Vectrus Systems LLC awarded $589M for OMDAC in Southwest Asia, supporting US Network Enterprise Command

Contract Overview

Contract Amount: $589,286,738 ($589.3M)

Contractor: Vectrus Systems LLC

Awarding Agency: Department of Defense

Start Date: 2020-12-27

End Date: 2026-04-30

Contract Duration: 1,950 days

Daily Burn Rate: $302.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: OPERATIONS, MAINTENANCE, AND DEFENSE OF ARMY COMMUNICATIONS (OMDAC) IN SOUTHWEST ASIA AND CENTRAL ASIA IN SUPPORT OF THE UNITED STATES NETWORK ENTERPRISE COMMAND (NETCOM).

Plain-Language Summary

Department of Defense obligated $589.3 million to VECTRUS SYSTEMS LLC for work described as: OPERATIONS, MAINTENANCE, AND DEFENSE OF ARMY COMMUNICATIONS (OMDAC) IN SOUTHWEST ASIA AND CENTRAL ASIA IN SUPPORT OF THE UNITED STATES NETWORK ENTERPRISE COMMAND (NETCOM). Key points: 1. Contract value of $589.3 million over its period of performance. 2. Awarded under full and open competition, indicating a broad market solicitation. 3. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 4. Performance period extends through April 2026, suggesting a long-term operational requirement. 5. The North American Industry Classification System (NAICS) code 811213 points to communication equipment repair and maintenance services. 6. No small business set-aside was utilized for this significant contract.

Value Assessment

Rating: fair

The contract's value of $589.3 million over approximately 5.4 years represents a substantial investment in communication support. Benchmarking this against similar large-scale, long-duration defense support contracts is challenging without more specific service details. The Cost Plus Fixed Fee (CPFF) pricing structure introduces inherent risk for cost control, as contractor profit is guaranteed regardless of efficiency, though it allows for flexibility in evolving operational environments. The fixed fee component needs careful scrutiny to ensure it reflects a fair return for the contractor's efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors were invited to bid. The presence of 5 bids indicates a competitive environment, which is generally favorable for price discovery and achieving value for the government. The specific number of bidders (5) provides a moderate level of competition, which should help in obtaining reasonable pricing, though a higher number of bidders could potentially drive prices lower.

Taxpayer Impact: Full and open competition, with 5 bidders, suggests that taxpayers are likely benefiting from a competitive bidding process that should lead to more cost-effective service delivery compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries are the United States Network Enterprise Command (NETCOM) and its personnel operating in Southwest Asia and Central Asia. The contract ensures the availability and functionality of critical communication equipment and networks essential for military operations. Services delivered include maintenance, repair, and potentially installation of communication systems, vital for command and control. Geographic impact is focused on Southwest Asia and Central Asia, supporting US military presence and operations in these regions. Workforce implications include employment opportunities for technical personnel, both directly by the contractor and potentially through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending if not rigorously managed.
Long performance period (over 5 years) increases the risk of cost escalation due to inflation or changing requirements.
Geographic location in Southwest Asia presents logistical and security challenges that could impact costs.
Reliance on a single contractor for critical communications infrastructure raises concerns about vendor lock-in and future pricing power.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Multiple bidders (5) suggest a healthy competitive landscape for this type of service.
The contract supports critical military communications infrastructure, essential for national security.
Clear definition of services (repair and maintenance) provides a defined scope of work.

Sector Analysis

This contract falls within the broader defense sector, specifically focusing on IT and communications infrastructure support. The market for defense communications maintenance and operations is significant, driven by the need for reliable connectivity in complex operational environments. Companies like Vectrus Systems LLC specialize in providing these mission-critical services to government agencies. Comparable spending benchmarks would involve analyzing other large-scale contracts for similar support services in deployed regions, considering factors like duration, scope, and geographic challenges.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it indicate any specific subcontracting goals for small businesses in the provided data. This means that large businesses were the primary focus of the competition. The absence of set-aside provisions suggests that small businesses may have limited direct opportunities through this specific award, though they could potentially participate as subcontractors if the prime contractor opts to engage them.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army and potentially the US Network Enterprise Command (NETCOM). Accountability measures would be embedded in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated by the contract's award under full and open competition, making its existence and basic terms publicly accessible. Inspector General (IG) jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Global Base Support Services
Defense Communications Network Operations
Theater-Specific IT Support Contracts
Network Enterprise Command Operations
Contingency Communications Support

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Performance in a high-risk geographic area (Southwest Asia) introduces operational and security challenges.
Long contract duration increases potential for cost escalation and scope creep.
Sole-source provider for critical infrastructure raises concerns about long-term competition and pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $589.3 million to VECTRUS SYSTEMS LLC. OPERATIONS, MAINTENANCE, AND DEFENSE OF ARMY COMMUNICATIONS (OMDAC) IN SOUTHWEST ASIA AND CENTRAL ASIA IN SUPPORT OF THE UNITED STATES NETWORK ENTERPRISE COMMAND (NETCOM).

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 $589.3 million.

What is the period of performance?

Start: 2020-12-27. End: 2026-04-30.

What is the historical spending pattern for OMDAC services provided by the Department of the Army in Southwest Asia?

Analyzing historical spending for OMDAC services requires access to detailed contract databases and budget allocations over several fiscal years. Without specific historical data for this exact contract or similar predecessor contracts, it's difficult to establish a precise pattern. However, defense spending in operational theaters like Southwest Asia for communications and base support is typically substantial and can fluctuate based on geopolitical conditions, troop presence, and evolving mission requirements. Contracts for such services are often long-term due to the complexity and stability needed for operational infrastructure. The current award of $589.3 million over approximately 5.4 years suggests a significant and ongoing requirement for these services, consistent with sustained military operations in the region. Further analysis would involve comparing this award value to previous contract awards for similar services to identify trends in cost and scope.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar defense communication support services?

Cost Plus Fixed Fee (CPFF) contracts are common in defense for services where the scope of work is not precisely defined at the outset or is expected to evolve, such as research and development or complex support services in dynamic environments. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing their profit. This contrasts with Firm-Fixed-Price (FFP) contracts, where the price is set regardless of actual costs, incentivizing contractor efficiency but potentially leading to higher initial bids to cover risk. Cost-Reimbursement contracts (like Cost Plus Incentive Fee or Cost Plus Award Fee) offer different incentive structures. For defense communication support, FFP might be preferred for well-defined, stable requirements, while CPFF allows flexibility for evolving operational needs in regions like Southwest Asia, though it requires robust government oversight to control costs and prevent contractor inefficiencies from inflating the final price.

What are the key performance indicators (KPIs) typically used to measure the success of OMDAC contracts?

Key Performance Indicators (KPIs) for Operations, Maintenance, and Defense of Army Communications (OMDAC) contracts are crucial for ensuring mission effectiveness and value for money. Common KPIs often revolve around network availability and uptime (e.g., 99.9% availability for critical communication links), response times for maintenance and repair requests (e.g., resolving critical outages within 4 hours), and service level agreements (SLAs) for help desk support. Other metrics might include the successful implementation of system upgrades, adherence to security protocols, and user satisfaction surveys. For a contract like this, supporting the US Network Enterprise Command (NETCOM), KPIs would directly tie into ensuring seamless command and control capabilities. Performance is typically monitored through regular reporting, site visits, and potentially independent verification, with deviations often triggering contractual remedies or discussions.

What is Vectrus Systems LLC's track record with similar large-scale defense support contracts?

Vectrus Systems LLC has a significant track record in providing a wide range of services to the U.S. military and government agencies, particularly in logistics, IT, and base operations support, often in challenging overseas environments. They have held numerous large, complex contracts, including those involving communications, intelligence, and operational support. For instance, they have been involved in extensive base operations and support services in regions like Afghanistan and the Middle East. Their experience often includes managing large workforces, complex supply chains, and critical infrastructure. While specific performance details for every contract are not always public, their continued success in winning and performing on large-value, long-duration contracts suggests a generally positive track record in meeting government requirements for mission-critical support services. Reviewing past performance evaluations and contract awards can provide further insight into their capabilities and reliability.

How does the geographic location in Southwest Asia impact the cost and risk profile of this contract?

The geographic location in Southwest Asia significantly impacts both the cost and risk profile of this OMDAC contract. Costs are elevated due to logistical complexities, including transportation of personnel and equipment, potentially higher labor rates for personnel willing to serve in such environments, and the need for specialized security measures. The risk profile is also heightened due to potential political instability, security threats (requiring force protection measures), and the challenges of operating in remote or austere locations. These factors necessitate robust risk management strategies, including contingency planning, security protocols, and potentially higher contingency reserves within the contract's cost structure. The Cost Plus Fixed Fee (CPFF) nature of the contract allows for flexibility in addressing unforeseen costs arising from these environmental factors, but it also places a greater burden on government oversight to ensure costs remain reasonable and justified.

What are the potential implications of relying on a single contractor for critical communications infrastructure in a theater of operations?

Relying on a single contractor, like Vectrus Systems LLC in this case, for critical communications infrastructure in a theater of operations presents both advantages and disadvantages. The primary advantage is streamlined management and potentially greater efficiency through a unified approach to service delivery. However, it also introduces significant risks. A key concern is vendor lock-in, where the government becomes heavily dependent on the incumbent contractor, potentially limiting future competition and bargaining power, which could lead to higher prices in subsequent contract renewals. There's also the risk associated with the contractor's financial stability, operational performance, or potential security vulnerabilities. If the contractor fails to perform adequately or faces disruptions, the impact on critical military communications could be severe and immediate, potentially jeopardizing mission objectives. Robust oversight, clear performance metrics, and contingency planning are essential to mitigate these risks.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Communication Equipment Repair and Maintenance

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91RUS19R0018

Offers Received: 5

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: $640,897,262

Exercised Options: $640,897,262

Current Obligation: $589,286,738

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline