DHS awards $2M+ for strategic management support, with 2756% over-budgeting on a prior contract

Contract Overview

Contract Amount: $2,036,390 ($2.0M)

Contractor: Techpride-Jpi JV, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2024-09-20

End Date: 2026-09-29

Contract Duration: 739 days

Daily Burn Rate: $2.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: STRATEGIC MANAGEMENT SUPPORT SERVICES

Place of Performance

Location: BLACKSBURG, MONTGOMERY County, VIRGINIA, 24060

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $2.0 million to TECHPRIDE-JPI JV, LLC for work described as: STRATEGIC MANAGEMENT SUPPORT SERVICES Key points: 1. The contract value of over $2 million for strategic management support services indicates a significant investment in administrative and general management consulting. 2. A notable risk indicator is the contractor's prior contract, which experienced an alarming 2756% cost overrun, raising concerns about financial management and project execution. 3. The contract is a delivery order under a larger contract, suggesting it's part of an ongoing or established service requirement. 4. The firm fixed-price contract type aims to control costs, but the contractor's past performance warrants close monitoring. 5. The services fall under administrative management and general management consulting, a broad category often involving strategic planning, organizational efficiency, and operational improvements. 6. The contract is awarded to TECHPRIDE-JPI JV, LLC, a joint venture, which may offer specialized capabilities but also introduces potential complexities in management and accountability.

Value Assessment

Rating: concerning

Benchmarking the value of this $2.04 million contract is challenging without specific deliverables. However, the contractor's history of a 2756% cost overrun on a previous contract is a severe red flag. This indicates a significant disconnect between initial estimates and final costs, suggesting potential issues with pricing accuracy, scope management, or execution efficiency. This historical performance severely undermines confidence in the current contract's value proposition and necessitates rigorous oversight to prevent similar overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bidders (no: 2) suggests a moderate level of competition for this specific award. While full and open competition is generally preferred for ensuring fair pricing and access to a wide range of capabilities, a low number of bids can sometimes indicate market limitations or specific requirements that only a few entities can meet.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces. However, with only two bidders, the potential for significant price reductions may be limited compared to scenarios with more robust competition.

Public Impact

The U.S. Coast Guard, a component of the Department of Homeland Security, is the primary beneficiary of these strategic management support services. The services are expected to enhance administrative and general management consulting capabilities within the Coast Guard. The contract is located in Virginia, suggesting a potential impact on the local workforce and economy in that region. The contract aims to improve the operational efficiency and strategic direction of the Coast Guard's administrative functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extreme cost overruns (2756%) on a previous contract by the same contractor raise significant concerns about financial management and project predictability.
The low number of bidders (2) in a full and open competition could indicate potential market saturation or specialized requirements that limit broader participation.
The joint venture structure of the contractor (TECHPRIDE-JPI JV, LLC) may introduce complexities in oversight and accountability if not managed effectively.
The broad nature of 'Strategic Management Support Services' can sometimes lead to scope creep if not clearly defined and managed.
The contract duration of approximately two years (739 days) requires sustained oversight to ensure performance remains on track and within budget.

Positive Signals

The award was made under full and open competition, suggesting a commitment to leveraging market capabilities.
The firm fixed-price contract type provides a degree of cost certainty, assuming effective performance management.
The contract is for strategic management support, which, if executed well, can lead to significant improvements in agency efficiency and effectiveness.
The contractor is a joint venture, potentially bringing together diverse expertise to meet the agency's needs.

Sector Analysis

Strategic management support services fall under the broader management consulting industry, which is a significant sector within professional services. This industry is characterized by a wide range of firms, from large global consultancies to specialized boutique firms. The market size for management consulting is substantial, driven by organizations seeking to improve efficiency, navigate complex challenges, and implement strategic initiatives. This contract with the U.S. Coast Guard represents a specific application of these services within the federal government's defense and security sector, where specialized expertise is often required to support complex operations and administrative functions.

Small Business Impact

This contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses are unlikely to be direct beneficiaries of this award. However, the joint venture structure of the prime contractor, TECHPRIDE-JPI JV, LLC, may involve subcontracting opportunities. The extent to which small businesses will participate as subcontractors will depend on the joint venture's internal policies and the specific requirements of the contract. Without a small business set-aside, the direct impact on the small business ecosystem is minimal, but indirect opportunities through subcontracting remain a possibility.

Oversight & Accountability

Oversight for this contract will primarily reside with the U.S. Coast Guard, a component of the Department of Homeland Security. Given the contractor's history of significant cost overruns on a prior contract, rigorous oversight is crucial. This should include detailed monitoring of performance metrics, regular financial reviews, and strict adherence to the contract's scope of work. Transparency will be key, with clear reporting requirements from the contractor. The Department of Homeland Security's Office of Inspector General may also have jurisdiction to investigate potential fraud, waste, or abuse, especially in light of past performance issues.

Related Government Programs

Department of Homeland Security - Strategic Planning and Management
U.S. Coast Guard - Operational Support Services
Federal Management Consulting Contracts
Administrative Services Contracts
Government-wide Acquisition Contracts (GWACs) for Professional Services

Risk Flags

High risk of cost overruns due to contractor's past performance.
Potential for performance issues if contractor underbids or mismanages costs under FFP.
Limited competition may reduce price discovery benefits.
Complexity of joint venture management requires diligent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $2.0 million to TECHPRIDE-JPI JV, LLC. STRATEGIC MANAGEMENT SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is TECHPRIDE-JPI JV, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $2.0 million.

What is the period of performance?

Start: 2024-09-20. End: 2026-09-29.

What specific services are included under 'STRATEGIC MANAGEMENT SUPPORT SERVICES' for the U.S. Coast Guard, and how do they align with the agency's mission priorities?

The contract falls under NAICS code 541611 (Administrative Management and General Management Consulting Services). This typically encompasses a range of activities such as organizational analysis, strategic planning, process improvement, performance management, and policy development. For the U.S. Coast Guard, these services likely aim to enhance operational efficiency, optimize resource allocation, improve decision-making processes, and support the development and implementation of long-term strategic goals. The specific alignment with mission priorities would depend on the detailed statement of work, which is not provided here but would likely focus on areas critical to maritime safety, security, and environmental protection.

Can you provide more details on the prior contract that experienced a 2756% cost overrun, including the nature of the services and the reasons for the overrun?

Unfortunately, the provided data does not include specific details about the prior contract that experienced a 2756% cost overrun. To fully assess the risk associated with TECHPRIDE-JPI JV, LLC, further investigation into that previous contract would be necessary. Key information needed would include the contract's purpose, the original estimated cost, the final awarded cost, the duration, and the documented reasons for the significant overrun. Potential causes could range from poor initial estimation, scope creep, unforeseen technical challenges, contractor performance issues, or external factors. Understanding these details is critical for determining if the current contract is at similar risk.

What is the typical market rate or average cost for similar strategic management support services provided to federal agencies of the U.S. Coast Guard's size and scope?

Determining a precise market rate for 'Strategic Management Support Services' is complex due to the variability in scope, deliverables, and required expertise. However, general benchmarks for management consulting services for federal agencies can be established. Hourly rates for senior consultants can range from $150 to $400+, depending on specialization and experience. For a contract valued at over $2 million over approximately two years, this suggests a team of consultants working on the project. Without a detailed breakdown of labor categories and hours, a direct per-unit cost comparison is difficult. However, the historical cost overrun of 2756% suggests that the pricing on the prior contract was significantly misaligned with actual costs incurred.

How does the joint venture structure of TECHPRIDE-JPI JV, LLC impact accountability and performance oversight for this contract?

A joint venture (JV) structure, like that of TECHPRIDE-JPI JV, LLC, can offer specialized expertise by combining the strengths of its constituent companies. However, it can also introduce complexities in accountability and oversight. The government must ensure that a clear lead entity or management structure is in place within the JV to manage performance and reporting. Accountability can be diffused if not clearly defined, potentially making it harder to pinpoint responsibility for issues. Oversight mechanisms should focus on the JV's overall performance, ensuring that the combined capabilities are effectively leveraged and that the government receives the intended value. Clear communication channels and defined points of contact within the JV are essential for effective management.

What are the potential implications of the firm fixed-price contract type given the contractor's history of significant cost overruns?

A firm fixed-price (FFP) contract type is generally intended to shift cost risk to the contractor, providing budget certainty for the government. However, given TECHPRIDE-JPI JV, LLC's history of a 2756% cost overrun on a previous contract, the FFP structure here presents a nuanced risk. While the government is protected from cost increases beyond the agreed price, the contractor may face significant financial losses if they underestimate costs or encounter unforeseen challenges, potentially leading to performance issues or even contract default. Conversely, if the contractor has learned from past mistakes and implemented better cost controls, the FFP could incentivize efficient delivery. Rigorous performance monitoring is crucial to ensure the contractor can meet obligations under the fixed price.

Are there any specific performance metrics or key performance indicators (KPIs) defined in the contract that will be used to measure the success of the strategic management support services?

The provided data does not specify the key performance indicators (KPIs) or performance metrics for this contract. In a firm fixed-price contract for services like strategic management support, KPIs are crucial for measuring the contractor's success and ensuring the government receives the intended value. These metrics would typically be detailed in the contract's statement of work or performance work statement. Examples could include timeliness of deliverables, quality of analysis and recommendations, achievement of specific process improvement targets, or successful implementation of strategic initiatives. Without defined KPIs, assessing performance and holding the contractor accountable becomes more subjective and challenging.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1750 KRAFT DR, BLACKSBURG, VA, 24060

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,036,390

Exercised Options: $2,036,390

Current Obligation: $2,036,390

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QRAA23D007F

IDV Type: FSS

Timeline