DoD's $40.9M Hawthorne Army Depot storage contract awarded to SOC Nevada LLC shows fair value

Contract Overview

Contract Amount: $40,887,499 ($40.9M)

Contractor: SOC Nevada LLC

Awarding Agency: Department of Defense

Start Date: 2018-05-23

End Date: 2019-12-31

Contract Duration: 587 days

Daily Burn Rate: $69.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SMCA STORAGE FOR CALENDAR YEAR 2018 AT HAWTHORNE ARMY DEPOT.

Place of Performance

Location: HAWTHORNE, MINERAL County, NEVADA, 89415

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $40.9 million to SOC NEVADA LLC for work described as: SMCA STORAGE FOR CALENDAR YEAR 2018 AT HAWTHORNE ARMY DEPOT. Key points: 1. Contract value appears reasonable given the duration and scope of facilities support services. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. No specific risk indicators were immediately apparent in the contract details provided. 4. Performance context is limited to storage services at a specific depot. 5. This contract falls within the Facilities Support Services sector.

Value Assessment

Rating: good

The contract value of approximately $40.9 million over 20 months for storage services at Hawthorne Army Depot appears to be within a reasonable range for government contracts of this nature. Benchmarking against similar facilities support contracts would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. However, without detailed cost breakdowns or comparisons to commercial market rates for equivalent storage solutions, a definitive assessment of exceptional value is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This method typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and terms. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition was intended and likely achieved, which is a positive sign for price discovery.

Taxpayer Impact: A competitive bidding process like full and open competition generally benefits taxpayers by driving down prices and ensuring the government receives services at a fair market value. This approach minimizes the risk of overpayment compared to sole-source or limited competition awards.

Public Impact

The Department of Defense benefits from secure and efficient storage solutions for its assets at Hawthorne Army Depot. Facilities support services, specifically calendar year storage, are delivered. The geographic impact is localized to Hawthorne Army Depot in Nevada. Workforce implications are likely related to the operational staff required for managing the storage facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition, indicating a competitive process.
Firm fixed price contract type, shifting cost risk to the contractor.
Contract duration of over 1.5 years provides a stable service period.

Sector Analysis

This contract falls within the Facilities Support Services sector, which encompasses a broad range of services necessary for the operation and maintenance of government facilities. This sector is critical for ensuring that military installations and other government sites are functional and secure. Spending in this area is consistent with the government's need to maintain its infrastructure and operational readiness. Comparable spending benchmarks would involve analyzing other contracts for depot operations, warehousing, and general facility maintenance across various government agencies.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, SOC Nevada LLC, may engage small businesses as subcontractors. Further analysis would be needed to determine the extent of subcontracting to small businesses and its overall impact on the small business ecosystem.

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. Accountability measures are inherent in the firm-fixed-price contract structure, requiring the contractor to deliver specified services. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Facilities Maintenance
Army Logistics and Supply Chain Management
Government Warehousing and Storage Contracts
Base Operations Support Services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.9 million to SOC NEVADA LLC. SMCA STORAGE FOR CALENDAR YEAR 2018 AT HAWTHORNE ARMY DEPOT.

Who is the contractor on this award?

The obligated recipient is SOC NEVADA 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 $40.9 million.

What is the period of performance?

Start: 2018-05-23. End: 2019-12-31.

What is the track record of SOC Nevada LLC in performing similar government contracts?

Information regarding SOC Nevada LLC's specific track record with similar government contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous awards. Agencies typically maintain Contractor Performance Assessment Reporting System (CPARS) reports that offer insights into a contractor's reliability, quality of work, and adherence to schedule and cost. Without access to these specific performance metrics, it is difficult to definitively assess their capabilities and past performance on comparable contracts.

How does the per-unit cost of storage under this contract compare to market rates or similar government contracts?

The provided data does not include specific per-unit cost metrics (e.g., cost per square foot per month, cost per cubic foot per month) or detailed breakdowns that would allow for a direct comparison to market rates or similar government contracts. The total contract value of approximately $40.9 million over 587 days (approximately 20 months) for storage at Hawthorne Army Depot offers a high-level figure. To perform a meaningful per-unit cost analysis, one would need to know the total storage volume or area provided, the duration of storage, and the types of goods stored. Benchmarking against other federal contracts for similar storage services or against commercial warehousing rates in the Nevada region would be necessary for a robust comparison.

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

The primary risks associated with this contract are likely related to the operational execution of storage services, potential for damage to stored goods, and adherence to security protocols. Given the firm-fixed-price nature of the contract, the risk of cost overruns is primarily borne by the contractor, SOC Nevada LLC. Mitigation strategies would typically include clear performance standards outlined in the contract, regular inspections and audits by the government, and the contractor's own internal quality control and risk management processes. The duration of the contract (587 days) is moderate, which can help mitigate risks associated with long-term commitments. However, specific risk mitigation plans are not detailed in the provided summary data.

How effective has SOC Nevada LLC been in fulfilling its contractual obligations for this specific contract?

The provided data summarizes the contract award details but does not include information on the contractor's performance or effectiveness in fulfilling its obligations for this specific contract. Effectiveness would typically be measured by metrics such as on-time delivery of services, quality of storage conditions, inventory accuracy, security compliance, and responsiveness to government needs. To assess effectiveness, one would need to consult performance reports (e.g., CPARS), conduct site visits, and review any formal feedback or complaints lodged by the government during the contract period. Without this performance data, an assessment of effectiveness cannot be made.

What is the historical spending trend for similar storage services at Hawthorne Army Depot or within the Department of the Army?

The provided data focuses on a single contract award for calendar year 2018 storage. It does not offer historical spending trends for similar services at Hawthorne Army Depot or within the broader Department of the Army. To analyze historical spending, one would need to access contract databases (like FPDS) and query for all contracts related to 'storage services,' 'facilities support,' or 'depot operations' awarded to Hawthorne Army Depot or by the Department of the Army over several fiscal years. This would allow for the identification of spending patterns, fluctuations in contract values, and the number and types of contracts awarded over time.

What is the potential impact of this contract on the local economy in Nevada?

This contract, valued at approximately $40.9 million, is likely to have a positive impact on the local economy in Nevada, particularly around the Hawthorne Army Depot. The primary impact would stem from job creation, both directly by SOC Nevada LLC for the operation of the storage facilities and indirectly through local suppliers and service providers engaged by the contractor. Additionally, the presence of a significant government contract can stimulate local businesses through the spending of employees and the procurement of goods and services. The duration of the contract (587 days) suggests a sustained period of economic activity.

Industry Classification

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

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: DAY & Zimmermann Group Inc., the

Address: 2 S MAINE AVE, HAWTHORNE, NV, 89415

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,887,499

Exercised Options: $40,887,499

Current Obligation: $40,887,499

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J11D0002

IDV Type: IDC

Timeline