DoD's $376M contract for vehicle shipping awarded to American Auto Logistics, LP, with 3 bidders

Contract Overview

Contract Amount: $376,182,230 ($376.2M)

Contractor: American Auto Logistics, LP

Awarding Agency: Department of Defense

Start Date: 2012-11-01

End Date: 2014-07-29

Contract Duration: 635 days

Daily Burn Rate: $592.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: SHIPPING AND STORAGE OF MILITARY SERVICE MEMBERS' PRIVATELY OWNED VEHICLES (POVS).

Plain-Language Summary

Department of Defense obligated $376.2 million to AMERICAN AUTO LOGISTICS, LP for work described as: SHIPPING AND STORAGE OF MILITARY SERVICE MEMBERS' PRIVATELY OWNED VEHICLES (POVS). Key points: 1. The contract's value of $376 million over its period of performance suggests a significant scale of operations. 2. Full and open competition was utilized, indicating a broad market solicitation for this service. 3. The presence of 3 bidders points to a moderately competitive landscape for military vehicle logistics. 4. The firm-fixed-price contract type shifts cost risk to the contractor, potentially stabilizing government expenditure. 5. The contract duration of 635 days (approximately 21 months) allows for sustained service delivery. 6. The North American Industry Classification System (NAICS) code 481112 relates to scheduled freight air transportation, which may be a component of the overall service.

Value Assessment

Rating: fair

Benchmarking the value-for-money for this specific contract is challenging without detailed service delivery metrics and comparison to commercial rates for similar volume and scope. The firm-fixed-price structure is generally favorable for cost control. However, the absence of specific performance data or detailed cost breakdowns makes a definitive value assessment difficult. Further analysis would require understanding the specific routes, types of vehicles, and service level agreements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. With three bidders participating, the competition level appears moderate. This suggests that while multiple companies were aware of and interested in the opportunity, the market may not be saturated with potential providers for this specialized service. The number of bidders influences price discovery, with more bidders generally leading to more competitive pricing.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs. Three bidders indicate a reasonable level of competition, likely resulting in a more favorable price than a sole-source award.

Public Impact

Military service members benefit from the reliable and efficient shipping of their privately owned vehicles (POVs). This service supports personnel mobility, particularly during permanent change of station (PCS) orders. The contract ensures that service members can relocate their personal transportation, reducing logistical burdens during transitions. Geographic impact is likely widespread, covering various military installations and deployment locations requiring POV transport. The contract supports jobs within the logistics and transportation sector, including those involved in vehicle handling, storage, and shipping.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs if air transportation is heavily utilized and fuel prices fluctuate significantly.
Dependence on a single contractor for a critical service could pose risks if performance issues arise.
Ensuring consistent service quality across all shipments and locations requires robust oversight.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a market capable of meeting the service requirements.
The existence of multiple bidders indicates a degree of industry capacity and interest.

Sector Analysis

The defense logistics and transportation sector is a critical component of military readiness, encompassing a wide range of services from freight movement to specialized equipment transport. This contract for shipping privately owned vehicles falls within the broader category of military support services. The market for such services is often characterized by a mix of large, established logistics providers and specialized niche players. Spending in this area is directly tied to military personnel deployment cycles and global operational requirements.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, American Auto Logistics, LP, is likely a larger entity. While there is no direct information on subcontracting plans, large prime contracts often involve opportunities for small businesses to participate as subcontractors, particularly in areas like local drayage, warehousing, or specialized handling. The absence of a small business set-aside means direct award opportunities for small businesses were limited in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Transportation Command (USTRANSCOM), the contracting agency. Mechanisms likely include performance monitoring, quality assurance surveillance plans (QASPs), and regular reporting requirements from the contractor. Accountability is enforced through contract clauses, potential penalties for non-performance, and the possibility of contract termination. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Military Personnel Relocation Services
Global Freight Forwarding
Defense Transportation Services
Vehicle Logistics Management
Permanent Change of Station (PCS) Support

Risk Flags

Potential for cost overruns if fuel prices escalate significantly, impacting air freight components.
Risk of service degradation if contractor prioritizes profit over quality due to fixed-price nature.
Dependence on contractor's logistical network for timely and safe vehicle delivery.
Ensuring compliance with all regulations and safety standards for vehicle transport.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $376.2 million to AMERICAN AUTO LOGISTICS, LP. SHIPPING AND STORAGE OF MILITARY SERVICE MEMBERS' PRIVATELY OWNED VEHICLES (POVS).

Who is the contractor on this award?

The obligated recipient is AMERICAN AUTO LOGISTICS, LP.

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $376.2 million.

What is the period of performance?

Start: 2012-11-01. End: 2014-07-29.

What is the historical spending trend for military vehicle shipping services by the Department of Defense?

Analyzing historical spending for military vehicle shipping requires examining contract awards over multiple fiscal years. While this specific contract represents a significant outlay of $376 million, understanding the broader trend involves looking at the total obligated amounts for similar services across different branches and commands within the DoD. Factors influencing spending include troop deployment levels, base realignments, and changes in military policy regarding POV transport. Without access to a comprehensive database of all related contracts, it's difficult to provide precise historical figures. However, it's reasonable to assume that spending in this area remains consistently high due to the ongoing need to support service member mobility.

How does the number of bidders (3) compare to typical competition levels for similar DoD logistics contracts?

A competition level with three bidders for a large-value DoD logistics contract like this one suggests a moderately competitive market. Many large-scale defense contracts, especially those requiring specialized capabilities or extensive infrastructure, may see fewer than five bidders due to high barriers to entry, such as bonding requirements, past performance history, and operational capacity. Conversely, more commoditized services might attract a dozen or more bidders. Therefore, three bidders indicate that the opportunity was sufficiently attractive and accessible to a reasonable number of qualified companies, likely leading to competitive pricing, but perhaps not the absolute lowest possible price that might be achieved with a larger pool of competitors.

What are the primary risks associated with a firm-fixed-price contract for vehicle shipping?

The primary risk associated with a firm-fixed-price (FFP) contract for vehicle shipping, from the government's perspective, is that the contractor may cut corners on service quality or safety to maximize profit if cost pressures arise. For the contractor, the risk lies in underestimating costs, particularly if unforeseen circumstances like significant fuel price increases, unexpected transit delays, or increased handling requirements occur. In this specific case, if air transportation (as suggested by the NAICS code) becomes a major component, fuel price volatility poses a significant risk to the contractor's profitability. Robust performance monitoring and quality assurance are crucial to mitigate these risks for the government.

What is the typical performance period for contracts of this nature and value?

Contracts for large-scale logistics services, particularly those supporting ongoing military operations and personnel movements, often have performance periods ranging from one to five years, sometimes with options for extension. A duration of 635 days (approximately 21 months) for a $376 million contract is within a common range, allowing for sustained service delivery without locking the government into excessively long commitments. Shorter periods might necessitate frequent re-competition, leading to administrative costs and potential service disruptions, while excessively long periods could reduce flexibility and potentially lead to less competitive pricing over time. This duration strikes a balance.

How does the NAICS code 481112 (Scheduled Freight Air Transportation) specifically relate to the shipping of privately owned vehicles?

The NAICS code 481112, 'Scheduled Freight Air Transportation,' suggests that air cargo is a significant component of the services provided under this contract. While privately owned vehicles (POVs) are typically shipped via surface methods (truck, rail, or sea), certain circumstances might necessitate air transport. This could include urgent deployments, transport to remote locations not easily accessible by other means, or for high-value/specialty vehicles where speed is paramount. It's also possible that the contract encompasses a broader logistics solution where air freight is used for other related military cargo, and POV shipping is bundled. The specific reliance on air transport would influence cost, transit time, and environmental impact.

Industry Classification

NAICS: Transportation and Warehousing › Scheduled Air Transportation › Scheduled Freight Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 85 CHESTNUT RIDGE RD, MONTVALE, NJ, 05

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $376,182,230

Exercised Options: $376,182,230

Current Obligation: $376,182,230

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAMT0103D0184

IDV Type: IDC

Timeline