DoD awards $23.5M for lumber pallets, raising questions on competition and value
Contract Overview
Contract Amount: $23,457,616 ($23.5M)
Contractor: Cutter Lumber Products
Awarding Agency: Department of Defense
Start Date: 2010-11-30
End Date: 2012-02-28
Contract Duration: 455 days
Daily Burn Rate: $51.6K/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: 4516276782!PALLET,MATERIAL HAN
Place of Performance
Location: LIVERMORE, ALAMEDA County, CALIFORNIA, 94551
Plain-Language Summary
Department of Defense obligated $23.5 million to CUTTER LUMBER PRODUCTS for work described as: 4516276782!PALLET,MATERIAL HAN Key points: 1. Spending on lumber pallets by the Defense Logistics Agency totals $23.5M. 2. Competition method was 'Full and Open Competition After Exclusion of Sources', suggesting limited initial reach. 3. The contract was awarded to Cutter Lumber Products, a single entity. 4. Sector context is 'All Other Miscellaneous General Purpose Machinery Manufacturing', which seems unusual for lumber. 5. Risk flags include potential lack of true competition and unclear value for money.
Value Assessment
Rating: questionable
The contract value of $23.5M for lumber pallets appears high without clear benchmarks. The 'All Other Miscellaneous General Purpose Machinery Manufacturing' NAICS code is a red flag, suggesting potential misclassification or a lack of direct comparison to similar material handling contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The competition was 'Full and Open Competition After Exclusion of Sources', indicating that while open, it followed a period where specific sources were excluded. This method can limit the pool of potential bidders and may not guarantee the most competitive pricing.
Taxpayer Impact: The significant award amount raises concerns about whether taxpayers received the best possible price due to the specific competition method employed.
Public Impact
Taxpayers may have overpaid for essential military supplies due to a potentially restricted bidding process. The unusual classification of lumber manufacturing under 'General Purpose Machinery' warrants further investigation into procurement accuracy. Lack of transparency in the exclusion of sources could hide inefficiencies or preferential treatment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Unusual NAICS code for product
- Limited competition method
- Single awardee
- Lack of small business participation
Positive Signals
- Contract awarded
- Supplies delivered
Sector Analysis
The procurement falls under 'All Other Miscellaneous General Purpose Machinery Manufacturing', a broad category. Lumber and pallet manufacturing typically belongs to wood product manufacturing sectors. Benchmarking against similar defense contracts for material handling equipment is difficult due to the NAICS code.
Small Business Impact
The data indicates no small business participation in this contract, which is a missed opportunity for economic inclusion and potentially limits competitive options.
Oversight & Accountability
The 'exclusion of sources' clause in the competition method requires closer scrutiny to ensure it was justified and did not unduly restrict competition, impacting oversight and accountability.
Related Government Programs
- All Other Miscellaneous General Purpose Machinery Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Unusual NAICS code classification
- Limited competition method ('Exclusion of Sources')
- No small business participation
- Potentially high cost for materials
- Single awardee
Tags
all-other-miscellaneous-general-purpose-, department-of-defense, ca, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.5 million to CUTTER LUMBER PRODUCTS. 4516276782!PALLET,MATERIAL HAN
Who is the contractor on this award?
The obligated recipient is CUTTER LUMBER PRODUCTS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $23.5 million.
What is the period of performance?
Start: 2010-11-30. End: 2012-02-28.
Was the 'exclusion of sources' justified and did it lead to a fair price?
The justification for excluding specific sources needs thorough review. If the exclusion was not well-founded or if it significantly limited the competitive landscape, it could have led to a higher price than achievable through a truly open and unrestricted competition. This raises concerns about the value for money obtained for the taxpayer.
What is the rationale behind classifying lumber pallet manufacturing under 'All Other Miscellaneous General Purpose Machinery Manufacturing'?
This NAICS code classification is highly unusual for lumber and pallet production. Typically, such activities fall under wood product manufacturing. This discrepancy suggests a potential error in classification, which could obscure spending patterns, hinder accurate benchmarking, and complicate oversight of procurement effectiveness.
What was the total cost and delivery timeline for these lumber pallets?
The contract was valued at $23,457,615.96 and had a duration of 455 days, with performance from November 30, 2010, to February 28, 2012. The number of units (2) seems exceptionally low for the contract value, suggesting either very large/specialized units or a data anomaly.
Industry Classification
NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › All Other Miscellaneous General Purpose Machinery Manufacturing
Product/Service Code: MATERIALS HANDLING EQPT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 10 RICKENBACKER CIR, LIVERMORE, CA, 14
Business Categories: Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations
Financial Breakdown
Contract Ceiling: $23,457,616
Exercised Options: $23,457,616
Current Obligation: $23,457,616
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPM53006D0005
IDV Type: IDC
Timeline
Start Date: 2010-11-30
Current End Date: 2012-02-28
Potential End Date: 2012-02-28 00:00:00
Last Modified: 2012-01-31
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