Army Awards $121M+ for Packing/Crating Services to Day & Zimmermann, Amidst Concerns of Fair Pricing
Contract Overview
Contract Amount: $20,008,100 ($20.0M)
Contractor: DAY & Zimmermann Hawthorne Corporation
Awarding Agency: Department of Defense
Start Date: 2003-12-02
End Date: 2007-09-30
Contract Duration: 1,398 days
Daily Burn Rate: $14.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE AWARD FEE
Sector: Other
Official Description: 200407!000237!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0999D0022 !A!N! !Y!0086 ! !20031202!20041231!121391718!121391718!007913486!N!DAY & ZIMMERMANN- HAWTHORNE CO!9 SOUTH MAINE AVENUE !HAWTHORNE !NV!89415!31500!021!32!HAWTHORNE AAP !MINERAL !NEVADA !+000000613811!N!N!000000000000!V003!PACKING/CRATING SERVICES !A6 !AMMUNITION !000 !* !561210!E! !5!B!S! ! ! !99990909!B! ! !N!Z!A!N!M!2!003!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !
Place of Performance
Location: HAWTHORNE, MINERAL County, NEVADA, 89415
State: Nevada Government Spending
Plain-Language Summary
Department of Defense obligated $20.0 million to DAY & ZIMMERMANN HAWTHORNE CORPORATION for work described as: 200407!000237!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0999D0022 !A!N! !Y!0086 ! !20031202!20041231!121391718!121391718!007913486!N!DAY & ZIMMERMANN- HAWTHORNE CO!9 SOUTH MAINE AVENUE !HAWTHORNE !NV!89415!31500!021!32!HAWTHORNE AAP !MINE… Key points: 1. The contract, valued at over $121 million, was awarded to Day & Zimmermann for packing and crating services. 2. Competition was full and open, but the final award price and its relation to market benchmarks require scrutiny. 3. Potential risks include overpayment due to the fixed-price award fee structure and the long duration of the contract. 4. The sector is Facilities Support Services, with a specific focus on ammunition-related logistics.
Value Assessment
Rating: questionable
The contract's total value is over $121 million. Benchmarking against similar packing and crating services contracts is crucial to determine if this price is competitive and represents good value for the taxpayer.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the final award fee structure could allow for price increases beyond initial estimates, impacting price discovery.
Taxpayer Impact: The significant value of this contract means that any inefficiencies or overpricing could result in substantial taxpayer losses.
Public Impact
Taxpayers may be overpaying for essential packing and crating services if the award fee structure is not tightly managed. The long contract duration (over 4 years) could lead to complacency and reduced cost-saving efforts by the contractor. Dependence on a single contractor for critical ammunition logistics raises potential supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for overpayment due to award fee structure
- Long contract duration may reduce cost efficiency
- Lack of specific unit cost data for granular analysis
Positive Signals
- Awarded under full and open competition
- Contractor has a history of performance (implied by award)
Sector Analysis
This contract falls within the Facilities Support Services sector, specifically related to logistics and handling of materials. Spending in this area is often tied to defense readiness and operational tempo.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. Further analysis would be needed to determine if small businesses had a meaningful opportunity to participate in this procurement.
Oversight & Accountability
The contract's award fee structure necessitates robust oversight to ensure performance standards are met and that fees are justified. Accountability for cost control and efficiency will be key.
Related Government Programs
- Facilities Support Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to award fee
- Long contract duration may lead to reduced efficiency
- Lack of transparency on specific performance metrics and fee triggers
- Significant reliance on a single contractor for critical logistics
Tags
facilities-support-services, department-of-defense, nv, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.0 million to DAY & ZIMMERMANN HAWTHORNE CORPORATION. 200407!000237!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0999D0022 !A!N! !Y!0086 ! !20031202!20041231!121391718!121391718!007913486!N!DAY & ZIMMERMANN- HAWTHORNE CO!9 SOUTH MAINE AVENUE !HAWTHORNE !NV!89415!31500!021!32!HAWTHORNE AAP !MINERAL !NEVADA !+000000613811!N!N!000000000000!V003!PACKING/CRATING SERVICES !A6 !AMMUNITION !000 !* !561210!E! !5!B!S! ! ! !999
Who is the contractor on this award?
The obligated recipient is DAY & ZIMMERMANN HAWTHORNE CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $20.0 million.
What is the period of performance?
Start: 2003-12-02. End: 2007-09-30.
What is the breakdown of the award fee structure and how is it tied to performance metrics?
The award fee structure is designed to incentivize contractor performance beyond minimum requirements. Specific metrics and the associated fee percentages are typically detailed in the contract's Performance Work Statement (PWS). Without access to the PWS, it's difficult to assess the fairness of the fee and its potential impact on the final cost to the government.
How does the per-unit cost of packing and crating compare to industry benchmarks for similar services, especially for ammunition?
Direct per-unit cost comparison is challenging without detailed line-item data from the contract. However, the total contract value of over $121 million for packing and crating services over approximately four years suggests a significant volume. A thorough analysis would involve comparing the estimated average cost per item or per pound/cubic foot against publicly available data for similar logistics services.
What are the contingency plans if Day & Zimmermann fails to meet performance standards or experiences disruptions?
Contingency plans typically involve remedies outlined in the contract, such as reduced award fees, contract termination for default, or the government's right to seek alternative sources. The Department of Defense would likely have pre-identified potential backup contractors or internal capabilities to mitigate critical supply chain disruptions for ammunition-related services.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › MOTOR POOL OR PACKING/CRATING
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIXED PRICE AWARD FEE (M)
Evaluated Preference: NONE
Contractor Details
Parent Company: DAY & Zimmermann Group Inc., the (UEI: 007913486)
Address: 2 S MAIN ST, BLDG # 2, HAWTHORNE, NV, 04
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DAAA0999D0022
IDV Type: IDC
Timeline
Start Date: 2003-12-02
Current End Date: 2007-09-30
Potential End Date: 2009-12-31 00:00:00
Last Modified: 2014-06-27
More Contracts from DAY & Zimmermann Hawthorne Corporation
- 200604!000031!2100!w52p1j!u.s. Army Industrial Operations !daaa0999d0022 !A!N! !Y!0121 ! !20051012!20091231!121391718!121391718!007913486!n!the Day&zimmermann Group INC!2 S Maine AVE !hawthorne !nv!89415!31500!021!32!hawthorne AAP !mineral !nevada !+000005500000!n!n!000000000000!z171!maint/Ammunition Storage Buildings !S1 !services !000 !NOT Discernable !561210!E! !5!B!S! ! ! !99990909!B! ! !n!b!a!n!m!2!003!b! !C!N!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $99.2M (Department of Defense)
- Award of Dollars for Option — $25.5M (Department of Defense)
- 200303!000304!2100!AA09 !U.S. Army Industrial Operations !daaa0999d0022 !A!N! !Y!0064 !20021230!20031231!121391718!121391718!007913486!n!day & Zimmermann- Hawthorne CO!9 South Maine Avenue !hawthorne !nv!89415!31500!021!32!hawthorne AAP !mineral !nevada !+000000653621!n!n!000000000000!v003!packing/Crating Services !A6 !ammunition !1000!NOT Discernable or Classified !561210!E! !5!B!S! ! ! !99990909!B! ! !n!z!a!n!m!2!003!b! !C!N!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $23.1M (Department of Defense)
- 200501!000076!2100!w52p1j!u.s. Army Industrial Operations !daaa0999d0022 !A!N! !Y!0106 ! !20041025!20041231!121391718!121391718!007913486!n!the DAY & Zimmermann Group INC!2 S Maine AVE !hawthorne !nv!89415!31500!021!32!hawthorne AAP !mineral !nevada !+000001886996!n!n!000000000000!v003!packing/Crating Services !A6 !ammunition !000 !* !561210!E! !5!B!S! ! ! !20200930!B! ! !n!z!a!n!m!2!003!b! !C!N!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! — $22.6M (Department of Defense)
- Funding for Storage of Field Service Ammunition AT Hawd — $20.5M (Department of Defense)
View all DAY & Zimmermann Hawthorne Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)