USAID awards 3-year, $46M contract for 4PL commodity logistics in Africa, emphasizing reliability

Contract Overview

Contract Amount: $46,004,711 ($46.0M)

Contractor: Africa Global Logistics Mocambique, S.A

Awarding Agency: Agency for International Development

Start Date: 2021-06-29

End Date: 2026-07-30

Contract Duration: 1,857 days

Daily Burn Rate: $24.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: THE AUTHORIZED AGENT IS REQUESTED TO ISSUE AN RFP TO PROCURE 4PL SERVICES FOR THE TRANSPORTATION OF COMMODITIES. THE COMMODITIES FOR HEALTH: ENSURING GUARANTEED ACCESS AND REABILITY (CHEGAR)IS ANTICIPATED TO BE A THREE YEAR ACTIVITY.

Plain-Language Summary

Agency for International Development obligated $46.0 million to AFRICA GLOBAL LOGISTICS MOCAMBIQUE, S.A for work described as: THE AUTHORIZED AGENT IS REQUESTED TO ISSUE AN RFP TO PROCURE 4PL SERVICES FOR THE TRANSPORTATION OF COMMODITIES. THE COMMODITIES FOR HEALTH: ENSURING GUARANTEED ACCESS AND REABILITY (CHEGAR)IS ANTICIPATED TO BE A THREE YEAR ACTIVITY. Key points: 1. Contract aims to ensure guaranteed access and reliability for essential commodities. 2. Focus on 4PL services suggests a strategic approach to supply chain management. 3. The contract duration of nearly 4 years indicates a significant, long-term need. 4. Awarded through full and open competition, suggesting a robust market. 5. The cost-plus-incentive-fee structure incentivizes performance and cost control. 6. This contract supports critical health commodity distribution in the region.

Value Assessment

Rating: good

The contract value of $46 million over approximately 3.7 years (2227 days) suggests an average annual spend of roughly $12.4 million. Benchmarking this requires understanding the specific scope of 4PL services for health commodities in Africa, which can be complex and highly variable. However, the use of a Cost Plus Incentive Fee (CPIF) contract type indicates a willingness to pay for performance and efficiency, which can be a good value indicator if managed effectively. Without specific comparable contracts for similar 4PL services in the region, a precise value-for-money assessment is challenging, but the competitive nature of the award provides some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of 5 bids suggests a healthy level of interest and competition for this significant logistics contract. This broad competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive environment where contractors strive to offer the most cost-effective solutions.

Public Impact

Beneficiaries include populations in Africa relying on the reliable delivery of health commodities. Services delivered encompass comprehensive 4PL logistics, including transportation and supply chain management. Geographic impact is focused on regions within Africa where the CHEGAR program operates. Workforce implications may include local employment opportunities within the logistics and supply chain sector managed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if not closely monitored.
Geopolitical and logistical complexities in African regions can pose delivery risks.
Dependence on a single contractor for critical commodity flow requires robust performance management.

Positive Signals

Full and open competition suggests a strong market response and potential for competitive pricing.
The CPIF contract type incentivizes the contractor to achieve performance targets and manage costs efficiently.
The contract's focus on reliability for health commodities addresses a critical need in the target region.

Sector Analysis

This contract falls within the broader logistics and transportation sector, specifically focusing on specialized 4PL (fourth-party logistics) services for health commodities. The market for such services in developing regions is characterized by unique challenges including infrastructure limitations, security concerns, and the need for specialized handling of sensitive goods. USAID's investment in this area is crucial for ensuring the efficacy of health programs by guaranteeing the availability of essential supplies. Comparable spending benchmarks would typically be found within other large-scale international development logistics contracts, often managed by agencies like USAID, the Department of Defense, or other global health organizations.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the scale and specialized nature of 4PL services for international health commodities, it is likely that the prime contract is awarded to a larger entity. However, the prime contractor may engage small businesses for subcontracting opportunities related to transportation, warehousing, or other support services within the supply chain, though this is not explicitly detailed.

Oversight & Accountability

Oversight for this contract would primarily be conducted by the Agency for International Development (USAID), likely through its contracting officers and program monitors. The Cost Plus Incentive Fee (CPIF) structure necessitates close monitoring of performance metrics and cost expenditures to ensure the incentive goals are met and costs remain reasonable. Transparency would be facilitated through contract reporting requirements and potentially public contract databases. Inspector General jurisdiction would apply for any investigations into fraud, waste, or abuse related to the contract.

Related Government Programs

Global Health Supply Chain Procurement and Logistics Management (GHSC-PLM)
USAID Health Sector Programs
Commodity Procurement and Logistics Services (CPALS)
African Health Initiative

Risk Flags

Geopolitical instability in operating regions.
Infrastructure limitations impacting transportation.
Potential for commodity spoilage or loss.
Currency fluctuations affecting costs.
Contractor performance variability.

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $46.0 million to AFRICA GLOBAL LOGISTICS MOCAMBIQUE, S.A. THE AUTHORIZED AGENT IS REQUESTED TO ISSUE AN RFP TO PROCURE 4PL SERVICES FOR THE TRANSPORTATION OF COMMODITIES. THE COMMODITIES FOR HEALTH: ENSURING GUARANTEED ACCESS AND REABILITY (CHEGAR)IS ANTICIPATED TO BE A THREE YEAR ACTIVITY.

Who is the contractor on this award?

The obligated recipient is AFRICA GLOBAL LOGISTICS MOCAMBIQUE, S.A.

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $46.0 million.

What is the period of performance?

Start: 2021-06-29. End: 2026-07-30.

What is the track record of Africa Global Logistics Mozambique, S.A. in managing large-scale international logistics contracts, particularly for health commodities?

Assessing the track record of Africa Global Logistics Mozambique, S.A. requires a review of their past performance on similar contracts. Information regarding their experience with USAID or other international organizations, their success in meeting delivery timelines, managing complex supply chains in challenging environments, and their financial stability would be crucial. Specific details on previous projects, client feedback, and any past performance issues or accolades would provide insight into their capability to execute this 4PL services contract effectively. Without direct access to performance evaluations or a detailed project history, it is difficult to definitively assess their suitability beyond the fact they were awarded this contract competitively.

How does the estimated annual cost of $12.4 million compare to similar 4PL contracts for health commodities in sub-Saharan Africa?

Benchmarking the estimated annual cost of $12.4 million for this 4PL contract requires access to data on comparable contracts. The cost of 4PL services in sub-Saharan Africa can vary significantly due to factors like infrastructure, security, specific commodity types, and the scope of services (e.g., warehousing, last-mile delivery, cold chain management). Generally, large-scale health commodity logistics contracts in the region can range from several million to tens of millions of dollars annually, depending on the scale and complexity. The Cost Plus Incentive Fee (CPIF) structure means the final cost will depend on performance, making direct comparisons challenging without detailed service level agreements and performance outcomes. However, the competitive bidding process suggests that this figure was deemed reasonable by USAID relative to the anticipated services and market conditions.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Primary risks for this contract include logistical challenges in diverse African terrains, potential supply chain disruptions (e.g., due to political instability, natural disasters, or infrastructure failures), ensuring the integrity and security of health commodities (especially temperature-sensitive ones), and potential cost overruns inherent in a CPIF contract. Mitigation strategies likely involve robust risk management plans developed by the contractor and overseen by USAID, including contingency planning, real-time tracking and monitoring systems, strong security protocols, established relationships with local partners, and clear performance metrics tied to incentives. USAID's oversight and the contract's incentive structure are designed to encourage proactive risk mitigation by the contractor.

How effective is the Cost Plus Incentive Fee (CPIF) structure in ensuring value for money and performance for this specific contract?

The CPIF structure is designed to incentivize the contractor to perform efficiently and effectively while allowing for flexibility in costs. For this contract, it means Africa Global Logistics Mozambique, S.A. is rewarded for meeting or exceeding specific performance targets (e.g., delivery timeliness, commodity integrity) and potentially penalized for falling short, while costs are reimbursed plus a fee that varies based on performance. This structure can be effective if the incentive targets are well-defined, measurable, and aligned with USAID's program goals for the CHEGAR initiative. It encourages the contractor to manage costs proactively to maximize their fee, potentially leading to better value than a fixed-price contract if performance is paramount. However, effective oversight is critical to prevent unnecessary costs from being incurred.

What is the historical spending pattern for similar 4PL or commodity logistics services by USAID in the African region?

USAID has historically allocated significant funding towards logistics and supply chain management for its health programs in Africa, recognizing its critical role in program success. Spending patterns vary widely based on the specific health focus (e.g., HIV/AIDS, malaria, maternal health), the geographic scope, and the duration of initiatives. Large contracts for procurement and logistics management, often encompassing 4PL services, can range from tens to hundreds of millions of dollars over several years. The CHEGAR program's $46 million award over approximately 3.7 years aligns with the scale of USAID's typical investments in ensuring the reliable supply of essential health commodities across the continent. Analyzing past budgets for similar programs would reveal trends in resource allocation towards supply chain strengthening.

Industry Classification

NAICS: Transportation and Warehousing › Other Support Activities for Transportation › All Other Support Activities for Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › OTHER TRANSPORT, TRAVEL, RELOCAT SV

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 72065620R00008

Offers Received: 5

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 833 DESPORTISTAS ROAD, JAT V1 BUILDING, 12TH FLOOR, MAPUTO

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $49,799,928

Exercised Options: $49,799,928

Current Obligation: $46,004,711

Actual Outlays: $37,805,511

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline