIL AUGUMENTATION PROGRAM (LOGCAP) V AWARD FOR PACOM-KWAJALEIN.

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 $832.9 million.

What is the period of performance?

Start: 2019-04-12. End: 2026-09-30.

What is the historical spending trend for the LOGCAP program, and how does this award compare?

The Logistics Civil Augmentation Program (LOGCAP) is a long-standing initiative by the U.S. military to contract out essential support services. Historically, LOGCAP contracts have been awarded in the billions of dollars across various iterations (LOGCAP III, IV, V). For instance, LOGCAP IV saw significant spending supporting operations in Afghanistan and Iraq. The LOGCAP V program, under which this award falls, is designed to provide similar services globally. The $832.89 million award for PACOM-Kwajalein represents a substantial, but not unprecedented, investment within the broader LOGCAP framework. It reflects the ongoing need for robust logistical support in the Indo-Pacific theater, aligning with the program's overall mission to provide flexible and scalable support to military operations.

How does the cost-plus-fixed-fee (CPFF) pricing structure impact value for money in this contract?

The Cost-Plus-Fixed-Fee (CPFF) pricing structure means the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This structure can be advantageous for complex projects where the scope might evolve, offering flexibility. For value for money, the key is the government's ability to effectively manage and audit the contractor's costs. The fixed fee provides some cost certainty, as it doesn't increase with actual costs. However, it places a greater burden on the government to ensure that the 'costs' incurred are reasonable, allocable, and necessary. If oversight is robust, CPFF can yield good value by ensuring necessary services are delivered. If oversight is weak, it can lead to cost inefficiencies, as the contractor has less incentive to control costs beyond what's needed to cover their expenses and earn their fee.

What are the primary risks associated with performing logistics support in the Marshall Islands under this contract?

Performing logistics support in the Marshall Islands presents several unique risks. Geographically, the remote island location entails significant logistical challenges for transporting personnel, equipment, and supplies, potentially increasing costs and lead times. Environmental factors, such as susceptibility to weather events and the need for specialized waste management, pose operational risks. Furthermore, the limited local infrastructure may require the contractor to establish and maintain extensive self-sufficient support systems. Security risks, while potentially lower than in active combat zones, still exist due to the strategic nature of the location and the need to protect assets. Finally, cultural and labor considerations, including navigating local regulations and workforce dynamics, add another layer of complexity.

What is Vectrus Systems LLC's track record with large-scale logistics contracts, particularly within the LOGCAP program?

Vectrus Systems LLC has a significant track record in providing logistics and base support services, including substantial involvement in the LOGCAP program. As a spin-off from Exelis (formerly ITT Corporation's defense arm), Vectrus inherited a legacy of supporting military operations. They have been a key contractor on LOGCAP IV and are now a prime awardee under LOGCAP V. Their experience spans various global theaters, demonstrating capability in managing complex, large-scale requirements similar to those outlined in this PACOM-Kwajalein contract. Their performance history on these types of contracts is a critical factor in assessing their suitability and the potential risks associated with their role.

How does the competition level (6 bidders) for this contract influence potential cost savings for the government?

Having six bidders for this contract suggests a healthy level of competition, which is generally beneficial for cost savings. A larger pool of qualified bidders increases the likelihood that the government will receive competitive proposals, driving down prices. It allows the contracting authority to compare different technical approaches and pricing structures, potentially identifying the most cost-effective solution. Furthermore, the knowledge that multiple competitors are vying for the contract incentivizes each bidder to offer their best possible pricing and terms to win the award. This contrasts with sole-source or limited-competition scenarios where the government may have less leverage to negotiate favorable terms.

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: COST PLUS FIXED FEE (U)

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: $832,892,801

Exercised Options: $832,892,801

Current Obligation: $832,892,801

Subaward Activity

Number of Subawards: 526

Total Subaward Amount: $245,670,124

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