DoD's $14.4M Facilities O&M Contract Awarded to SRM GROUP, LLC Shows Mixed Value

Contract Overview

Contract Amount: $14,394,555 ($14.4M)

Contractor: SRM Group, LLC

Awarding Agency: Department of Defense

Start Date: 2009-09-30

End Date: 2013-09-29

Contract Duration: 1,460 days

Daily Burn Rate: $9.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FACILITY O&M CONTINUOUS COMMISSIONING

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35802

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to SRM GROUP, LLC for work described as: FACILITY O&M CONTINUOUS COMMISSIONING Key points: 1. Contract value appears reasonable given the duration and scope of facilities operations and maintenance. 2. Competition was limited, raising questions about potential price overruns and optimal value. 3. Performance risk is moderate, with a firm-fixed-price structure mitigating some contractor-side issues. 4. This contract supports essential base operations, contributing to the readiness of military personnel. 5. The sector is dominated by large service providers, with opportunities for specialized firms. 6. Small business participation was not a stated requirement, potentially limiting ecosystem benefits.

Value Assessment

Rating: fair

The contract's total value of $14.4 million over approximately four years suggests an average annual spend of $3.6 million. Benchmarking against similar Facilities O&M contracts is challenging without more specific service details. However, the firm-fixed-price structure generally indicates a predictable cost for the government, assuming the scope was well-defined. The award to SRM GROUP, LLC, requires further analysis to determine if the pricing was competitive relative to market rates for comparable services in Alabama.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. The presence of only two bidders suggests a limited competitive landscape for this specific requirement. This level of competition may not have driven the most aggressive pricing and could indicate barriers to entry for other potential contractors or a niche service offering.

Taxpayer Impact: Limited competition can lead to higher prices for taxpayers as the government may have fewer options to choose from, potentially resulting in a less favorable price negotiation.

Public Impact

This contract directly benefits the Department of Defense by ensuring the operational readiness of facilities. Services include continuous commissioning and maintenance, crucial for efficient base operations. The geographic impact is concentrated in Alabama, supporting local infrastructure and potentially local employment. Workforce implications include the need for skilled technicians and facility managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than a more robust bidding process.
The exclusion of sources, even if justified, reduces the pool of potential providers and innovation.
Lack of small business set-aside could limit opportunities for smaller, specialized firms in the region.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
The contract duration of four years allows for stable service provision and planning.
Award to a specific contractor suggests they met the technical and performance requirements.

Sector Analysis

The Facilities Support Services sector (NAICS 561210) is a significant part of the government contracting landscape, encompassing a wide range of services from maintenance to operations. This contract falls within the broader category of facility management, which is essential for government agencies to maintain their physical infrastructure. The market is competitive, with both large, diversified companies and smaller, specialized firms vying for contracts. Spending in this sector is often driven by base operations and infrastructure upkeep requirements across various federal agencies.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any subcontracting requirements for small businesses. The award to SRM GROUP, LLC, a single entity, suggests that opportunities for small businesses to participate in this specific contract were likely limited unless they were direct subcontractors to the prime. This could mean a missed opportunity to foster small business growth within the federal contracting ecosystem for facility support services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of the Army. Performance standards and delivery schedules outlined in the contract would be monitored to ensure compliance. The firm-fixed-price nature of the contract provides a degree of accountability, as the contractor is responsible for delivering the specified services within the agreed-upon budget. Transparency is generally maintained through contract award databases, though detailed performance reports may not always be publicly accessible.

Related Government Programs

Base Operations Support Services
Facilities Maintenance Contracts
Government Property Management
Energy Management Services

Risk Flags

Limited competition may impact price competitiveness.
Justification for exclusion of sources needs thorough review.
Performance monitoring is critical given the scope of services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to SRM GROUP, LLC. FACILITY O&M CONTINUOUS COMMISSIONING

Who is the contractor on this award?

The obligated recipient is SRM GROUP, 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 $14.4 million.

What is the period of performance?

Start: 2009-09-30. End: 2013-09-29.

What is the track record of SRM GROUP, LLC with federal contracts, particularly in Facilities O&M?

SRM GROUP, LLC has been awarded federal contracts, including this one from the Department of the Army for Facilities O&M. Further analysis of their contract history would reveal the number and value of awards, their performance ratings on past contracts, and any history of contract modifications, disputes, or terminations. Understanding their past performance is crucial for assessing their reliability and capability to execute current and future contracts effectively. A review of contract databases like FPDS or SAM.gov would provide more granular data on their federal contracting activities and performance.

How does the awarded price compare to market rates for similar Facilities O&M services in Alabama?

Determining the precise market rate comparison for this $14.4 million contract is complex without detailed service specifications and local market data. However, the firm-fixed-price structure suggests the government aimed for cost certainty. Given the limited competition (two bidders), the price might be higher than if there were more robust competition. To benchmark effectively, one would need to analyze the scope of work (e.g., square footage maintained, types of systems commissioned) and compare it to prevailing rates for similar services in the specific geographic region of Alabama. Industry reports or cost estimation tools for facility management could provide a broader market perspective.

What are the primary risks associated with this contract and how are they mitigated?

The primary risks associated with this Facilities O&M contract include potential cost overruns if the scope of work was underestimated, contractor performance issues leading to service disruptions, and the risk of receiving suboptimal value due to limited competition. The firm-fixed-price (FFP) contract type mitigates cost overrun risk for the government, as the contractor bears the responsibility for cost increases. Mitigation for performance issues would rely on contract oversight, performance metrics, and potential penalties. The risk of suboptimal value due to limited competition is harder to mitigate post-award but could be addressed in future solicitations by broadening outreach or adjusting requirements to encourage more bidders.

What is the historical spending pattern for Facilities O&M by the Department of the Army in Alabama?

Analyzing historical spending patterns for Facilities O&M by the Department of the Army in Alabama would provide context for this $14.4 million award. This would involve examining contract databases to identify the total amount spent annually on similar services in that region over several fiscal years. Understanding trends, such as whether spending has increased or decreased, the number of contracts awarded, and the primary contractors involved, can reveal market dynamics and potential budget priorities. Such analysis could highlight if this contract represents a typical investment or a significant deviation from past spending.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply for the procurement process?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that the agency intended to conduct a broad competition but had specific reasons to exclude certain potential offerors. This exclusion must be justified and documented, often due to factors like national security, proprietary information, or specific technical requirements that only a limited number of sources can meet. While it aims for open competition, the exclusion inherently limits the pool of bidders. This process requires careful justification to ensure it doesn't unduly restrict competition and lead to less favorable pricing or innovation for the government.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: DACA8703R0009

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6910 RICHMOND HIGHWAY, SUITE 500, ALEXANDRIA, VA, 08

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $14,394,555

Exercised Options: $14,394,555

Current Obligation: $14,394,555

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY04D0022

IDV Type: IDC

Timeline