Day & Zimmermann's $225.7M contract for packing and crating services awarded by the Army
Contract Overview
Contract Amount: $22,571,147 ($22.6M)
Contractor: DAY & Zimmermann Hawthorne Corporation
Awarding Agency: Department of Defense
Start Date: 2004-10-25
End Date: 2016-03-04
Contract Duration: 4,148 days
Daily Burn Rate: $5.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE AWARD FEE
Sector: Other
Official Description: 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! !
Place of Performance
Location: HAWTHORNE, MINERAL County, NEVADA, 89415
State: Nevada Government Spending
Plain-Language Summary
Department of Defense obligated $22.6 million to DAY & ZIMMERMANN HAWTHORNE CORPORATION for work described as: 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 !MINE… Key points: 1. The contract value of $225.7 million represents a significant investment in logistics support. 2. Competition dynamics for this contract are not fully detailed, but it was awarded under full and open competition. 3. The duration of the contract, spanning over 12 years, suggests a long-term need for these services. 4. The fixed-price award fee structure indicates a performance-based incentive for the contractor. 5. The services provided are critical for the supply chain and operational readiness of the U.S. Army. 6. The contract falls under Facilities Support Services, a broad category essential for government operations.
Value Assessment
Rating: good
The total contract value of $225.7 million over its extended period of performance suggests a substantial but potentially reasonable cost for comprehensive packing and crating services. Benchmarking against similar large-scale logistics contracts is difficult without more granular data on service scope and volume. However, the fixed-price award fee structure implies that the government sought to control costs while incentivizing performance, which is a positive sign for value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it resulted in a single award suggests that Day & Zimmermann was selected as the most advantageous offer. The level of competition, while initially broad, ultimately led to a specific contractor being chosen, which is typical for large, complex service contracts.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and service quality. It ensures that the government is not limited to a single provider, increasing the likelihood of obtaining value for money.
Public Impact
The U.S. Army benefits from reliable and efficient packing and crating services, ensuring the safe transport of materials and equipment. This contract supports the logistical backbone of military operations, contributing to national defense readiness. The services are primarily delivered in Hawthorne, Nevada, impacting the local economy and workforce. The contract likely supports jobs within the logistics and warehousing sectors, particularly in Nevada.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to potential cost overruns if not managed effectively.
- Reliance on a single contractor for such a critical service could pose risks if performance degrades.
- The fixed-price award fee structure requires careful monitoring to ensure the award fee is justified by performance.
Positive Signals
- Awarded under full and open competition, suggesting a competitive bidding process.
- The fixed-price award fee structure incentivizes contractor performance.
- The contractor has a long-standing relationship with the government, indicated by the contract's duration.
Sector Analysis
This contract falls within the Facilities Support Services sector, which encompasses a wide range of services necessary for the operation and maintenance of government facilities. The market for these services is substantial, driven by the ongoing needs of federal agencies for logistics, maintenance, and operational support. Comparable spending benchmarks are difficult to establish without knowing the precise scope of 'packing and crating' for military assets, but it is a critical component of the defense industrial base.
Small Business Impact
There is no indication that this contract was specifically set aside for small businesses. Given the large contract value and specialized nature of packing and crating for military assets, it is unlikely that small businesses would be the primary awardees without specific subcontracting requirements. The prime contractor, Day & Zimmermann, is a large entity, and their subcontracting practices would determine the extent of small business involvement.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Performance reviews, audits, and regular reporting are standard mechanisms to ensure accountability and transparency. The Inspector General's office may also conduct investigations if any performance or financial irregularities are suspected.
Related Government Programs
- Defense Logistics Agency (DLA) contracts
- Military Sealift Command contracts
- General Services Administration (GSA) Federal Supply Schedule contracts for logistics services
Risk Flags
- Long contract duration may increase risk of cost escalation or performance drift.
- Sole reliance on one contractor for critical logistics support could pose a risk.
- Need for detailed performance monitoring due to fixed-price award fee structure.
Tags
defense, department-of-defense, department-of-the-army, logistics, packing-and-crating, facilities-support-services, full-and-open-competition, fixed-price-award-fee, nevada, large-contract, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.6 million to DAY & ZIMMERMANN HAWTHORNE CORPORATION. 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! ! ! !202
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 $22.6 million.
What is the period of performance?
Start: 2004-10-25. End: 2016-03-04.
What is the historical spending pattern for packing and crating services by the Department of the Army?
Historical spending on packing and crating services by the Department of the Army is substantial, reflecting the continuous need to move equipment and supplies domestically and internationally. While specific figures for 'packing and crating' alone are difficult to isolate without detailed contract data, the Army consistently allocates significant portions of its budget to logistics and supply chain management. This includes services for everything from individual soldier gear to major weapon systems. The $225.7 million awarded to Day & Zimmermann represents a significant portion of this category over its contract life, suggesting either a high volume of services or a particularly complex set of requirements. Analyzing trends in contract awards for similar services over the past decade would reveal fluctuations based on operational tempo, force structure changes, and strategic priorities.
How does the cost per unit for packing and crating services compare to industry benchmarks?
Determining a precise 'cost per unit' for packing and crating services under this contract is challenging due to the varied nature of the items being packed and the complexity of the services. The contract covers a broad range of activities, from standard crating to specialized packing for sensitive or high-value military equipment. Without specific unit definitions (e.g., cost per cubic foot, cost per pallet, cost per item type), a direct comparison to industry benchmarks is not feasible. However, the contract's fixed-price award fee structure suggests an attempt to establish a baseline cost while incentivizing efficiency. The overall value of $225.7 million over its extended duration indicates a significant investment, and the government would have likely conducted some level of cost analysis during the procurement to ensure the pricing was fair and reasonable relative to the anticipated scope of work and market rates for similar, albeit less specialized, commercial services.
What is the track record of The Day & Zimmermann Group Inc. in performing similar government contracts?
The Day & Zimmermann Group Inc. has a long and extensive track record of performing complex industrial and defense-related contracts for the U.S. government, including the Department of Defense. Their experience spans various areas such as munitions manufacturing, logistics, maintenance, and technical services. For packing and crating services specifically, their long-standing relationship with the Army, as evidenced by this contract's duration, suggests a history of satisfactory performance. Government contract databases often show a pattern of awards and task orders issued to established contractors like Day & Zimmermann, reflecting their capacity and perceived reliability. While specific performance metrics are not publicly detailed here, the repeated awarding of significant contracts implies a level of trust and competence in meeting government requirements.
What are the potential risks associated with this contract, and how are they mitigated?
Potential risks associated with this large, long-duration contract include performance degradation over time, cost overruns if not managed tightly, and contractor dependency. The extended period of performance (over 12 years) increases the possibility of unforeseen challenges or changes in operational requirements. Mitigation strategies likely include robust oversight by the contracting officer's representative (COR), regular performance reviews, and clear performance standards outlined in the contract. The fixed-price award fee structure itself acts as a mitigation tool by incentivizing the contractor to meet or exceed performance targets to earn the full award fee, thereby aligning contractor and government interests. Furthermore, the initial full and open competition aimed to select a capable contractor, reducing the risk of selecting an underqualified vendor.
How does this contract contribute to the overall mission effectiveness of the U.S. Army?
This contract is crucial for the U.S. Army's mission effectiveness by ensuring the efficient and secure movement of materiel. Reliable packing and crating services are fundamental to the supply chain, enabling the timely delivery of equipment, parts, and supplies to operational units, both domestically and in forward-deployed locations. Without these services, the Army's ability to maintain readiness, deploy forces, and sustain operations would be severely hampered. The contract supports the logistical infrastructure that underpins all military activities, from routine training exercises to major combat operations. By outsourcing these specialized services to a capable contractor like Day & Zimmermann, the Army can focus its internal resources on core warfighting functions.
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, 89415
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: DAAA0999D0022
IDV Type: IDC
Timeline
Start Date: 2004-10-25
Current End Date: 2016-03-04
Potential End Date: 2016-03-04 00:00:00
Last Modified: 2016-03-16
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)
- Funding for Storage of Field Service Ammunition AT Hawd — $20.5M (Department of Defense)
- 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! ! — $20.0M (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)