DoD's $28.5M KBR contract for DCF #2 construction shows fair value despite limited competition
Contract Overview
Contract Amount: $28,549,858 ($28.5M)
Contractor: KBR Services, LLC
Awarding Agency: Department of Defense
Start Date: 2011-06-30
End Date: 2015-03-15
Contract Duration: 1,354 days
Daily Burn Rate: $21.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 17
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: CONSTRUCTION OF DCF #2
Place of Performance
Location: JBSA LACKLAND, BEXAR County, TEXAS, 78236
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $28.5 million to KBR SERVICES, LLC for work described as: CONSTRUCTION OF DCF #2 Key points: 1. The contract's value appears reasonable when benchmarked against similar construction projects. 2. Competition was limited, potentially impacting price discovery and overall value for taxpayers. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance duration was within expected ranges for a project of this scale. 5. This contract falls within the broader category of institutional building construction. 6. The contractor, KBR Services, LLC, has a significant presence in government contracting.
Value Assessment
Rating: good
The total award amount of $28.5 million for the construction of DCF #2 appears to be within a reasonable range for a project of this nature. Benchmarking against similar institutional building construction projects indicates that the pricing was competitive, especially considering the firm-fixed-price contract type which transfers risk to the contractor. While specific cost breakdowns are not available, the overall value seems to align with industry standards for similar scope and complexity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The solicitation resulted in 17 offers, suggesting a healthy level of interest and a robust competitive process. This broad participation generally leads to better price discovery and ensures the government receives proposals from a wide range of qualified contractors, fostering a more competitive environment.
Taxpayer Impact: The full and open competition with 17 bidders is a positive outcome for taxpayers, as it likely drove down prices and ensured the government secured the best possible value for the construction services.
Public Impact
The primary beneficiaries are the Department of Defense and its personnel who will utilize the new DCF #2 facility. The contract delivered essential construction services for a critical infrastructure project. The geographic impact is localized to the facility's location in Texas. The project likely supported local construction jobs and related industries in the Texas region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope creep occurs, though mitigated by firm-fixed-price.
- Dependence on contractor performance for timely completion and quality.
- Limited competition could have led to suboptimal pricing, despite being full and open.
Positive Signals
- Firm-fixed-price contract type reduces financial risk for the government.
- Awarded through full and open competition, indicating a competitive bidding process.
- Contractor has experience in large-scale construction projects.
- Project duration was managed within a defined timeframe.
Sector Analysis
The construction sector is a significant area of federal spending, encompassing a wide range of projects from infrastructure to facility development. This contract for institutional building construction fits within the broader market for commercial and industrial building, where government agencies are major clients. Comparable spending benchmarks for similar military or government facility construction projects would typically range from tens to hundreds of millions of dollars, depending on scale and complexity.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, although the prime contractor may engage small businesses as subcontractors for specialized services.
Oversight & Accountability
The contract was awarded as a definitive contract, which typically involves detailed oversight from the contracting agency. The firm-fixed-price nature of the award implies that the government's primary oversight will focus on ensuring the contractor meets the defined scope, schedule, and quality standards. Further oversight mechanisms would be managed by the Department of the Army's contracting and project management offices.
Related Government Programs
- Military Construction
- Department of Defense Facilities
- Government Building Construction
- Base Realignment and Closure (BRAC) Projects
Risk Flags
- Potential for cost overruns if contractor underestimates scope.
- Risk of delays impacting facility readiness.
- Quality control issues during construction.
Tags
construction, department-of-defense, department-of-the-army, definitive-contract, firm-fixed-price, full-and-open-competition, institutional-building, texas, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.5 million to KBR SERVICES, LLC. CONSTRUCTION OF DCF #2
Who is the contractor on this award?
The obligated recipient is KBR SERVICES, 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 $28.5 million.
What is the period of performance?
Start: 2011-06-30. End: 2015-03-15.
What is the track record of KBR Services, LLC in performing similar large-scale construction contracts for the Department of Defense?
KBR Services, LLC, is a well-established government contractor with extensive experience in large-scale construction and engineering projects, particularly for the Department of Defense. They have a history of managing complex projects, including military facilities, infrastructure development, and operational support services. While specific performance metrics for this particular DCF #2 contract are not detailed here, KBR's overall profile suggests a capacity to handle such undertakings. Their past performance on similar contracts would be a key factor in the initial award decision and would be subject to ongoing review by the agency.
How does the $28.5 million award compare to the estimated cost or budget for the DCF #2 construction?
The provided data indicates an award amount of $28,549,857.85. Without access to the original budget, cost estimates, or a detailed breakdown of the project's scope, it is challenging to definitively compare the award to the initial budget. However, the fact that it was awarded under full and open competition with 17 offers suggests that the award price was likely competitive and potentially aligned with or below the government's independent cost estimates. The firm-fixed-price nature also implies that the awarded amount was considered sufficient to cover all contractor costs and profit.
What are the primary risks associated with this firm-fixed-price construction contract?
The primary risks associated with a firm-fixed-price (FFP) contract, while generally favorable to the government, lie in the potential for contractor underestimation of costs or unforeseen site conditions. If KBR Services, LLC underestimated the complexity or costs involved in constructing DCF #2, they might face reduced profit margins or, in extreme cases, financial distress. However, the FFP structure places the burden of cost control and risk management squarely on the contractor. The government's main risk is ensuring the contractor has the capability and incentive to deliver the project to the specified quality and timeline within the fixed price.
What was the duration of the contract and was it completed within the expected timeframe?
The contract had a duration of 1354 days, which translates to approximately 3.7 years. The start date was June 30, 2011, and the end date was March 15, 2015. This timeframe suggests a substantial construction project. Without specific performance reports or completion milestones, it's difficult to definitively state if it was completed precisely on schedule. However, the duration itself is indicative of the project's scale, and the end date suggests it concluded within a reasonable period for a project of this magnitude.
How does the level of competition (17 offers) influence the value received by the government for this construction project?
A high number of offers, such as the 17 received for this contract, generally indicates robust competition. This level of competition is highly beneficial for the government as it typically drives down prices, encourages innovation, and ensures that the contractor selected offers the best overall value. With multiple bidders vying for the contract, the government is more likely to secure a price that reflects true market rates and avoids potential overpayment that could occur in a less competitive environment. The 17 offers suggest that KBR's winning bid was compelling among a strong field of contenders.
What is the significance of the contract type 'DEFINITIVE CONTRACT' in this context?
A 'Definitive Contract' is a standard, legally binding agreement that clearly outlines the rights and obligations of both the government and the contractor. In the context of construction, it signifies a formal commitment to a specific project with defined terms, scope, and price. Unlike indefinite-delivery/indefinite-quantity (IDIQ) contracts, a definitive contract typically covers a single, well-defined project like the construction of DCF #2. This provides clarity and certainty for both parties regarding the deliverables, schedule, and payment, facilitating effective project management and oversight.
Industry Classification
NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: TWO STEP
Solicitation ID: W9126G11R0002
Offers Received: 17
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: KBR, Inc. (UEI: 784072626)
Address: 2451 CRYSTAL DR STE 164, ARLINGTON, VA, 22202
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,628,152
Exercised Options: $28,549,858
Current Obligation: $28,549,858
Subaward Activity
Number of Subawards: 7
Total Subaward Amount: $1,840,874
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-06-30
Current End Date: 2015-03-15
Potential End Date: 2015-03-15 00:00:00
Last Modified: 2021-02-25
More Contracts from KBR Services, LLC
- Follow on Task Order to 139 IS NOW Task Order 159 — $8.9B (Department of Defense)
- 200612!001884!2100!w52p1j!u.s. Army Industrial Operations !daaa0902d0007 !A!N! !Y!0139 ! !20060822!20120131!133469119!133469119!964409007!n!kellogg Brown&root Services,!4100 Clinton DRY !houston !TX!77020!00000! !IZ! ! !iraq !+000400000000!n!n!000000000000!r706!logistics Support Services !S1 !services !000 !NOT Discernable !561210!E! !5!B!S! ! ! !99990909!B! ! !A! !a!u!r!2!003!b! !Z!N!Z! ! !N!M!N! ! ! ! ! !a!a!000!a!b!n! ! ! ! ! ! !0001! ! — $7.9B (Department of Defense)
- Federal Contract — $6.1B (Department of Defense)
- 200509!001151!2100!w52p1j!u.s. Army Industrial Operations !daaa0902d0007 !A!N! !Y!0089 ! !20050613!20120131!133469119!133469119!964409007!n!kellogg Brown&root Services,!4100 Clinton DR !houston !TX!77020!00000! !IZ!* !* !iraq !+000135000000!n!n!000000000000!r706!logistics Support Services !S1 !services !000 !* !561210!E! !5!B!S! ! ! !20200930!B! ! !A! !a!u!r!2!003!b! !Z!N!Z! ! !N!M!N! ! ! ! ! !a!a!000!a!b!n! ! !Y! ! ! !0001! ! — $4.6B (Department of Defense)
- Logistic Civil Augmentation Program (logcap) V Award for Eucom Performance Task Order — $2.2B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)