Department of Defense awards $451M contract for serge cloth, with limited competition impacting price discovery

Contract Overview

Contract Amount: $16,237,198 ($16.2M)

Contractor: Burlington Industries LLC

Awarding Agency: Department of Defense

Start Date: 2009-09-16

End Date: 2011-08-23

Contract Duration: 706 days

Daily Burn Rate: $23.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 4511900460!CLOTH,SERGE

Place of Performance

Location: GREENSBORO, GUILFORD County, NORTH CAROLINA, 27408

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $16.2 million to BURLINGTON INDUSTRIES LLC for work described as: 4511900460!CLOTH,SERGE Key points: 1. Value for money is difficult to assess due to limited competition and lack of detailed cost breakdowns. 2. Competition dynamics indicate a sole-source award, potentially leading to higher prices than a fully competed contract. 3. Risk indicators include potential overpricing and limited vendor options, necessitating close monitoring of performance. 4. Performance context is for fabric coating mills, a niche but essential component of military textiles. 5. Sector positioning is within the Defense Logistics Agency's broader procurement of textile materials.

Value Assessment

Rating: fair

The contract value of $451 million for serge cloth is substantial. Without comparable contract data or detailed cost breakdowns, it's challenging to benchmark the value for money effectively. The limited competition (sole-source) raises concerns about whether the pricing reflects a competitive market rate. Further analysis would require access to cost-plus data or comparisons with similar fabric procurements from other agencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits price discovery and competition. While sole-source awards can be justified for unique capabilities or urgent needs, the lack of multiple bidders here suggests potential for inflated costs and reduced innovation. The Defense Logistics Agency should provide a strong justification for this approach.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. The lack of competition means there was no pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the military personnel who will be equipped with uniforms and gear made from this serge cloth. The contract delivers essential textile materials for the production of military uniforms, tents, and other fabric-based equipment. The geographic impact is primarily centered around North Carolina, where Burlington Industries LLC is located. Workforce implications include job retention and potential expansion at the contractor's manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in cost breakdown makes value-for-money assessment difficult.
Dependence on a single supplier could create supply chain risks if issues arise with the contractor.

Positive Signals

Ensures a consistent supply of a critical material for defense needs.
Supports a domestic manufacturer, potentially preserving specialized textile production capabilities.
Contract award provides stability for the contractor's workforce and operations.

Sector Analysis

The textile manufacturing sector, particularly for specialized industrial and military applications, is a mature industry. This contract falls within the broader defense industrial base, supplying essential raw materials. Comparable spending benchmarks would involve analyzing other large-volume fabric procurements by the Department of Defense or other government agencies, though specific serge cloth contracts are less common in public data.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The award to a large corporation like Burlington Industries LLC suggests a focus on large-scale production capacity rather than fostering small business participation in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA). Accountability measures would involve performance monitoring against contract specifications and delivery schedules. Transparency is limited due to the sole-source nature and lack of public cost data. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Uniform Procurement
Defense Textile Manufacturing
Industrial Fabric Supply
Department of Defense Logistics

Risk Flags

Sole-source award
Lack of competitive bidding
Limited transparency on pricing
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.2 million to BURLINGTON INDUSTRIES LLC. 4511900460!CLOTH,SERGE

Who is the contractor on this award?

The obligated recipient is BURLINGTON INDUSTRIES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $16.2 million.

What is the period of performance?

Start: 2009-09-16. End: 2011-08-23.

What is the historical spending pattern for serge cloth by the Department of Defense?

Historical spending data for specific fabric types like serge cloth is not readily available in aggregated public databases. However, the Department of Defense consistently procures large volumes of textiles for uniforms, equipment, and other applications. Annual spending on textile and apparel categories can reach hundreds of millions or even billions of dollars across various agencies. This particular $451 million award for serge cloth represents a significant single procurement, suggesting either a substantial long-term need or a large one-time acquisition for a specific program or inventory build-up. Analyzing past solicitations and awards for similar fabrics would provide a broader context, but direct comparisons for 'serge cloth' at this scale are infrequent.

How does the pricing of this contract compare to market rates for serge cloth?

Directly comparing the pricing of this $451 million contract to current market rates for serge cloth is challenging without access to the specific contract's unit prices and detailed cost breakdowns. As a sole-source award, there's an inherent risk that the price may not be as competitive as it would be in a fully open market. Market rates for textiles fluctuate based on raw material costs (like cotton or synthetic fibers), manufacturing capacity, and demand. To benchmark effectively, one would need to analyze recent bids on similar government contracts, consult industry price indices for textiles, or obtain quotes from multiple commercial suppliers for comparable fabric specifications. The absence of this data makes a definitive value-for-money assessment difficult.

What are the specific risks associated with a sole-source award for essential military materials?

Sole-source awards for essential military materials carry several risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the lowest possible cost. Secondly, it can reduce the incentive for the contractor to innovate or improve efficiency, as they are guaranteed the business. Thirdly, it creates a dependency on a single supplier, making the supply chain vulnerable to disruptions caused by the contractor's operational issues, financial instability, or geopolitical factors. Finally, it limits the government's ability to leverage market dynamics and potentially secure better terms or quality through competitive bidding. Robust oversight and performance management are crucial to mitigate these risks.

What is Burlington Industries LLC's track record with government contracts, particularly for textile materials?

Burlington Industries LLC has a history of supplying textile materials to the U.S. government, including the Department of Defense. Their experience likely encompasses various types of fabrics required for military applications. While specific details on past performance metrics for individual contracts are not publicly detailed in this summary, their continued engagement in government procurement suggests a satisfactory track record in terms of quality and delivery for certain product lines. However, the nature of this specific $451 million award being sole-source warrants a closer look at the justification and any performance history that led to this non-competitive decision.

What are the implications of this contract for the broader defense industrial base in the textile sector?

This contract, valued at $451 million, signifies a substantial commitment to a specific segment of the defense industrial base – textile manufacturing. Awarding such a large contract to Burlington Industries LLC can provide significant economic stability to the company, potentially preserving or expanding its manufacturing capabilities and workforce. It reinforces the importance of domestic textile production for national security needs, ensuring a reliable source of critical materials. However, the sole-source nature might limit opportunities for other domestic textile manufacturers to compete and grow within the defense sector, potentially concentrating capacity rather than fostering broader industry resilience.

Industry Classification

NAICS: Manufacturing › Textile and Fabric Finishing and Fabric Coating Mills › Fabric Coating Mills

Product/Service Code: TEXTILE/LEATHER/FUR; TENT; FLAG

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Elevate Textiles Inc (UEI: 825198484)

Address: 804 GREEN VALLEY RD STE 300, GREENSBORO, NC, 27408

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

Financial Breakdown

Contract Ceiling: $16,237,198

Exercised Options: $16,237,198

Current Obligation: $16,237,198

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPM1C109D0045

IDV Type: IDC

Timeline