HHS awarded $14.8M for logistics support, with contract duration exceeding 6 years

Contract Overview

Contract Amount: $14,855,333 ($14.9M)

Contractor: Masimax Resources, Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2000-09-01

End Date: 2007-04-30

Contract Duration: 2,432 days

Daily Burn Rate: $6.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: LOGISTICS SUPPORT SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $14.9 million to MASIMAX RESOURCES, INC for work described as: LOGISTICS SUPPORT SERVICES Key points: 1. Value for money appears fair given the extended contract duration and cost-plus award fee structure. 2. Competition dynamics were limited, indicating potential for less aggressive pricing. 3. Risk indicators include the cost-plus award fee structure, which can incentivize cost growth. 4. Performance context shows a long-term engagement for essential logistics services. 5. Sector positioning places this contract within administrative and management consulting services.

Value Assessment

Rating: fair

The contract's total value of $14.8 million over approximately 2432 days (about 6.6 years) suggests an average annual spend of roughly $2.2 million. Without specific performance metrics or comparable contract data, a precise value-for-money assessment is challenging. However, the Cost Plus Award Fee (CPAF) structure implies that contractor performance influences the final fee, offering some incentive for efficiency. The lack of detailed pricing breakdowns makes direct comparison difficult, but the extended duration suggests a need for stable, long-term support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that pricing and service terms were negotiated directly with Masimax Resources, Inc., potentially leading to higher costs than if multiple bids had been solicited.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government did not benefit from the price discovery mechanisms inherent in a competitive procurement process.

Public Impact

The National Institutes of Health (NIH) benefits from continuous logistics support services. Essential services include administrative management and general management consulting related to logistics. The geographic impact is centered in Maryland, where the contract is managed. Workforce implications are tied to the personnel required by Masimax Resources, Inc. to fulfill the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus award fee structure can lead to cost overruns if not managed tightly.
Extended contract duration without clear performance benchmarks could mask inefficiencies.

Positive Signals

Long-term contract indicates a stable and potentially effective relationship for ongoing needs.
Award fee component incentivizes performance, suggesting a focus on meeting objectives.
Contract awarded to a single entity may streamline management and communication.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, specifically supporting logistics functions. This sector is broad, encompassing a wide range of advisory and operational support services. The market size for such services is substantial, driven by government and commercial entities seeking to optimize their supply chains and operational efficiency. Comparable spending benchmarks are difficult to establish without more specific service details, but government spending on management and professional services is consistently high.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary contractor, Masimax Resources, Inc., is responsible for fulfilling the contract requirements, and the direct impact on the small business ecosystem through subcontracting opportunities is likely minimal.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program officials within the National Institutes of Health. The Cost Plus Award Fee structure necessitates close monitoring of performance against established criteria to determine the award fee. Transparency is limited by the sole-source nature of the award and the proprietary details of the CPAF structure. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Logistics Management Services
Administrative Support Contracts
Management and Consulting Services
Federal Supply Schedule Contracts

Risk Flags

Sole-source award limits competitive pricing.
Cost-plus contract type requires diligent oversight to manage costs.
Extended contract duration may obscure performance issues if not actively managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $14.9 million to MASIMAX RESOURCES, INC. LOGISTICS SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is MASIMAX RESOURCES, INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $14.9 million.

What is the period of performance?

Start: 2000-09-01. End: 2007-04-30.

What specific logistics support services were provided under this contract?

The contract data indicates the primary service category as 'Administrative Management and General Management Consulting Services' (NAICS 541611), with a description of 'LOGISTICS SUPPORT SERVICES'. While the specific tasks are not detailed in the provided data, this generally encompasses a range of activities such as supply chain management, inventory control, warehousing, transportation coordination, and potentially strategic planning for logistical operations. The 'Cost Plus Award Fee' (CPAF) payment structure suggests that the contractor was incentivized to meet defined performance objectives related to these services, with a base cost plus a fee determined by performance outcomes.

How does the $14.8 million total award compare to similar logistics support contracts at NIH?

Comparing the $14.8 million total award for Masimax Resources, Inc. requires context on the contract's duration and scope. This contract spanned approximately 2432 days (over 6.6 years), averaging around $2.2 million annually. Without access to a comprehensive database of NIH logistics contracts, a direct comparison is difficult. However, for long-term, comprehensive logistics support, this annual average appears moderate. Contracts with shorter durations or more specialized services could have significantly different total values. The sole-source nature also means this figure wasn't optimized through competition, which is a key factor in value assessment.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for logistics support?

The primary risks with a CPAF contract for logistics support revolve around cost control and potential for contractor inefficiency. While the 'award fee' component is designed to incentivize performance, the 'cost plus' aspect means the government reimburses the contractor's allowable costs, plus a fee. If cost-containment measures are weak or performance metrics are poorly defined, contractors may have less incentive to minimize expenses, potentially leading to cost overruns. For logistics, this could manifest as higher-than-necessary transportation costs, inefficient inventory management, or inflated labor rates. Robust oversight and clearly defined performance standards are crucial to mitigate these risks.

Given the sole-source award, what assurance does the government have regarding fair pricing for these logistics services?

The government's assurance of fair pricing in a sole-source award relies heavily on pre-negotiation analysis, market research, and negotiation skills. Agencies are required to conduct thorough market research to determine if competitive sources exist and justify the sole-source decision. During negotiation, the government would typically request detailed cost breakdowns from the contractor and compare these to independent cost estimates or historical data for similar services. The 'award fee' mechanism also provides some leverage, as the fee is tied to performance, indirectly influencing the contractor's focus on efficiency. However, the inherent lack of competition means the government lacks the direct price pressure that multiple bids would provide.

What is the historical spending pattern for logistics support services at the National Institutes of Health?

The provided data only details one specific contract ($14.8M from 2000-2007). To understand historical spending patterns for logistics support at NIH, a broader analysis of multiple contracts over a longer period would be necessary. This would involve examining spending trends across different contract types (e.g., competitive vs. sole-source, fixed-price vs. cost-reimbursement), identifying major contractors, and tracking annual expenditures. Without this broader dataset, it's impossible to determine if this $14.8M contract represents a typical, high, or low level of investment for NIH's logistics needs during that era.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Research Triangle Institute (UEI: 004868105)

Address: 1375 PICCARD DR STE 175, ROCKVILLE, MD, 08

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Woman Owned Business

Financial Breakdown

Contract Ceiling: $14,917,421

Exercised Options: $14,917,421

Current Obligation: $14,855,333

Timeline