Vectrus Systems LLC awarded $2.2B LOGCAP V contract for logistics support in Kuwait
Contract Overview
Contract Amount: $2,200,700,790 ($2.2B)
Contractor: Vectrus Systems LLC
Awarding Agency: Department of Defense
Start Date: 2019-04-12
End Date: 2026-06-30
Contract Duration: 2,636 days
Daily Burn Rate: $834.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: LOGISTICS CIVIL AUGMENTATION PROGRAM (LOGCAP) V SUPPORT SERVICES IN KUWAIT
Plain-Language Summary
Department of Defense obligated $2.20 billion to VECTRUS SYSTEMS LLC for work described as: LOGISTICS CIVIL AUGMENTATION PROGRAM (LOGCAP) V SUPPORT SERVICES IN KUWAIT Key points: 1. Contract provides essential logistics and base support services in a critical operational theater. 2. Vectrus Systems LLC, a significant player in government contracting, holds this award. 3. The contract utilizes a Cost Plus Fixed Fee (CPFF) pricing structure, which can incentivize cost control but also carries inherent risk. 4. Awarded under full and open competition, suggesting a robust bidding process. 5. The contract duration extends through June 2026, indicating a long-term commitment to these services. 6. The scale of the award suggests a substantial requirement for personnel and resources.
Value Assessment
Rating: fair
The contract's value of over $2.2 billion for logistics support in Kuwait is substantial. Benchmarking this against similar large-scale base operations support contracts in similar theaters is crucial. The CPFF structure requires careful monitoring to ensure cost efficiency and prevent overruns. Without specific performance metrics or detailed cost breakdowns, a definitive value-for-money assessment is challenging, but the scale suggests significant investment in operational readiness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of six awardees (implied by 'no': 6, though this data point is ambiguous in context of a single delivery order) suggests a competitive environment for the overall LOGCAP V program, which likely translated into competitive pricing for this specific delivery order. The full and open nature is generally positive for price discovery.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for services rendered. Full and open competition helps ensure that the government is not overpaying for essential logistics support.
Public Impact
U.S. military forces operating in Kuwait receive critical logistical and base support services. Ensures operational readiness and sustainment for deployed personnel. Supports the broader U.S. foreign policy and national security objectives in the Middle East. Potential for local employment opportunities in Kuwait, depending on subcontracting and hiring practices.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contracts can lead to cost overruns if not managed stringently.
- Long-term contracts of this magnitude carry inherent risks related to changing geopolitical landscapes and operational needs.
- Dependence on a single contractor for critical logistics in a potentially austere environment.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process.
- The contract supports vital military operations, indicating a clear and necessary requirement.
- Vectrus Systems LLC has experience in large-scale logistics support contracts.
Sector Analysis
This contract falls within the Facilities Support Services sector, a critical component of the broader defense logistics and support industry. The global market for defense logistics is substantial, driven by ongoing military operations and the need for robust supply chains and base operations. LOGCAP (Logistics Civil Augmentation Program) is a flagship program for the U.S. Army, designed to provide flexible and scalable support services, often in challenging environments. This contract represents a significant portion of that program's execution.
Small Business Impact
The provided data does not indicate if this contract included specific small business set-asides or subcontracting goals. However, given the scale and nature of LOGCAP contracts, there is often a significant opportunity for small businesses to participate as subcontractors to the prime contractor, Vectrus Systems LLC. Analysis of subcontracting plans would be necessary to fully assess the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the U.S. Army Contracting Command and the relevant program executive office. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight and auditing to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting requirements, but detailed operational performance data may be sensitive. Inspector General (IG) investigations could be initiated if fraud, waste, or abuse is suspected.
Related Government Programs
- Logistics Civil Augmentation Program (LOGCAP)
- Base Operations Support (BOS)
- Contingency Contracting
- Defense Logistics Services
Risk Flags
- Cost Overrun Potential (CPFF)
- Operational Disruption Risk
- Long-Term Dependency
Tags
defense, department-of-defense, department-of-the-army, logistics, facilities-support-services, full-and-open-competition, cost-plus-fixed-fee, kuwait, vectrus-systems-llc, large-contract, contingency-operations
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $2.20 billion to VECTRUS SYSTEMS LLC. LOGISTICS CIVIL AUGMENTATION PROGRAM (LOGCAP) V SUPPORT SERVICES IN KUWAIT
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 $2.20 billion.
What is the period of performance?
Start: 2019-04-12. End: 2026-06-30.
What is Vectrus Systems LLC's track record with large-scale logistics contracts, particularly with the Department of Defense?
Vectrus Systems LLC has a substantial history of performing large-scale logistics and base support services for the U.S. Department of Defense. They are a key incumbent on the LOGCAP program, having held previous iterations of the contract. Their experience includes providing a wide range of services such as base operations, maintenance, transportation, and supply chain management in various complex and often austere environments globally. This extensive background suggests a proven capability to manage contracts of this magnitude and complexity, although performance can vary across specific contracts and operational periods. Reviewing past performance evaluations and any contract disputes would provide a more granular understanding of their reliability and effectiveness.
How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar logistics services, and what are the associated risks?
The Cost Plus Fixed Fee (CPFF) structure is common for complex services where costs are difficult to estimate precisely upfront, such as large-scale logistics support in evolving operational theaters. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if requirements change but carries a higher risk of cost growth if the contractor's costs escalate. The primary risk for the government is that the contractor has less incentive to control costs compared to FFP, as costs are reimbursed. Robust oversight, detailed cost accounting, and clear definition of allowable costs are critical to mitigate this risk and ensure value for money.
What are the key performance indicators (KPIs) used to measure the success of this LOGCAP V contract, and how is performance monitored?
While specific KPIs for this delivery order are not publicly detailed, LOGCAP contracts typically include performance standards related to response times for services, availability of personnel and equipment, quality of maintenance, safety compliance, and overall mission support effectiveness. Performance is usually monitored through regular progress reports submitted by the contractor, site visits by government representatives, and formal performance evaluations conducted at specified intervals. The success of the contract hinges on the contractor's ability to meet these defined standards consistently, ensuring that military operations are not hindered by logistical deficiencies. Any failures to meet KPIs can result in contractual remedies or penalties.
What is the historical spending trend for the LOGCAP program, and how does this award fit into that pattern?
The LOGCAP program has historically represented a significant portion of the U.S. Army's service contracting budget, particularly for overseas contingency operations. Spending has fluctuated based on troop levels, operational tempo, and geopolitical requirements in regions like Afghanistan, Iraq, and now, potentially, other areas requiring sustained logistical support. The $2.2 billion award for LOGCAP V services in Kuwait is substantial and aligns with the program's historical scale, reflecting the ongoing need for comprehensive support services in key operational theaters. It indicates a continued reliance on contracted logistics to maintain military readiness and operational reach.
What are the potential risks associated with relying on a single contractor for such extensive logistics support in a potentially volatile region?
Relying on a single contractor like Vectrus Systems LLC for extensive logistics support in a region like Kuwait presents several risks. Firstly, there's a risk of vendor lock-in, where the government becomes highly dependent, potentially reducing leverage in future negotiations. Secondly, if the contractor experiences financial difficulties, labor disputes, or operational failures, it could severely disrupt critical military support. Thirdly, a sole reliance might stifle innovation if competition is limited. While LOGCAP V was competed, this specific delivery order is executed by one entity. Mitigating these risks involves strong contract management, contingency planning, and potentially fostering a competitive environment for future contract renewals or modifications.
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: $2,200,700,790
Exercised Options: $2,200,700,790
Current Obligation: $2,200,700,790
Actual Outlays: $30,172,299
Subaward Activity
Number of Subawards: 1432
Total Subaward Amount: $990,350,614
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
Start Date: 2019-04-12
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2026-01-12
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