DoD's $28M contract for pallets and materials to Treen Box & Pallet Corp. raises value and competition questions

Contract Overview

Contract Amount: $28,018,834 ($28.0M)

Contractor: Treen BOX & Pallet Corp.

Awarding Agency: Department of Defense

Start Date: 2010-11-30

End Date: 2012-09-30

Contract Duration: 670 days

Daily Burn Rate: $41.8K/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: 4516276712!PALLET,MATERIAL HAN

Place of Performance

Location: BENSALEM, BUCKS County, PENNSYLVANIA, 19020

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $28.0 million to TREEN BOX & PALLET CORP. for work described as: 4516276712!PALLET,MATERIAL HAN Key points: 1. The contract's value appears high relative to the quantity of goods, suggesting potential overpricing. 2. Limited competition was noted, with only two bidders, which may have impacted price discovery. 3. The contractor has a history of receiving federal contracts, but performance details are not readily available. 4. The contract duration of 670 days is substantial for the procurement of basic materials. 5. The 'All Other Miscellaneous General Purpose Machinery Manufacturing' NAICS code seems tangential to the primary product (pallets). 6. The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', indicating a complex procurement process. 7. The contract's value is significant within the broader category of miscellaneous manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific details on the type and quantity of pallets and materials procured. However, the total award of over $28 million for what appears to be basic logistical materials over a two-year period suggests a potentially high per-unit cost. Comparing this to industry standards for similar items, such as standard wooden pallets, indicates that the price may not be competitive. Further analysis of the specific product specifications and market rates for comparable materials is needed to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', which implies that while the competition was intended to be open, certain sources were excluded. Only two bidders participated in this process. This limited number of bidders suggests that the competition may not have been as robust as a truly full and open competition. The restricted pool of bidders could have led to less aggressive pricing and potentially higher costs for the government.

Taxpayer Impact: With only two bidders, taxpayers may have received less competitive pricing than if a wider range of suppliers had been able to participate. This could translate to millions of dollars in potentially avoidable costs.

Public Impact

The Department of Defense benefits from the supply of essential materials for logistical operations. Treen Box & Pallet Corp. receives significant revenue from this federal contract. The contract supports jobs within the manufacturing sector, specifically related to packaging and materials handling. The geographic impact is primarily centered around the contractor's facilities in Pennsylvania, though the materials are likely distributed to various military installations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for inflated pricing due to limited competition.
Ambiguity in the NAICS code suggests a possible mismatch between the stated industry and the procured goods.
Lack of detailed performance metrics makes it difficult to assess the contractor's effectiveness.
The exclusion of sources in the competition process warrants further investigation into the rationale.

Positive Signals

The contract was awarded under a form of open competition, indicating an attempt to solicit offers.
The contractor, Treen Box & Pallet Corp., has experience in fulfilling federal contracts.
The contract specifies a Firm Fixed Price (FFP) type, which provides cost certainty for the government.
The award was made to a domestic company, supporting the U.S. economy.

Sector Analysis

The procurement falls under the miscellaneous manufacturing sector, specifically related to packaging and material handling. This sector is crucial for supporting logistics across various industries, including defense. The market for pallets and related materials is generally competitive, with numerous suppliers. However, specialized or large-volume contracts can sometimes lead to consolidation or limited bidding opportunities. The $28 million award represents a significant portion of spending within this niche, highlighting the importance of efficient procurement practices.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. Without specific set-aside goals or subcontracting requirements, the direct impact on the small business ecosystem for this particular contract is likely minimal, though the prime contractor's own supply chain may involve small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA) and the relevant contracting officer within the Defense Logistics Agency (DLA). Transparency is facilitated through contract databases like FPDS. Accountability measures are inherent in the Firm Fixed Price (FFP) contract type, which places the cost risk on the contractor. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency (DLA) Procurement
Military Packaging and Container Contracts
General Purpose Machinery Manufacturing
Federal Supply Schedule (FSS) Contracts
Department of Defense Supply Chain Management

Risk Flags

Potential for overpricing due to limited competition.
Unusual NAICS code assignment.
Lack of detailed performance data.
Ambiguity in contract scope.
Exclusion of sources in competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.0 million to TREEN BOX & PALLET CORP.. 4516276712!PALLET,MATERIAL HAN

Who is the contractor on this award?

The obligated recipient is TREEN BOX & PALLET CORP..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $28.0 million.

What is the period of performance?

Start: 2010-11-30. End: 2012-09-30.

What specific types and quantities of pallets and materials were procured under this contract?

The provided data does not specify the exact types and quantities of pallets and materials. The contract is broadly categorized under 'All Other Miscellaneous General Purpose Machinery Manufacturing' (NAICS 333999), which is unusual for a contract primarily for pallets and materials. Typically, pallet manufacturing falls under different NAICS codes, such as 321920 (Wood Container and Pallet Manufacturing). The lack of specificity makes it difficult to ascertain the precise nature of the goods and thus to perform a detailed value analysis. Further investigation into the contract's statement of work or detailed line items would be necessary to understand the scope and justify the $28 million award.

How does the per-unit cost of these pallets and materials compare to market rates?

Without knowing the specific types and quantities of pallets and materials, a direct per-unit cost comparison to market rates is not feasible. However, given the total award of $28 million over approximately two years, the implied average annual spending is $14 million. If this contract is for standard wooden pallets, the per-unit cost would likely be significantly higher than typical market prices, which range from $10-$30 for new standard pallets, depending on type and volume. The ambiguity surrounding the product description and the unusual NAICS code prevent a definitive benchmark, but the overall value raises concerns about potential overpayment.

What is the track record of Treen Box & Pallet Corp. with federal contracts, particularly regarding performance and pricing?

Treen Box & Pallet Corp. has a history of receiving federal contracts, primarily from the Department of Defense, as indicated by the data. However, detailed performance metrics or past pricing analyses for this contractor are not readily available in the provided summary. While the company has secured significant federal funding, the absence of readily accessible performance reviews or past performance evaluations makes it challenging to assess their reliability and cost-effectiveness on previous engagements. Further research into contract performance reports and payment histories would be needed to evaluate their track record comprehensively.

What are the risks associated with the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type suggests a complex procurement scenario. While it aims for open competition, the explicit exclusion of certain sources implies that the pool of potential bidders was intentionally narrowed. This could be due to specific technical requirements, national security concerns, or other justifications. However, excluding sources inherently limits competition, potentially leading to higher prices and reduced innovation. The risk lies in whether the exclusions were truly necessary and justified, or if they inadvertently stifled competition, thereby increasing costs for the government and taxpayers.

How does this contract's value compare to other similar procurements for logistical materials by the DoD?

Comparing this $28 million contract to other similar procurements is difficult without precise details on the goods procured. If this contract is for standard pallets, $28 million over two years is a substantial amount, potentially indicating a higher-than-average cost per unit or a very large volume requirement. The Defense Logistics Agency (DLA) procures vast quantities of supplies, and while large contracts are common, the specific nature of this award, including the unusual NAICS code and limited competition, makes direct comparison challenging. Benchmarking against other DLA contracts for packaging, containers, or related materials would require a more granular understanding of the contract's scope.

What is the significance of the NAICS code 333999 ('All Other Miscellaneous General Purpose Machinery Manufacturing') for this contract?

The assignment of NAICS code 333999 ('All Other Miscellaneous General Purpose Machinery Manufacturing') to a contract for pallets and materials is highly unusual and warrants scrutiny. Pallets are typically classified under NAICS 321920 (Wood Container and Pallet Manufacturing) or similar codes related to wood products or packaging. Machinery manufacturing involves the production of machines and equipment. This discrepancy suggests a potential misclassification, which could obscure the true nature of the procurement, complicate performance analysis, and potentially indicate that the contract scope is broader or different than initially perceived. It raises questions about the accuracy of the data and the justification for this specific code.

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: 1950 STREET RD STE 400, BENSALEM, PA, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $28,018,834

Exercised Options: $28,018,834

Current Obligation: $28,018,834

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPM53006D0004

IDV Type: IDC

Timeline