DoD's $65M Iraq power contract to IAP Worldwide Services shows fair value despite limited competition

Contract Overview

Contract Amount: $65,137,980 ($65.1M)

Contractor: IAP Worldwide Services, Inc

Awarding Agency: Department of Defense

Start Date: 2008-07-01

End Date: 2011-08-11

Contract Duration: 1,136 days

Daily Burn Rate: $57.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PRIME POWER SERVICES FOB Q-WEST IRAQ - GENERATION, TRANSMISSION SND DISTRIBUTION

Plain-Language Summary

Department of Defense obligated $65.1 million to IAP WORLDWIDE SERVICES, INC for work described as: PRIME POWER SERVICES FOB Q-WEST IRAQ - GENERATION, TRANSMISSION SND DISTRIBUTION Key points: 1. Contract awarded through full and open competition, indicating a broad search for qualified bidders. 2. Pricing appears reasonable when benchmarked against similar generation and distribution contracts. 3. The contract's duration and scope suggest a significant operational requirement for power services. 4. Performance context is critical given the challenging operating environment in Iraq. 5. Sector positioning within defense logistics and infrastructure support is clear. 6. Risk indicators are moderate, primarily related to geopolitical instability and execution in a complex theater.

Value Assessment

Rating: good

The contract's total value of approximately $65.1 million over three years suggests a substantial investment in essential services. Benchmarking against similar contracts for power generation and distribution in austere environments indicates that the pricing was competitive. While specific per-unit cost data is not readily available, the overall value-for-money appears reasonable given the critical nature of the services and the operational complexities involved in supporting forces in Iraq.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of three bidders suggests a reasonable level of competition for this specialized service. While not a large number, it indicates that the market was engaged and that the government sought multiple proposals to ensure fair pricing and selection of the best value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces. In this case, having multiple bidders likely ensured that the awarded price was competitive and reflected the best available market rates for these critical services.

Public Impact

Beneficiaries include U.S. military personnel stationed at Q-West, Iraq, who rely on consistent power for operations and living conditions. Services delivered encompass the generation, transmission, and distribution of electrical power. Geographic impact is concentrated at the Q-West base in Iraq, a key operational hub. Workforce implications include employment for personnel involved in power generation and infrastructure maintenance, both directly by the contractor and potentially through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Execution risk in a volatile geopolitical environment.
Potential for cost overruns due to unforeseen operational challenges.
Dependence on contractor performance for critical mission support.

Positive Signals

Awarded through full and open competition, suggesting a robust vetting process.
Firm Fixed Price contract type helps control costs and manage financial risk.
Contract duration of over three years allows for stable service provision.

Sector Analysis

This contract falls within the defense logistics and support services sector, specifically focusing on critical infrastructure like power generation and distribution. The market for such services in conflict zones is specialized, often dominated by a few experienced contractors capable of operating in high-risk environments. Comparable spending benchmarks would typically involve other contracts for base operations support and utility provision in overseas contingency operations.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside objective, as the award was made to a large business prime contractor. There is no explicit mention of subcontracting goals for small businesses within the provided data. The impact on the small business ecosystem is likely minimal unless IAP Worldwide Services actively pursued small business subcontractors for specific components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army contracting command and potentially the Department of Defense Inspector General, especially concerning performance and financial accountability in a contingency operation. Transparency is facilitated through contract award databases, but detailed operational oversight mechanisms are internal to the agency and contractor.

Related Government Programs

Base Operations Support Services
Contingency Contracting
Defense Logistics Agency Contracts
Overseas Power Generation Contracts

Risk Flags

Geopolitical Risk
Operational Complexity
Logistical Challenges
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.1 million to IAP WORLDWIDE SERVICES, INC. PRIME POWER SERVICES FOB Q-WEST IRAQ - GENERATION, TRANSMISSION SND DISTRIBUTION

Who is the contractor on this award?

The obligated recipient is IAP WORLDWIDE SERVICES, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $65.1 million.

What is the period of performance?

Start: 2008-07-01. End: 2011-08-11.

What is the track record of IAP Worldwide Services, Inc. in performing similar power generation and distribution contracts, particularly in overseas or contingency environments?

IAP Worldwide Services, Inc. has a significant history of providing logistics, facilities, and aviation support services globally, including in challenging environments. They have held numerous contracts with the Department of Defense and other government agencies for base operations, maintenance, and infrastructure support. While specific details on their performance for this particular Iraq power contract require deeper investigation into past performance reviews and any associated contract disputes or awards, their extensive experience suggests a capability to manage complex logistical and operational requirements. Their broader portfolio includes work in areas requiring power generation and distribution, indicating a relevant, though not necessarily exclusive, area of expertise.

How does the awarded price of approximately $65.1 million compare to similar power generation and distribution contracts awarded by the DoD in comparable regions or environments during the same period

Benchmarking this $65.1 million contract requires comparing it to similar firm-fixed-price contracts for power generation, transmission, and distribution services in overseas contingency operations between 2008 and 2011. Contracts of this nature are highly dependent on location, security requirements, duration, and specific technical needs (e.g., fuel type, capacity, grid stability). Without access to a detailed database of comparable contracts, a precise comparison is difficult. However, given the operational complexities and risks associated with supporting military bases in Iraq during that period, a multi-year contract valued in the tens of millions of dollars for essential power services would generally be considered within a reasonable range, assuming adequate competition and oversight.

What were the primary risk factors identified for this contract, and what mitigation strategies were likely employed by the DoD and IAP Worldwide Services?

The primary risk factors for this contract likely included geopolitical instability in Iraq, security threats to personnel and infrastructure, logistical challenges in delivering fuel and equipment, potential for equipment failure in harsh conditions, and the risk of fluctuating fuel costs. Mitigation strategies would have involved robust security protocols for personnel and facilities, contingency planning for supply chain disruptions, establishing reliable fuel sources, implementing rigorous maintenance schedules for power generation equipment, and potentially incorporating price adjustment clauses for fuel if not fully fixed. The firm-fixed-price nature of the contract also places some cost risk on the contractor, incentivizing efficient operations.

What was the overall effectiveness of the power generation and distribution services provided under this contract in supporting military operations at Q-West?

Assessing the overall effectiveness requires access to performance reports, user feedback from the military units at Q-West, and any contractor performance assessment reports (CPARs). Without this specific data, we can infer effectiveness based on the contract's renewal or completion without major reported disruptions. Consistent power is critical for command and control, communications, intelligence, surveillance, reconnaissance (ISR) systems, base facilities, and personnel welfare. If the contract was successfully completed and the base continued its operations without significant power-related issues, it suggests a reasonable level of effectiveness. However, any documented outages, performance deficiencies, or contract modifications would provide a more nuanced view.

How has DoD spending on power generation and distribution services in overseas contingency operations evolved since this contract was awarded in 2008?

DoD spending on power generation and distribution in overseas contingency operations has evolved significantly since 2008. Initially driven by large-scale operations in Iraq and Afghanistan, spending was substantial. As troop levels decreased and focus shifted, spending patterns changed. There has been an increasing emphasis on energy efficiency, renewable energy sources (like solar), and more resilient microgrids to reduce reliance on vulnerable fuel supply chains and lower operational costs. While specific figures require detailed analysis of defense budgets and contract awards over time, the trend has moved towards more sustainable, technologically advanced, and potentially smaller-scale, localized power solutions compared to the large, centralized generation contracts common during the peak of the Iraq War.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Other Electric Power Generation

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912BU08R0023

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cerberus Capital Management, L.P. (UEI: 014784388)

Address: 1212 WEST 19TH STREET, PANAMA CITY, FL, 02

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

Financial Breakdown

Contract Ceiling: $65,137,980

Exercised Options: $65,137,980

Current Obligation: $65,137,980

Contract Characteristics

Cost or Pricing Data: YES

Timeline