DoD's $26M freight contract with DARI CONCEPTS LLC saw a 10% cost overrun on a 90-day delivery order

Contract Overview

Contract Amount: $25,974,515 ($26.0M)

Contractor: Dari Concepts LLC

Awarding Agency: Department of Defense

Start Date: 2017-09-01

End Date: 2017-11-30

Contract Duration: 90 days

Daily Burn Rate: $288.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: IGF::CT::IGF OIR LINE HAUL

Plain-Language Summary

Department of Defense obligated $26.0 million to DARI CONCEPTS LLC for work described as: IGF::CT::IGF OIR LINE HAUL Key points: 1. The contract's final cost exceeded the initial award by approximately $2.6 million, indicating potential underestimation or unforeseen logistical challenges. 2. While awarded under full and open competition, the limited duration and specific nature of the service may have constrained the bidder pool. 3. The firm fixed-price contract type suggests that cost overruns were not anticipated or were absorbed by the contractor. 4. Performance occurred over a short, 90-day period, making long-term value assessment difficult but highlighting immediate cost control issues. 5. The contract falls within the broad category of general freight trucking, a sector with established market rates and competitive dynamics. 6. No small business set-aside was utilized, and no subcontracting information was provided, suggesting direct performance by the prime contractor.

Value Assessment

Rating: questionable

The final cost of $25.97 million for 90 days of long-distance, truckload freight services represents a significant expenditure. Benchmarking this against similar contracts is challenging without more specific route and service details. However, a 10% cost overrun on a firm-fixed-price contract is a notable deviation from the expected value, suggesting potential issues with initial pricing accuracy or execution efficiency. The value for money is questionable given the cost increase over a short performance period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the specific details regarding the number of bidders and the bidding process are not provided. The limited duration and specialized nature of 'General Freight Trucking, Long-Distance, Truckload' might influence the number and type of companies that participated, potentially impacting the breadth of price discovery.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes competitive pricing. However, the cost overrun in this instance suggests that the competitive process may not have fully captured all potential cost drivers or risks.

Public Impact

Military personnel and units requiring long-distance, truckload freight transportation services benefited from this contract. The services delivered included the movement of goods and equipment via truckload, supporting logistical operations for the Department of Defense. The geographic impact is national, covering long-distance routes within the United States for freight movement. The contract supported the trucking and logistics workforce, likely involving drivers, dispatchers, and support staff employed by the prime contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost overrun (10%) on a firm-fixed-price contract indicates potential issues with initial cost estimation or execution.
Limited performance duration (90 days) makes it difficult to assess long-term efficiency and contractor performance trends.
Lack of detailed subcontracting information raises questions about potential small business utilization and broader economic impact.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process was utilized.
Firm fixed-price contract type generally provides cost certainty for the government, assuming contractor adherence to terms.
Contract supported essential logistical operations for the Department of Defense.

Sector Analysis

This contract falls within the transportation and logistics sector, specifically focusing on freight trucking. The market for long-distance, truckload freight is substantial and highly competitive, with numerous carriers operating nationwide. Government contracts in this space often leverage existing commercial capabilities. Comparable spending benchmarks would typically be based on per-mile rates, per-load rates, or contract volume metrics within the broader freight industry, which is subject to fluctuations in fuel costs and driver availability.

Small Business Impact

This contract was not awarded as a small business set-aside, nor is there information indicating subcontracting to small businesses. This suggests that the prime contractor, DARI CONCEPTS LLC, likely performed the services directly. The absence of small business subcontracting means there was no direct mechanism within this specific contract to foster the small business ecosystem in the freight and logistics sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver services within the agreed-upon price. Transparency is generally provided through contract award databases, though detailed performance reports and specific oversight activities are not publicly available.

Related Government Programs

Department of Defense Freight Transportation Services
General Services Administration (GSA) Schedule 48 - Transportation, Delivery, and Relocation Services
Military Surface Deployment and Distribution Command (SDDC) Contracts

Risk Flags

Cost Overrun
Potential Underestimation of Costs
Short Performance Period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.0 million to DARI CONCEPTS LLC. IGF::CT::IGF OIR LINE HAUL

Who is the contractor on this award?

The obligated recipient is DARI CONCEPTS 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 $26.0 million.

What is the period of performance?

Start: 2017-09-01. End: 2017-11-30.

What specific factors contributed to the 10% cost overrun on this contract?

The provided data indicates a final cost of $25,974,515.25 against an award amount that, while not explicitly stated as the initial award, is implied to be lower given the overrun. A 10% overrun suggests that the initial cost estimation may have been inaccurate or that unforeseen circumstances arose during the 90-day performance period. Potential factors contributing to such overruns in freight trucking include unexpected increases in fuel prices, driver shortages leading to higher labor costs or extended transit times, unforeseen maintenance issues with vehicles, or logistical complexities not fully accounted for during the bidding phase. Without more detailed performance reports or contractor explanations, pinpointing the exact cause remains speculative, but the overrun itself signals a deviation from expected cost control.

How does the final cost of this contract compare to similar long-distance freight contracts awarded by the DoD?

Direct comparison of the final cost ($25.97 million) for this 90-day delivery order is difficult without knowing the specific routes, volume of freight, types of goods transported, and service level agreements. However, the overrun percentage (approximately 10%) is a key indicator. A 10% cost increase on a firm-fixed-price contract is generally considered significant, especially over a short duration. Benchmarking would ideally involve analyzing per-mile rates, cost per ton-mile, or cost per shipment for comparable DoD freight movements. If similar contracts typically experience lower cost variances or are awarded at more accurate initial estimates, this contract's overrun could suggest less efficient pricing or execution compared to the norm.

What are the primary risks associated with relying on a single delivery order for critical freight services?

Relying on a single delivery order, even if awarded under full and open competition, carries inherent risks. If the contractor, DARI CONCEPTS LLC, experiences operational failures (e.g., fleet breakdowns, driver shortages, financial instability), the government could face significant disruptions to its supply chain and logistical operations. The short 90-day duration mitigates some long-term dependency risks but increases the criticality of the contractor's performance during that specific window. Furthermore, if the initial award price was significantly underestimated, the government might face pressure to approve cost adjustments or face service interruptions, potentially leading to higher overall costs than initially anticipated.

What is the typical performance duration for long-distance freight contracts of this nature?

The typical performance duration for long-distance freight contracts can vary widely depending on the scope and nature of the services required. Contracts can range from short-term, task-order-based agreements like this 90-day delivery order, to longer-term indefinite-delivery, indefinite-quantity (IDIQ) contracts that may span several years. For specific, time-bound logistical needs, short durations are common. However, for ongoing transportation requirements, longer-term contracts or IDIQs are more typical to ensure consistent service availability and potentially achieve better economies of scale. The 90-day duration here suggests a specific, short-term logistical requirement rather than an ongoing need.

How does the 'General Freight Trucking, Long-Distance, Truckload' classification impact competition and pricing?

The classification 'General Freight Trucking, Long-Distance, Truckload' falls into a well-established and generally competitive segment of the transportation industry. This classification implies services provided by large trucks carrying full loads over significant distances. The market includes numerous carriers, ranging from large national companies to smaller regional players. This broad classification typically allows for robust competition, as many firms possess the necessary assets (trucks, trailers) and operational capabilities. Pricing in this segment is often influenced by factors such as fuel costs, driver availability, market demand, and lane density. While competition is generally healthy, specific lanes or urgent requirements can sometimes lead to less favorable pricing.

Industry Classification

NAICS: Transportation and Warehousing › General Freight Trucking › General Freight Trucking, Long-Distance, Truckload

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7251 W. LAKE MEAD BLVD., SUITE 300, LAS VEGAS, NV, 89128

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Limited Liability Corporation, Not Designated a Small Business, Small Business, Special Designations, Veteran Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $25,974,515

Exercised Options: $25,974,515

Current Obligation: $25,974,515

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56KGZ15D8004

IDV Type: IDC

Timeline