DoD's $23.3M contract for automobile manufacturing services awarded to Defense Support Services International, LLC

Contract Overview

Contract Amount: $23,295,216 ($23.3M)

Contractor: Defense Support Services International, LLC

Awarding Agency: Department of Defense

Start Date: 2007-09-28

End Date: 2008-09-27

Contract Duration: 365 days

Daily Burn Rate: $63.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: LABOR HOURS

Sector: Other

Official Description: THE CONTRACTOR SHALL PROVIDE

Plain-Language Summary

Department of Defense obligated $23.3 million to DEFENSE SUPPORT SERVICES INTERNATIONAL, LLC for work described as: THE CONTRACTOR SHALL PROVIDE Key points: 1. Contract value of $23.3M for a 1-year duration. 2. Awarded under full and open competition. 3. Contract type is labor hours. 4. No small business set-aside was utilized. 5. The North American Industry Classification System (NAICS) code is 336111 (Automobile Manufacturing). 6. The contract was awarded by the Department of the Army.

Value Assessment

Rating: fair

The contract value of $23.3 million for a one-year duration appears to be within a reasonable range for specialized automobile manufacturing support services. Benchmarking against similar contracts is challenging without more specific details on the scope of work. However, the absence of detailed performance metrics makes a definitive value-for-money assessment difficult. The pricing structure, based on labor hours, can be susceptible to cost overruns if not closely managed.

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 bids. The presence of four bids suggests a moderate level of competition for this requirement. While competition is generally positive for price discovery, the specific number of bidders (four) does not necessarily guarantee the most competitive pricing without further analysis of the bids received.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down costs and ensuring the government receives competitive pricing.

Public Impact

The primary beneficiaries are the Department of Defense and the Department of the Army, receiving essential automobile manufacturing support services. Services delivered likely include manufacturing, assembly, or modification of vehicles and related components. The geographic impact is likely concentrated where the contractor's facilities are located or where the Army requires these services. Workforce implications include employment opportunities for skilled labor in the automotive manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to labor hour contract type if not managed effectively.
Limited transparency on specific performance metrics and quality control measures.
Dependence on a single contractor for a critical support function.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Contractor has a track record with the Department of Defense.
Clear contract duration of one year allows for periodic reassessment.

Sector Analysis

The automobile manufacturing sector (NAICS 336111) is a significant part of the industrial economy. Federal spending in this sector often relates to specialized vehicle needs for defense, research, or unique operational requirements. This contract, valued at $23.3 million, represents a specific instance of the government procuring services within this industry, likely for specialized military vehicle production or modification, rather than mass commercial vehicle procurement.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. Therefore, the primary contractor is likely a large business. There is no explicit information provided regarding subcontracting plans or requirements for small business participation. This means that opportunities for small businesses to participate in this contract may be limited unless the prime contractor voluntarily includes them in their supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally facilitated through contract award databases, but detailed operational oversight information is often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Vehicle Procurement
Military Vehicle Manufacturing Support
Automotive Industry Contracts
Defense Logistics Agency Support

Risk Flags

Potential for cost overruns due to labor hour contract type.
Limited detail on specific performance metrics and quality assurance.
Moderate competition level (4 bidders) may not represent the most aggressive pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.3 million to DEFENSE SUPPORT SERVICES INTERNATIONAL, LLC. THE CONTRACTOR SHALL PROVIDE

Who is the contractor on this award?

The obligated recipient is DEFENSE SUPPORT SERVICES INTERNATIONAL, 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 $23.3 million.

What is the period of performance?

Start: 2007-09-28. End: 2008-09-27.

What specific automobile manufacturing services were provided under this contract?

The provided data indicates the contract is for 'Automobile Manufacturing' services under NAICS code 336111. However, the specific nature of these services is not detailed. It could encompass a range of activities such as vehicle assembly, modification, specialized component manufacturing, or repair and overhaul of military vehicles. Without a detailed statement of work, it is difficult to ascertain the precise deliverables. The contract type being 'LABOR HOURS' suggests that the contractor is compensated based on the time spent by their personnel performing the required tasks, rather than fixed-price deliverables.

How does the $23.3 million contract value compare to similar government contracts for automobile manufacturing support?

Comparing the $23.3 million contract value requires context on the scope and duration. As a one-year contract, this represents a significant but not exceptionally large sum for specialized manufacturing services. Government contracts in the broader automotive sector can range from small R&D grants to multi-billion dollar procurements for large fleets or complex defense systems. For specialized support services, $23.3 million for a year's work is plausible. However, without knowing the specific services (e.g., prototype development vs. mass production support), direct comparison to other contracts is challenging. Benchmarking would ideally involve looking at contracts with similar NAICS codes and service descriptions.

What are the key risks associated with a 'LABOR HOURS' contract type for automobile manufacturing?

The primary risk with a 'LABOR HOURS' contract type is the potential for cost overruns. Since the contractor is paid based on the time spent, there is less direct incentive to control labor costs compared to a fixed-price contract. This necessitates robust oversight from the government to ensure that hours billed are reasonable, necessary, and productive. Scope creep can also be a significant risk, as additional labor hours may be requested without a corresponding increase in the contract ceiling, potentially leading to budget challenges. Effective project management and diligent monitoring of labor hours are crucial to mitigate these risks.

What is the significance of awarding this contract under 'FULL AND OPEN COMPETITION' with four bidders?

Awarding this contract under 'FULL AND OPEN COMPETITION' signifies that the Department of the Army sought bids from all eligible and responsible sources, maximizing the potential pool of offerors. The fact that four bids were received suggests a reasonable level of interest and competition for these automobile manufacturing services. While four bidders are better than one or two, it's not an exceptionally high number for a contract of this value. This level of competition generally provides a good basis for price discovery and ensures that the government is likely receiving a competitive offer, though the quality and competitiveness of each bid would need further analysis.

What is the historical spending pattern for automobile manufacturing services by the Department of Defense?

Historical spending patterns for automobile manufacturing services by the Department of Defense (DoD) are varied and depend heavily on specific military needs. The DoD procures a wide range of vehicles, from tactical trucks and armored personnel carriers to specialized support vehicles. Spending can fluctuate significantly based on modernization programs, operational tempo, and geopolitical requirements. Contracts like this one, for specific manufacturing support, are part of a larger ecosystem of defense procurement that includes vehicle acquisition, maintenance, and modification. Analyzing historical data would reveal trends in specific vehicle types, contract durations, and the involvement of various defense contractors within the automotive manufacturing domain.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Manufacturing › Automobile Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912CM06R0005

Offers Received: 4

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Holding Corporation (UEI: 968071493)

Address: 12000 HORIZON WAY, MOUNT LAUREL, NJ, 03

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $23,295,216

Exercised Options: $23,295,216

Current Obligation: $23,295,216

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912CM06D0021

IDV Type: IDC

Timeline