Department of Labor awards $2.3M contract for management consulting, raising questions about competition and value

Contract Overview

Contract Amount: $2,296,027 ($2.3M)

Contractor: JAB Innovative Solutions LLC

Awarding Agency: Department of Labor

Start Date: 2020-05-15

End Date: 2024-11-14

Contract Duration: 1,644 days

Daily Burn Rate: $1.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: LABOR HOURS

Sector: Other

Official Description: OALJ BUSINESS CONSULTING SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $2.3 million to JAB INNOVATIVE SOLUTIONS LLC for work described as: OALJ BUSINESS CONSULTING SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Pricing and value for money require further scrutiny due to lack of competitive bidding. 3. Performance risk appears moderate given the nature of administrative consulting services. 4. Contract duration extends over four years, indicating a long-term need for these services. 5. The contract falls within the administrative management consulting sector, a common area for federal support. 6. No small business set-aside was applied, potentially impacting small business participation.

Value Assessment

Rating: fair

The contract value of $2.3 million over approximately four years for administrative management consulting services appears within a reasonable range for such engagements. However, without competitive bids, it is difficult to benchmark the pricing against market rates or similar government contracts to definitively assess value for money. The 'labor hours' pricing structure necessitates careful monitoring of hours and rates to ensure efficiency and prevent cost overruns. Further analysis of the specific deliverables and the contractor's proposed labor mix would be needed for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the agency's needs, often due to unique capabilities or urgent requirements. The lack of competition means that the Department of Labor did not benefit from the price discovery and potential cost reductions that typically arise from multiple bidders vying for the contract. This limits the ability to assess if the most cost-effective solution was secured.

Taxpayer Impact: Taxpayers may not have received the best possible price for these consulting services due to the absence of a competitive bidding process. The government could potentially have achieved cost savings if multiple firms had competed for this contract.

Public Impact

The primary beneficiaries are the Department of Labor's administrative and management functions, which will receive support services. Services delivered include general management and administrative consulting, aimed at improving operational efficiency. The geographic impact is concentrated in the District of Columbia, where the agency is headquartered. Workforce implications are likely internal to the Department of Labor, with consultants supporting existing staff and processes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Lack of transparency in the justification for sole-source award.
Potential for cost creep if labor hours are not closely managed.
Contract duration of over four years requires ongoing performance monitoring.

Positive Signals

Contract addresses a clear need for administrative management support.
The contractor, JAB INNOVATIVE SOLUTIONS LLC, is performing services for the agency.
The contract is for a defined period, allowing for structured service delivery.

Sector Analysis

The administrative management and general management consulting services sector is a significant market within the federal government, supporting a wide array of agency functions. Federal spending in this category often focuses on improving efficiency, strategic planning, and operational support. Comparable spending benchmarks are difficult to establish without more specific details on the scope of work, but agencies frequently contract for these types of services to augment internal capabilities or bring in specialized expertise. This contract fits within that broader trend of federal agencies utilizing external consultants for management support.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this specific contract are limited unless they are prime contractors themselves or are subcontracted by the prime. The absence of a set-aside or explicit subcontracting goals may reduce the direct impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Labor's contracting officers and the Office of the Assistant Secretary for Administration and Management. Standard contract administration processes, including performance reviews and invoice approvals, would be in place. Transparency is limited by the sole-source nature of the award and the lack of publicly available detailed justification. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Management and Program Analysis Services
Business Consulting Services
Administrative Support Services
Federal IT Consulting Contracts
Government Program Management Support

Risk Flags

Sole-source award raises concerns about competition and potential value.
Lack of detailed justification for sole-source award.
Potential for higher costs due to absence of competitive bidding.
Long contract duration requires diligent performance oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $2.3 million to JAB INNOVATIVE SOLUTIONS LLC. OALJ BUSINESS CONSULTING SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is JAB INNOVATIVE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $2.3 million.

What is the period of performance?

Start: 2020-05-15. End: 2024-11-14.

What specific administrative management challenges is the Department of Labor seeking to address with this sole-source contract?

The provided data indicates the contract is for 'Administrative Management and General Management Consulting Services' (NAICS 541611) awarded to JAB INNOVATIVE SOLUTIONS LLC. While the specific challenges are not detailed, this category typically encompasses support for improving organizational efficiency, strategic planning, process optimization, human capital management, and overall operational effectiveness within an agency. Given the sole-source nature, it suggests the agency identified a unique need or a specific capability possessed by JAB INNOVATIVE SOLUTIONS LLC that was deemed essential and not readily available through open competition. Further inquiry with the agency would be required to understand the precise operational pain points or strategic objectives driving this procurement.

Can the pricing of $2.3 million over approximately four years be considered competitive for administrative management consulting services?

Without a competitive bidding process, it is challenging to definitively state whether the $2.3 million price tag is competitive. The contract is priced on a 'labor hours' basis, which means the total cost depends on the hours worked by the contractor's personnel and their respective rates. To assess competitiveness, one would typically compare this contract's estimated value and duration against similar sole-source or competitively awarded contracts for comparable services within the federal government or the private sector. Benchmarking would require detailed information on the skill levels, experience, and number of personnel assigned, as well as the specific deliverables expected. The absence of competition means the Department of Labor did not leverage market forces to potentially drive down costs.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data explicitly states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can satisfy the agency's requirements, or in cases of urgent need. Common justifications include unique technical capabilities, proprietary knowledge, or the need for continuity of services where switching contractors would be detrimental. Without the agency's formal justification document (e.g., a Justification and Approval - J&A), the precise reason for this sole-source award remains unknown. This lack of competition raises concerns about whether the agency explored all viable options to ensure the best value for taxpayers.

What are the potential risks associated with a sole-source contract of this duration and value?

Sole-source contracts, especially those with a significant value ($2.3 million) and long duration (over four years), carry inherent risks. The primary risk is the lack of price competition, which can lead to the government paying more than necessary. There's also a potential risk of complacency from the contractor, as they face no immediate threat from competitors. Performance monitoring becomes critical; the agency must diligently track deliverables, milestones, and contractor performance to ensure the services meet expectations. If the scope of work evolves, managing contract modifications and ensuring fair pricing for any changes can be more complex without a competitive baseline. Finally, the justification for the sole-source award itself needs to be robust to ensure it was appropriate.

How does this contract align with the Department of Labor's overall spending on administrative and management consulting services?

The provided data offers a snapshot of a single contract but does not provide context on the Department of Labor's total spending in this category. To understand alignment, one would need to analyze historical spending patterns for NAICS code 541611 (Administrative Management and General Management Consulting Services) and related codes within the Department of Labor over several fiscal years. This would reveal whether this $2.3 million award represents a typical investment, an increase, or a decrease in such services. It would also be beneficial to see how this contract compares to other consulting engagements within the department, particularly those awarded through competitive processes, to gauge the department's overall strategy for procuring these types of services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 1605C1-20-Q-00004

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 12932 NESS HOLLOW CT, BRISTOW, VA, 20136

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $2,926,592

Exercised Options: $2,926,592

Current Obligation: $2,296,027

Actual Outlays: $1,664,014

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 1605DC19D0003

IDV Type: IDC

Timeline