Department of Energy's $12.7M administrative services contract with DELTHA CORPORATION shows potential value concerns
Contract Overview
Contract Amount: $12,718,048 ($12.7M)
Contractor: Deltha Corporation
Awarding Agency: Department of Energy
Start Date: 2001-10-15
End Date: 2006-10-31
Contract Duration: 1,842 days
Daily Burn Rate: $6.9K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 6
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Place of Performance
Location: NEW ORLEANS, JEFFERSON County, LOUISIANA, 70123
Plain-Language Summary
Department of Energy obligated $12.7 million to DELTHA CORPORATION for work described as: Key points: 1. The contract's cost-plus award fee structure may incentivize spending over efficiency. 2. Limited competition raises questions about price discovery and potential overpayment. 3. The long duration of the contract (over 5 years) warrants scrutiny of ongoing performance. 4. Performance was rated 'Satisfactory', suggesting a baseline level of service delivery. 5. The contract's focus on administrative services is a common but critical function for agencies. 6. Lack of specific performance metrics makes objective value assessment challenging.
Value Assessment
Rating: fair
The contract's cost-plus award fee (CPAF) structure, while allowing flexibility, can lead to higher costs compared to fixed-price contracts if not tightly managed. Benchmarking against similar administrative services contracts is difficult without detailed performance data and specific service breakdowns. The total award value of $12.7 million over its lifespan suggests a significant investment, and without clear performance against cost, it's challenging to definitively assess value for money. The 'Satisfactory' performance rating indicates the contractor met basic requirements, but doesn't necessarily imply exceptional value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This significantly limits the opportunity for price discovery and competitive pressure that could drive down costs. While sole-source awards are sometimes justified for specific circumstances, the lack of competition here raises concerns about whether the government obtained the best possible pricing and service.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as DELTHA CORPORATION was the only provider considered.
Public Impact
The Department of Energy benefits from essential administrative support services, ensuring operational continuity. Office administrative services are delivered, likely supporting various departmental functions and personnel. The contract's geographic impact is centered in Louisiana, where the services were likely performed. Workforce implications include employment opportunities for individuals performing administrative tasks under DELTHA CORPORATION.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost-plus award fee structure can incentivize higher spending.
- Lack of detailed performance metrics hinders objective value assessment.
- Long contract duration requires sustained oversight to ensure continued value.
Positive Signals
- Contractor performance was rated 'Satisfactory'.
- Administrative services are critical for agency operations.
- The contract has a defined period of performance.
Sector Analysis
Administrative support services are a ubiquitous component of federal agency operations, encompassing a wide range of functions from general office management to specialized clerical support. The market for these services is broad, with numerous companies capable of providing them. Federal spending in this category is substantial, often awarded through various contract types. This specific contract, valued at $12.7 million, falls within a typical range for such services over a multi-year period, though its sole-source nature distinguishes it from more competitively bid contracts.
Small Business Impact
This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The award to DELTHA CORPORATION, without specific set-aside provisions, suggests that the primary focus was on fulfilling the administrative service requirement rather than promoting small business participation. Further analysis would be needed to determine if any subcontracting plans were in place.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Energy's contracting officers and program managers. The 'Satisfactory' performance rating suggests some level of monitoring occurred. However, the lack of detailed performance metrics and the sole-source nature of the award mean that robust oversight is crucial to ensure accountability and prevent potential cost overruns or inefficiencies. Transparency regarding the justification for the sole-source award and the specific metrics used for the award fee would enhance accountability.
Related Government Programs
- General Services Administration (GSA) Schedules for Administrative Services
- Department of Defense Administrative Support Contracts
- Office of Management and Budget (OMB) Guidance on Service Contracts
Risk Flags
- Sole-source award limits competition.
- Cost-plus award fee structure may lead to higher costs.
- Lack of detailed performance metrics.
- Long contract duration requires sustained oversight.
Tags
administrative-services, department-of-energy, louisiana, cost-plus-award-fee, sole-source, deltha-corporation, office-administrative-services, satisfactory-performance, federal-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $12.7 million to DELTHA CORPORATION. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is DELTHA CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $12.7 million.
What is the period of performance?
Start: 2001-10-15. End: 2006-10-31.
What specific administrative services were provided under this contract, and how were they measured?
The provided data indicates the contract was for 'Office Administrative Services' (NAICS code 561110). However, it does not detail the specific services rendered or the metrics used to evaluate performance and determine award fees. Typically, such services could include tasks like record keeping, mail processing, scheduling, general clerical support, and data entry. The 'Satisfactory' performance rating suggests that DELTHA CORPORATION met the basic requirements outlined in the contract's statement of work. Without access to the contract's statement of work and performance reports, it is impossible to ascertain the precise services delivered or the specific criteria that led to the 'Satisfactory' rating and any associated award fees.
What was the justification for awarding this contract on a sole-source basis?
The data explicitly states the contract type as 'NOT AVAILABLE FOR COMPETITION', which is synonymous with a sole-source award. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source is available or capable of providing the required services, or in cases of urgent need. For a contract of this nature and duration, the justification would likely stem from a determination that DELTHA CORPORATION possessed unique capabilities, existing infrastructure, or specialized knowledge essential for the Department of Energy's administrative functions that could not be readily replicated by other vendors in a competitive bidding process. A formal Justification for Other than Full and Open Competition (JOFOC) would typically be required and documented.
How does the 'Satisfactory' performance rating compare to other administrative services contracts within the Department of Energy?
The 'Satisfactory' performance rating indicates that DELTHA CORPORATION met the minimum requirements of the contract. In the context of federal contracting, 'Satisfactory' is a common rating that signifies acceptable performance but does not imply exceptional or outstanding service. Without access to the performance evaluations of other similar administrative services contracts within the Department of Energy, it is difficult to provide a direct comparative analysis. However, a consistent pattern of 'Satisfactory' ratings across multiple contracts might suggest a baseline standard for such services, while a prevalence of higher ratings ('Outstanding') could indicate more competitive or higher-performing contracts. The 'Satisfactory' rating here, especially in conjunction with a sole-source award, warrants closer examination of whether the government received optimal value.
What were the key cost drivers for this $12.7 million contract, and how were they managed under the Cost Plus Award Fee structure?
The provided data does not detail the cost drivers for this $12.7 million contract. However, for a Cost Plus Award Fee (CPAF) contract, cost drivers typically include direct labor (salaries, benefits), indirect costs (overhead, administrative expenses), materials, and other direct costs incurred in performing the services. The 'Award Fee' component means that the contractor could earn additional profit based on meeting or exceeding certain performance objectives. Management of cost drivers under CPAF involves the government establishing clear performance criteria and monitoring the contractor's spending against an estimated cost. The contracting officer would evaluate the contractor's performance against these criteria to determine the award fee amount, theoretically incentivizing efficient performance. However, the effectiveness of this management depends heavily on the clarity of the criteria and the rigor of the government's oversight.
What is the historical spending pattern for administrative services by the Department of Energy, and how does this contract compare?
The provided data only pertains to this single contract awarded to DELTHA CORPORATION. It does not offer historical spending patterns for administrative services within the Department of Energy (DOE). To establish a historical context, one would need to analyze aggregate DOE spending on similar services (e.g., using NAICS code 561110 or related service categories) over multiple fiscal years. This would involve examining trends in contract values, number of contracts awarded, types of contract vehicles used (e.g., competitive vs. sole-source), and average contract durations. Without this broader dataset, it's impossible to definitively state how this $12.7 million, sole-source, CPAF contract compares to the DOE's overall historical approach to procuring administrative support.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Office Administrative Services › Office Administrative Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Offers Received: 6
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Address: 6600 PLAZA DR STE 306, NEW ORLEANS, LA, 02
Business Categories: 8(a) Program Participant, Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $12,718,048
Exercised Options: $12,718,048
Current Obligation: $12,718,048
Timeline
Start Date: 2001-10-15
Current End Date: 2006-10-31
Potential End Date: 2006-10-31 00:00:00
Last Modified: 2012-05-16
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