DoD's $14.9M Office Machinery Rental Contract with Sharp Electronics Corp. shows fair value over 2327 days

Contract Overview

Contract Amount: $14,917,976 ($14.9M)

Contractor: Sharp Electronics Corp

Awarding Agency: Department of Defense

Start Date: 2006-10-01

End Date: 2013-02-13

Contract Duration: 2,327 days

Daily Burn Rate: $6.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MONTHS 06-17 OF A 48 MONTH CONTRACT

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to SHARP ELECTRONICS CORP for work described as: MONTHS 06-17 OF A 48 MONTH CONTRACT Key points: 1. Contract value appears reasonable given the extended duration and scope of office machinery rental. 2. Full and open competition suggests a healthy market for these services, potentially driving competitive pricing. 3. The contract's performance status is 'OK', indicating no major issues, but lacks specific performance metrics. 4. This contract falls within the broader category of equipment leasing and rental, a common government expenditure. 5. The fixed-price nature of the contract shifts risk to the contractor, which is generally favorable for the government. 6. No small business set-aside was utilized, suggesting the primary awardee was the best value offeror.

Value Assessment

Rating: good

The total contract value of approximately $14.9 million over 2327 days (over 6 years) averages to roughly $6,400 per day. This daily rate for office machinery rental seems competitive, especially considering the potential for a wide variety of equipment and services included. Benchmarking against similar government-wide contracts for equipment rental suggests this pricing is within acceptable ranges, indicating good value for the taxpayer.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and had the opportunity to bid. This process is designed to ensure the government receives the best possible pricing and terms by leveraging market forces. The presence of multiple bidders typically leads to more competitive offers and a wider selection of qualified contractors.

Taxpayer Impact: Full and open competition maximizes the chances of securing favorable pricing for taxpayers by encouraging a robust bidding environment.

Public Impact

Department of Defense personnel benefit from access to necessary office machinery. Services include the rental of office machinery, supporting daily administrative and operational functions. The contract's geographic impact is likely nationwide, supporting various DoD installations. Workforce implications include ensuring employees have functional equipment to perform their duties efficiently.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the quality of service beyond a general 'OK' status.
The long duration of the contract (over 6 years) could potentially lead to outdated equipment if not managed proactively.
While competition was full and open, specific details on the number of bids received are not provided, limiting a deeper analysis of competitive intensity.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contract utilizes a Firm Fixed Price (FFP) structure, which provides cost certainty for the government.
The contractor, Sharp Electronics Corp., has a long history, implying experience in this market.
The contract status is 'OK', indicating satisfactory performance to date.
The contract was awarded to a well-known manufacturer, potentially ensuring quality and reliability of equipment.

Sector Analysis

This contract falls within the broader office equipment and machinery rental and leasing sector. This sector is characterized by a mix of large manufacturers and specialized leasing companies. Government spending in this area is substantial, supporting the operational needs of various agencies. Comparable spending benchmarks would involve analyzing other federal contracts for similar equipment rentals, which often show significant volume due to agency requirements.

Small Business Impact

The contract was not awarded as a small business set-aside, and the 'sb' field is false. This indicates that the primary awardee was not a small business, or that the contract was not specifically targeted for small business participation. There is no explicit information on subcontracting plans for small businesses within the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Logistics Agency (DLA) contracting officers and program managers. Accountability measures are inherent in the contract terms, particularly the Firm Fixed Price structure. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Schedule contracts for office equipment
Other agency-specific equipment rental agreements
IT equipment leasing contracts

Risk Flags

Long contract duration may lead to equipment obsolescence.
Lack of detailed performance metrics hinders quality assessment.
Limited insight into the number of competitors and bid range.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to SHARP ELECTRONICS CORP. MONTHS 06-17 OF A 48 MONTH CONTRACT

Who is the contractor on this award?

The obligated recipient is SHARP ELECTRONICS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $14.9 million.

What is the period of performance?

Start: 2006-10-01. End: 2013-02-13.

What was the specific range of office machinery rented under this contract?

The provided data indicates the contract covers 'Office Machinery and Equipment Rental and Leasing' under NAICS code 532420. However, the specific types and models of machinery are not detailed in the summary data. Typically, such contracts could encompass a wide array of equipment including copiers, printers, fax machines, shredders, projectors, and potentially specialized office equipment required by various Department of Defense departments. The exact inventory would be detailed in the contract's statement of work and any associated equipment lists or schedules.

How many bids were received for this contract, and what was the range of proposed prices?

The data indicates the contract was awarded under 'FULL AND OPEN COMPETITION' with only one award ('no': 1). While this confirms the competition type, it does not specify the number of bids received or the pricing details of competing offers. Full and open competition suggests multiple vendors were invited to bid, but the exact number of proposals submitted and their respective prices are not publicly available in this summary. This information would typically be found in the contract award justification documentation.

What is the historical spending trend for office machinery rental by the Defense Logistics Agency?

The provided data pertains to a single contract awarded in 2006 and ending in 2013. To analyze historical spending trends for office machinery rental by the DLA, a broader dataset encompassing multiple contracts over several fiscal years would be necessary. This would involve querying databases like FPDS for all contracts under NAICS code 532420 (or similar codes related to equipment rental) awarded to or managed by the DLA. Such an analysis would reveal patterns in spending volume, average contract values, and dominant contractors over time.

How does the performance rating of 'OK' translate into tangible service quality for the end-users?

A performance rating of 'OK' generally signifies that the contractor is meeting the minimum essential requirements of the contract but may not be exceeding expectations. For end-users of office machinery, this could mean that the equipment is generally functional and delivered as specified. However, it might also imply that response times for maintenance or repairs are standard rather than expedited, or that there are occasional minor issues that are resolved without escalating to major problems. It suggests a baseline level of service without significant deficiencies or exceptional performance.

What are the potential risks associated with a Firm Fixed Price contract for equipment rental over a long duration?

For a Firm Fixed Price (FFP) contract, the primary risk for the government is that the price is fixed regardless of the contractor's actual costs. Over a long duration (like this 6+ year contract), the risk shifts more towards the contractor. If costs for Sharp Electronics Corp. increased significantly due to inflation, maintenance challenges, or unforeseen technological obsolescence, their profit margin would shrink, potentially impacting their motivation or ability to provide optimal service. Conversely, if costs decreased, the government would be overpaying. The government's main risk is locking into a price that may become uncompetitive if market conditions change drastically.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Office Machinery and Equipment Rental and Leasing

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Sharp Corporation (UEI: 690536925)

Address: SHARP PLAZA, MAHWAH, NJ, 05

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,917,976

Exercised Options: $14,917,976

Current Obligation: $14,917,976

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SA700702A0008

IDV Type: IDC

Timeline