State Dept. Pays $10M for Courier Services, Lacking Competition
Contract Overview
Contract Amount: $10,043,046 ($10.0M)
Contractor: Servicesource Inc
Awarding Agency: Department of State
Start Date: 2020-12-01
End Date: 2026-05-31
Contract Duration: 2,007 days
Daily Burn Rate: $5.0K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: BASE YEAR 12/1/2020-11/30/2021 OPTION YEAR 1 12/1/2021-11/30/2022 OPTION YEAR 2 12/1/2022-11/30/2023 OPTION YEAR 3 12/1/2023-11/30/2024 OPTION YEAR 4 12/1/2024-11/30/2025
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20520
Plain-Language Summary
Department of State obligated $10.0 million to SERVICESOURCE INC for work described as: BASE YEAR 12/1/2020-11/30/2021 OPTION YEAR 1 12/1/2021-11/30/2022 OPTION YEAR 2 12/1/2022-11/30/2023 OPTION YEAR 3 12/1/2023-11/30/2024 OPTION YEAR 4 12/1/2024-11/30/2025 Key points: 1. The Department of State awarded a $10M contract for courier and express delivery services. 2. The contract was not competed, raising concerns about price discovery and value. 3. Services are provided by SERVICE SOURCE INC, a company with a history of sole-source awards. 4. The sector is essential for government operations but often faces competition challenges.
Value Assessment
Rating: questionable
Pricing is difficult to assess due to the lack of competitive bids. Without benchmarks from similar contracts, it's unclear if the $10M price represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a limited approach. This likely hindered price discovery and may have led to a higher cost for taxpayers.
Taxpayer Impact: The absence of competition suggests potential overspending, impacting taxpayer funds negatively.
Public Impact
Citizens may be paying more for essential government mail and package delivery due to lack of competition. Government agencies rely on these services, and inefficient spending can impact overall operational effectiveness. The lack of transparency in pricing for this contract limits public understanding of federal spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential Overpricing
- Limited Transparency
Positive Signals
- Essential Service Provided
- Clear Contract Type (Firm Fixed Price)
Sector Analysis
This contract falls within the couriers and express delivery services sector, crucial for inter-agency and external communications. Benchmarks for this sector vary widely based on volume and service level, but competition typically drives efficiency.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This represents a missed opportunity for small business participation.
Oversight & Accountability
The limited competition and lack of clear justification for sole-sourcing warrant further oversight. Accountability for ensuring fair pricing and exploring competitive options is needed.
Related Government Programs
- Couriers and Express Delivery Services
- Department of State Contracting
- Department of State Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Limited transparency in award justification
- Missed opportunity for small business engagement
Tags
couriers-and-express-delivery-services, department-of-state, dc, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $10.0 million to SERVICESOURCE INC. BASE YEAR 12/1/2020-11/30/2021 OPTION YEAR 1 12/1/2021-11/30/2022 OPTION YEAR 2 12/1/2022-11/30/2023 OPTION YEAR 3 12/1/2023-11/30/2024 OPTION YEAR 4 12/1/2024-11/30/2025
Who is the contractor on this award?
The obligated recipient is SERVICESOURCE INC.
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $10.0 million.
What is the period of performance?
Start: 2020-12-01. End: 2026-05-31.
What is the justification for not competing this essential delivery service contract?
The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION'. A deeper dive into the specific reasons, such as unique capabilities or urgent needs, would be required to fully understand the justification. Without this, it raises concerns about whether competitive avenues were adequately explored.
How can the government ensure fair pricing without competitive bidding?
Ensuring fair pricing without competition is challenging. The government could utilize historical pricing data from similar, competed contracts, conduct independent cost analyses, or engage in extensive price negotiation with the sole provider. However, these methods are generally less effective than the price pressure generated by a competitive bidding process.
What is the potential impact on service quality when a contract is not competed?
While a lack of competition doesn't automatically equate to poor service quality, it can reduce the incentive for the awarded vendor to innovate or maintain high standards. Without the threat of losing business to a competitor, the vendor might become complacent. However, the firm fixed-price nature of this contract provides some incentive for the vendor to control costs.
Industry Classification
NAICS: Transportation and Warehousing › Couriers and Express Delivery Services › Couriers and Express Delivery Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 10467 WHITE GRANITE DRIVE, OAKTON, VA, 22124
Business Categories: AbilityOne Program Participant, Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $10,271,417
Exercised Options: $10,271,417
Current Obligation: $10,043,046
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2020-12-01
Current End Date: 2026-05-31
Potential End Date: 2026-05-31 00:00:00
Last Modified: 2026-02-06
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