DoD's $9.7M facilities support contract for WRM and IUA maintenance awarded to PAE Korea Limited

Contract Overview

Contract Amount: $9,731,888 ($9.7M)

Contractor: PAE Korea Limited

Awarding Agency: Department of Defense

Start Date: 2025-01-01

End Date: 2026-12-31

Contract Duration: 729 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS IS THIRD OPTION YEAR FOR MAINTENANCE, REPAIR, AND WAREHOUSING OF WRM AND IUA.

Plain-Language Summary

Department of Defense obligated $9.7 million to PAE KOREA LIMITED for work described as: THIS IS THIRD OPTION YEAR FOR MAINTENANCE, REPAIR, AND WAREHOUSING OF WRM AND IUA. Key points: 1. Contract is for the third option year, indicating ongoing need and contractor performance. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. Facilities Support Services (NAICS 561210) is a broad category with potential for cost variations. 5. The duration of 729 days (2 years) provides a stable period for service delivery. 6. The award is a Purchase Order, a common instrument for acquiring goods and services.

Value Assessment

Rating: fair

This contract represents the third option year for services, suggesting a degree of satisfaction with the incumbent contractor. However, without specific benchmarks for facilities support services in this region or for WRM/IUA specific needs, a precise value-for-money assessment is challenging. The firm fixed-price structure is generally favorable for the government in controlling costs, but the overall price relative to the scope of work and market rates for similar services requires further investigation. The contract value of approximately $9.7 million over two years averages to about $4.85 million annually.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. With 6 bidders participating, this suggests a reasonably competitive environment. The presence of multiple bidders generally aids in price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it likely resulted in a more competitive price and a wider range of potential solutions being considered.

Public Impact

The Department of Defense benefits from the continued maintenance, repair, and warehousing of War Reserve Materiel (WRM) and Individual Unit Allowables (IUA). This contract ensures the readiness and operational capability of critical military assets. Services are likely concentrated in the geographic area where PAE Korea Limited operates, supporting U.S. military installations or strategic locations. The contract supports jobs within the facilities support services sector, potentially including maintenance, logistics, and administrative roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics or service level agreements in the provided data makes it difficult to assess the quality of services delivered.
The contract is for option year three, raising questions about whether a more strategic long-term sourcing strategy has been considered.
The broad nature of 'Facilities Support Services' could encompass a wide range of activities, making it hard to pinpoint specific value without detailed scope.

Positive Signals

Awarded under full and open competition with multiple bidders, indicating a competitive process.
Firm Fixed Price contract type shifts cost overrun risk to the contractor.
This is an option year, suggesting the contractor has met performance expectations in previous periods.
The contract duration of two years provides stability for service delivery and planning.

Sector Analysis

Facilities Support Services (NAICS 561210) is a significant sector within government contracting, encompassing a wide array of services from building operations and maintenance to groundskeeping and custodial services. The global facilities management market is substantial, with government entities being major clients due to the extensive infrastructure they manage. This contract fits within the broader defense logistics and base operations support segment, where reliable maintenance and warehousing are critical for national security. Comparable spending benchmarks would typically involve analyzing other DoD contracts for similar services at various installations, considering factors like facility size, type, and geographic location.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no specific mention of small business set-asides (ss) or subcontracting plans (st, sn). This suggests that the contract was not specifically targeted towards small businesses, and there may be limited direct subcontracting opportunities for small businesses under this award. The impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver services within the agreed-upon price. Transparency is generally facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected or reported.

Related Government Programs

Department of Defense Base Operations Support
War Reserve Materiel (WRM) Logistics
Individual Unit Allowables (IUA) Management
Facilities Maintenance and Repair Contracts
Government Warehousing Services

Risk Flags

Potential for scope creep given the broad 'Facilities Support Services' category.
Reliance on option years may indicate a lack of long-term strategic sourcing.
Limited visibility into specific performance metrics and quality assurance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.7 million to PAE KOREA LIMITED. THIS IS THIRD OPTION YEAR FOR MAINTENANCE, REPAIR, AND WAREHOUSING OF WRM AND IUA.

Who is the contractor on this award?

The obligated recipient is PAE KOREA LIMITED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $9.7 million.

What is the period of performance?

Start: 2025-01-01. End: 2026-12-31.

What is the historical spending trend for this specific contract or similar services provided by PAE Korea Limited to the Department of Defense?

The provided data indicates this is the third option year for maintenance, repair, and warehousing of WRM and IUA, valued at $9,731,887.89. To assess historical spending trends, one would need to examine the contract values for the first two option years, as well as any preceding contracts for these services. If this is a continuation of a long-standing requirement, analyzing spending over multiple years would reveal if the costs have escalated, remained stable, or decreased. Without access to prior year data, it's impossible to determine the precise spending trajectory. However, the fact that it's the third option year suggests a consistent need and potentially stable or increasing funding, depending on the original contract's base year value and any negotiated adjustments in option periods.

How does the per-unit cost or overall value of this contract compare to industry benchmarks for similar facilities support services, particularly in the relevant geographic region?

A precise per-unit cost comparison is difficult without knowing the specific units of service (e.g., square footage maintained, number of repair calls, warehousing volume). However, the total contract value of approximately $9.73 million over two years equates to an average annual spend of roughly $4.87 million. To benchmark this, one would need to research industry reports on facilities management costs, factoring in the specific services (maintenance, repair, warehousing) and the geographic location (implied to be Korea, given the contractor's name). Factors like labor rates, material costs, and regulatory compliance in that region would influence benchmarks. Comparing this to similar-sized contracts for base operations support or facility maintenance at other DoD installations globally, adjusted for regional economic factors, would provide a more robust comparison. The full and open competition with six bidders suggests the market may have found this pricing competitive, but external benchmarks are crucial for a definitive assessment.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract, and how has the contractor performed against them?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, contracts of this nature would include metrics related to response times for repairs, maintenance completion rates, inventory accuracy for warehousing, safety compliance, and overall facility condition. Performance against these metrics would be documented in performance reports, quality assurance reviews, and potentially contractor performance assessment reporting (CPARS). As this is the third option year, it implies that the contractor, PAE Korea Limited, has likely met or exceeded minimum performance standards required to exercise subsequent option periods. However, without access to these specific performance records, a detailed assessment of their track record on quality and efficiency is not possible from the given information.

What is the risk profile of PAE Korea Limited as a contractor, considering their past performance and any potential financial or operational concerns?

Assessing the risk profile of PAE Korea Limited requires a review of their past performance history, particularly on contracts with the Department of Defense and similar government agencies. This would involve examining CPARS (Contractor Performance Assessment Reporting System) data, which provides ratings on technical performance, cost control, schedule adherence, and management. Additionally, financial stability checks and any history of litigation, debarment, or suspension would be relevant. Given that this is the third option year for a facilities support contract, it suggests a degree of confidence in their past performance. However, without direct access to CPARS or other risk assessment tools, a comprehensive evaluation of their risk profile is limited. The firm fixed-price nature of the contract shifts some financial risk to the contractor, which can be a positive indicator if the contractor is financially sound.

How does the scope of 'Facilities Support Services' for WRM and IUA differ from standard base operations support contracts, and what are the implications for cost and complexity?

Facilities Support Services for War Reserve Materiel (WRM) and Individual Unit Allowables (IUA) likely involve specialized requirements beyond standard base operations support. WRM typically includes equipment and supplies prepositioned for rapid deployment, requiring specific environmental controls (temperature, humidity), security, and inventory management protocols to ensure materiel readiness. IUA refers to essential items for individual soldiers or units, also needing careful storage and tracking. Standard base operations might focus more on general building maintenance, utilities, and groundskeeping. The specialized nature of WRM/IUA support could imply higher costs due to stringent storage requirements, specialized handling equipment, advanced inventory tracking systems, and potentially higher security measures. The complexity lies in maintaining the readiness and serviceability of these critical assets, which demands a higher level of expertise and diligence compared to routine facility upkeep.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 38 MAPO-DAERO, MAPO-GU, SEOUL

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $17,442,304

Exercised Options: $17,442,304

Current Obligation: $9,731,888

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline