Thursday, July 19, 2007
Defense contractors challenge LOGCAP IV award, seek stay from GAO
Contracts
(Government Executive) - Faced with the prospect of missing out on the Army's most lucrative logistics contract in Iraq, a pair of teams of defense contractors is challenging the service's decision to award the work to three rival companies. Last week, Contingency Management Group LLC, a team composed of AECOM Government Services, Shaw Group and PAE Government Services, filed a protest with the Government Accountability Office, claiming that the Army's Sustainment Command improperly evaluated the group's proposal for the Logistics Civil Augmentation Program (LOGCAP) IV contract. The team is seeking a stay of the new contract until GAO can review the July 11 protest.
Two days later, IAP Worldwide Services Inc., a Cape Canaveral, Fla., contractor, filed its own protest, also citing improper technical or price evaluations, according to Michael Golden, GAO's chief procurement attorney. IAP led a team of contractors that included industry giants Lockheed Martin, CACI and Blackwater. Officials with Contingency Management Group and IAP both declined to discuss the reasons for the protest.
The Army awarded its mammoth 10-year LOGCAP IV contract last month to three firms: the incumbent contractor, Kellogg, Brown and Root Services of Houston; former contract holder DynCorp International LLC of Fort Worth, Texas; and Fluor Intercontinental Inc. of Greenville, S.C. The three companies are each capped at $5 billion per year, although the Army does not expect the firms to reach the maximum value in any given year.
A fourth contractor, Serco Inc. of Vienna, Va., was awarded a $225 million support contract last February. The Army says Serco will assist in its planning and provide independent cost estimates, but will not play any oversight role or conduct any inherently governmental work.
In an e-mailed statement, KBR deferred questions about the protests to the Army, stating only that the company is "proud to have been chosen as one of three logistics support providers under the LOGCAP IV contract. We look forward to continuing our service to the U.S. forces deployed in the Middle East."
The three prime contractors will compete to deliver fuel, water and food, as well as field operations such as postal services, laundry and sanitation, to troops stationed in Iraq and Afghanistan. The indefinite quantity/indefinite delivery contract has a one-year base with nine option years and could be worth as much as $150 billion.
The use of multiple contractors is a departure from the sole-source strategy the Army has employed since the first LOGCAP contract was awarded in 1992. The change is "designed to enhance competition and reduce overall risk," said Daniel Carlson, a spokesman for the Army.
Previous incarnations of the logistics contract relied primarily on cost-plus task orders in which the Army and the contractor negotiated a price based on an estimate and adjusted the cost as needed. The government then paid the contractor a base reimbursement fee -- typically 1 percent -- on every task order and an additional 2 percent award fee if the work was done efficiently and honestly.
But watchdogs say the contract has been prone to abuse. KBR, which until recently was a subsidiary of Halliburton, was roundly criticized for its work on the 2001 LOGCAP III contract. Reports by GAO, the Defense Department inspector general and the Defense Contract Audit Agency found KBR overbilled the government for fuel and failed to justify $1.8 billion worth of work in Iraq and Kuwait.
And just days after the Army awarded the LOGCAP IV contract, the Special Inspector General for Iraq Reconstruction released a report alleging that KBR provided its employees with better housing than U.S. soldiers, overspent on food by $4.5 million and failed to provide accurate measurements of the fuel services it provided. KBR is in the process of reviewing the report, company spokeswoman Heather Browne said.
DynCorp, meanwhile, has been rapped for providing vague invoices on a State Department contract in Iraq, while Fluor was heavily criticized for its work on a temporary housing contract for Gulf Coast residents in the wake of Hurricane Katrina.
The Army plans to begin using its new LOGCAP IV contract in October, although the protests could delay its implementation. KBR's current LOGCAP contract expires in December, but the Army could exercise an option and extend it if needed.
Two days later, IAP Worldwide Services Inc., a Cape Canaveral, Fla., contractor, filed its own protest, also citing improper technical or price evaluations, according to Michael Golden, GAO's chief procurement attorney. IAP led a team of contractors that included industry giants Lockheed Martin, CACI and Blackwater. Officials with Contingency Management Group and IAP both declined to discuss the reasons for the protest.
The Army awarded its mammoth 10-year LOGCAP IV contract last month to three firms: the incumbent contractor, Kellogg, Brown and Root Services of Houston; former contract holder DynCorp International LLC of Fort Worth, Texas; and Fluor Intercontinental Inc. of Greenville, S.C. The three companies are each capped at $5 billion per year, although the Army does not expect the firms to reach the maximum value in any given year.
A fourth contractor, Serco Inc. of Vienna, Va., was awarded a $225 million support contract last February. The Army says Serco will assist in its planning and provide independent cost estimates, but will not play any oversight role or conduct any inherently governmental work.
In an e-mailed statement, KBR deferred questions about the protests to the Army, stating only that the company is "proud to have been chosen as one of three logistics support providers under the LOGCAP IV contract. We look forward to continuing our service to the U.S. forces deployed in the Middle East."
The three prime contractors will compete to deliver fuel, water and food, as well as field operations such as postal services, laundry and sanitation, to troops stationed in Iraq and Afghanistan. The indefinite quantity/indefinite delivery contract has a one-year base with nine option years and could be worth as much as $150 billion.
The use of multiple contractors is a departure from the sole-source strategy the Army has employed since the first LOGCAP contract was awarded in 1992. The change is "designed to enhance competition and reduce overall risk," said Daniel Carlson, a spokesman for the Army.
Previous incarnations of the logistics contract relied primarily on cost-plus task orders in which the Army and the contractor negotiated a price based on an estimate and adjusted the cost as needed. The government then paid the contractor a base reimbursement fee -- typically 1 percent -- on every task order and an additional 2 percent award fee if the work was done efficiently and honestly.
But watchdogs say the contract has been prone to abuse. KBR, which until recently was a subsidiary of Halliburton, was roundly criticized for its work on the 2001 LOGCAP III contract. Reports by GAO, the Defense Department inspector general and the Defense Contract Audit Agency found KBR overbilled the government for fuel and failed to justify $1.8 billion worth of work in Iraq and Kuwait.
And just days after the Army awarded the LOGCAP IV contract, the Special Inspector General for Iraq Reconstruction released a report alleging that KBR provided its employees with better housing than U.S. soldiers, overspent on food by $4.5 million and failed to provide accurate measurements of the fuel services it provided. KBR is in the process of reviewing the report, company spokeswoman Heather Browne said.
DynCorp, meanwhile, has been rapped for providing vague invoices on a State Department contract in Iraq, while Fluor was heavily criticized for its work on a temporary housing contract for Gulf Coast residents in the wake of Hurricane Katrina.
The Army plans to begin using its new LOGCAP IV contract in October, although the protests could delay its implementation. KBR's current LOGCAP contract expires in December, but the Army could exercise an option and extend it if needed.
Labels: Blackwater, CACI, Contingency Management Group LLC, DynCorp, Fluor, GAO, Halliburton, IAP Worldwide Services Inc., KBR, Lockheed Martin, LOGCAP IV, PAE Government Services, Shaw Group
Monday, July 02, 2007
DynCorp Kuwaiti LOGCAP IV partner's shares up by 6.6 per cent
Contracts
(Gulf Daily News) - Kuwaiti logistics provider Agility said yesterday it was part of a group with US firm Dyncorp International which won a $50-billion (BD18-billion) deal from the US military. Agility shares rallied 6.6 per cent after the news. Agility said in a statement on the Kuwait bourse Web site it would provide various logistics, supply and warehousing services as part of the deal.
The contract would run 10 years, of which 9 were optional, and would have a value of $50bn for the whole period, it added. The deal, which included food and oil supply services, would be worth $5 billion for each year. Agility, which is diversifying its business and expanding abroad, said it could not currently determine its exact share of the deal.
The total deal also includes US firms KBR, a former unit of Halliburton, and Fluor Corporation with a combined potential value of up to $150 billion to provide services to the US military in the Middle East. Agility said on June 16 the US military had renewed a five-year deal worth $1.5 billion, extending the deal to its third consecutive year. The contract is up for yearly renewal.
The US government said on June 1 it had awarded Agility another supply and food deal worth up to $2.8 billion. Agility has said it was expanding in the Middle East, Africa or Eastern Europe to diversify its business and lower its exposure to US military deals, a key source of income.
Agility, previously known as Public Warehousing Co., has bought at least seven smaller rivals this year including New Zealand-based LEP International and Chinese freight company Guangzhou Runtang International Transport Company Limited.
Kuwait's money supply rose 15.6pc in the year to May, according to data on the Central Bank of Kuwait Website. M3, the broadest measured of money supply, rose to $60.36 billion. Money supply rose 18.3pc in the year to April.
The contract would run 10 years, of which 9 were optional, and would have a value of $50bn for the whole period, it added. The deal, which included food and oil supply services, would be worth $5 billion for each year. Agility, which is diversifying its business and expanding abroad, said it could not currently determine its exact share of the deal.
The total deal also includes US firms KBR, a former unit of Halliburton, and Fluor Corporation with a combined potential value of up to $150 billion to provide services to the US military in the Middle East. Agility said on June 16 the US military had renewed a five-year deal worth $1.5 billion, extending the deal to its third consecutive year. The contract is up for yearly renewal.
The US government said on June 1 it had awarded Agility another supply and food deal worth up to $2.8 billion. Agility has said it was expanding in the Middle East, Africa or Eastern Europe to diversify its business and lower its exposure to US military deals, a key source of income.
Agility, previously known as Public Warehousing Co., has bought at least seven smaller rivals this year including New Zealand-based LEP International and Chinese freight company Guangzhou Runtang International Transport Company Limited.
Kuwait's money supply rose 15.6pc in the year to May, according to data on the Central Bank of Kuwait Website. M3, the broadest measured of money supply, rose to $60.36 billion. Money supply rose 18.3pc in the year to April.
Labels: Agility Defense and Government Services, CH2M Hill, DynCorp International, Fluor Intercontinental, KBR, Kuwait, LOGCAP IV, Public Warehousing Co.
Friday, June 29, 2007
DynCorp to team up on LOGCAP IV contract
Contracts
(BUSINESS WIRE) - The U.S. Army Sustainment Command has selected DynCorp International as one of three providers of logistics support to the U.S. Army under the Logistics Civil Augmentation Program (LOGCAP) IV contract. The LOGCAP IV contract has a term of up to 10 years and a potential annual value to DynCorp International of $5 billion in gross revenue.
Under this contract, DynCorp International will support U.S. forces worldwide with immediate focus on those deployed in the Middle East. DynCorp International holds several important logistics and contingency contracts for the U.S. military, and was the sole holder of the LOGCAP II contract from 1997-2002. Dyncorp International is teamed with CH2M Hill and Agility Defense and Government Services (formerly PWC Logistics) for LOGCAP IV.
Under this contract, DynCorp International will support U.S. forces worldwide with immediate focus on those deployed in the Middle East. DynCorp International holds several important logistics and contingency contracts for the U.S. military, and was the sole holder of the LOGCAP II contract from 1997-2002. Dyncorp International is teamed with CH2M Hill and Agility Defense and Government Services (formerly PWC Logistics) for LOGCAP IV.
Labels: Agility Defense and Government Services, CH2M Hill, DynCorp International, LOGCAP IV, PWC Logistics
Thursday, June 28, 2007
LOGCAP IV awarded to Fluor, DynCorp and KBR
Contracts
(Washington Post) - The Army awarded a contract worth up to $150 billion to feed, house and provide other services to U.S. troops in Iraq, Afghanistan and Kuwait, spreading among three companies work that recently had been linked to a single, controversial contractor: Halliburton.
Fluor Intercontinental of Greenville, S.C., DynCorp International of Fort Worth and KBR of Houston were chosen from among a half-dozen competitors. Each company's part of the contract is worth up to $5 billion a year and can be extended for up to nine more years. The contract award was a particular victory for KBR, Halliburton's former contracting arm, after the firm was accused of misdeeds under the past contract, one contracting expert said.
"This is potentially the biggest battlefield services contract that any company is going to win for the remainder of this decade," Loren Thompson, chief operating officer of the Lexington Institute, a defense research organization in Arlington.
Known as the Logistics Civil Augmentation Program, or LOGCAP IV, the contract is considered one of the biggest deals in the contracting services industry. It has ballooned in value from $2 billion when it was first awarded in 1992 to $23 billion under the most recent LOGCAP III contract.
Two of the new winners have a history with the contract. KBR won the initial LOGCAP contract when support services were needed mainly in Bosnia. DynCorp won it in 1997 to do work in East Timor and the Philippines. And in 2001, it was again awarded to KBR to provide services in Afghanistan, Kuwait and, after the 2003 invasion, Iraq. Since then, the contract has come under scrutiny by members of Congress, and critics have alleged that KBR had an advantage in winning the 2001 contract because Vice President Cheney had been Halliburton's chief executive.
There have been other allegations of overcharging and poor record-keeping by KBR and lax oversight by the government. Government auditors turned up more than $1 billion in questionable costs. As of the end of May, KBR -- the largest single contractor in Iraq -- had been paid $19.7 billion for its work under the contract.
About 50,000 contractors work for KBR directly or as subcontractors to deliver services, and 500 government employees provide oversight of the logistics contract, according to Army officials.
Fluor Intercontinental of Greenville, S.C., DynCorp International of Fort Worth and KBR of Houston were chosen from among a half-dozen competitors. Each company's part of the contract is worth up to $5 billion a year and can be extended for up to nine more years. The contract award was a particular victory for KBR, Halliburton's former contracting arm, after the firm was accused of misdeeds under the past contract, one contracting expert said.
"This is potentially the biggest battlefield services contract that any company is going to win for the remainder of this decade," Loren Thompson, chief operating officer of the Lexington Institute, a defense research organization in Arlington.
Known as the Logistics Civil Augmentation Program, or LOGCAP IV, the contract is considered one of the biggest deals in the contracting services industry. It has ballooned in value from $2 billion when it was first awarded in 1992 to $23 billion under the most recent LOGCAP III contract.
Two of the new winners have a history with the contract. KBR won the initial LOGCAP contract when support services were needed mainly in Bosnia. DynCorp won it in 1997 to do work in East Timor and the Philippines. And in 2001, it was again awarded to KBR to provide services in Afghanistan, Kuwait and, after the 2003 invasion, Iraq. Since then, the contract has come under scrutiny by members of Congress, and critics have alleged that KBR had an advantage in winning the 2001 contract because Vice President Cheney had been Halliburton's chief executive.
There have been other allegations of overcharging and poor record-keeping by KBR and lax oversight by the government. Government auditors turned up more than $1 billion in questionable costs. As of the end of May, KBR -- the largest single contractor in Iraq -- had been paid $19.7 billion for its work under the contract.
About 50,000 contractors work for KBR directly or as subcontractors to deliver services, and 500 government employees provide oversight of the logistics contract, according to Army officials.
Last year, the Army decided to award the logistics contract to more than one company after concerns were raised about a lack of competition in giving such a large contract to one company. Under the new contract, the three companies will have to compete for each individual task order.
Labels: DynCorp International, Fluor Intercontinental, Halliburton, KBR, LOGCAP IV, Logistics Civil Augmentation Program
