Federal Aviation Administration awards $10.1M for IT toner, raising questions about value and competition

Contract Overview

Contract Amount: $10,108,972 ($10.1M)

Contractor: Office Depot, Inc.

Awarding Agency: Department of Transportation

Start Date: 2006-08-29

End Date: 2010-08-03

Contract Duration: 1,435 days

Daily Burn Rate: $7.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DTFAWA-06-C-00032 ORDER / MODIFICATION # 0002 SUPPLY ORDER / IT TONER FOR ATO A

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21046

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $10.1 million to OFFICE DEPOT, INC. for work described as: DTFAWA-06-C-00032 ORDER / MODIFICATION # 0002 SUPPLY ORDER / IT TONER FOR ATO A Key points: 1. The contract's value appears high for office supplies, necessitating a closer look at unit pricing and market benchmarks. 2. Full and open competition was utilized, but the number of bidders (3) warrants scrutiny for potential price discovery limitations. 3. The duration of the contract (1435 days) suggests a long-term commitment, increasing the importance of sustained value. 4. The contract is categorized under IT supplies, which may indicate specialized or high-volume needs for toner. 5. The award was made to a single vendor, Office Depot, Inc., highlighting the need to assess their market position and pricing power. 6. Performance context is limited, but the firm-fixed-price structure aims to control costs for the government.

Value Assessment

Rating: questionable

The total award amount of $10.1 million for IT toner over approximately four years appears substantial. Without specific unit pricing or volume data, it is difficult to definitively benchmark this against similar contracts or market rates. However, the sheer scale suggests a significant demand, and a detailed cost analysis of the per-unit price of toner cartridges would be crucial to determine if this represents good value for money. The firm-fixed-price contract type provides cost certainty, but the overall expenditure warrants careful examination of efficiency and potential for savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is generally a positive indicator for achieving competitive pricing. However, with only three bidders participating, the level of competition might not have been as robust as ideal. A higher number of bidders typically leads to more aggressive pricing and better price discovery. The limited number of bidders could suggest barriers to entry, specialized requirements, or a concentrated market for this specific type of IT supply.

Taxpayer Impact: While full and open competition was sought, the limited number of bidders means taxpayers may not have benefited from the most aggressive pricing possible. Further competition could have potentially driven down costs.

Public Impact

The primary beneficiaries are the Federal Aviation Administration (FAA) and its IT infrastructure, ensuring a consistent supply of essential consumables. The services delivered include the provision of IT toner, critical for the operation of printers and other office equipment used by FAA personnel. The geographic impact is likely concentrated within the operational areas of the FAA, potentially across various facilities nationwide. Workforce implications are indirect, focusing on ensuring that administrative and operational staff have the necessary tools to perform their duties without interruption.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment given the high total contract value for office supplies.
Limited competition (3 bidders) may have resulted in suboptimal pricing for taxpayers.
Long contract duration (1435 days) increases risk if market prices for toner decrease significantly.

Positive Signals

Awarded under full and open competition, indicating an attempt to maximize market participation.
Firm-fixed-price contract type provides cost certainty for the government.
The contract is for essential IT supplies, ensuring operational continuity for the FAA.

Sector Analysis

The market for office supplies, including IT consumables like toner, is generally mature and competitive. However, large government contracts can attract significant attention from major suppliers. The National Stock Number (NSN) 453210 for Office Supplies and Stationery Stores indicates a broad category, but the specific nature of 'IT Toner' might imply specialized cartridges for high-volume or specific printer models used by the FAA. Benchmarking against other large federal contracts for similar IT consumables would provide further context on pricing and volume.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities, which are not detailed here. Without specific subcontracting plans or goals, it's difficult to assess the direct benefit to the small business ecosystem from this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Aviation Administration's contracting and procurement offices. The firm-fixed-price nature of the award simplifies some aspects of oversight by focusing on delivery and compliance rather than cost justification. Transparency is generally facilitated by contract databases, but detailed performance metrics and cost breakdowns may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Aviation Administration IT Procurement
General Services Administration (GSA) Schedule Contracts
Office Supplies and Equipment Procurement
Consumables for Government Operations

Risk Flags

High Total Contract Value for Consumables
Limited Number of Bidders in Full and Open Competition
Long Contract Duration Increases Price Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $10.1 million to OFFICE DEPOT, INC.. DTFAWA-06-C-00032 ORDER / MODIFICATION # 0002 SUPPLY ORDER / IT TONER FOR ATO A

Who is the contractor on this award?

The obligated recipient is OFFICE DEPOT, INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $10.1 million.

What is the period of performance?

Start: 2006-08-29. End: 2010-08-03.

What was the specific type and volume of toner procured under this contract, and how does the unit price compare to market rates for similar items?

The provided data identifies the contract as being for 'IT Toner' under National Stock Number 453210 (Office Supplies and Stationery Stores). However, specific details regarding the exact toner models, quantities, and unit prices are not included in the summary. To assess value for money, a detailed analysis comparing the contracted unit prices against prevailing market rates for comparable toner cartridges (considering brand, compatibility, yield, and volume discounts) would be necessary. Given the total award of $10.1 million over approximately four years, understanding the per-unit cost is critical to determining if the FAA achieved competitive pricing or if there is potential for cost savings through renegotiation or alternative procurement strategies.

What is the track record of Office Depot, Inc. in fulfilling large federal contracts, particularly for IT supplies?

Office Depot, Inc. is a major office supply retailer with a significant presence in the federal contracting space. They frequently hold contracts, often through General Services Administration (GSA) schedules, to provide a wide range of office products, including IT consumables like toner. Their track record typically involves fulfilling orders for numerous government agencies across various locations. However, the specific performance history for this particular contract (DTFAWA-06-C-00032) would require examining delivery timeliness, order accuracy, and any reported issues or disputes. Evaluating their performance on similar large-scale IT supply contracts would provide a clearer picture of their reliability and efficiency in meeting government demands.

How does the $10.1 million total award compare to historical spending by the FAA or other agencies on IT toner?

The $10.1 million total award for IT toner represents a substantial investment by the Federal Aviation Administration (FAA) over the contract's duration of approximately four years. To contextualize this spending, it would be beneficial to compare it against historical FAA expenditures on similar IT consumables. Analyzing trends in toner procurement spending over the past 5-10 years could reveal patterns of increasing or decreasing costs, changes in volume, or shifts in procurement strategies. Furthermore, benchmarking this award against similar-sized contracts awarded to other federal agencies for comparable IT toner needs would provide valuable insights into whether the FAA's spending is in line with government-wide averages or if it indicates potentially higher costs or greater demand.

What are the potential risks associated with a firm-fixed-price contract for IT toner lasting over 1400 days?

A firm-fixed-price (FFP) contract for IT toner over a long duration (1435 days) presents several potential risks. Firstly, if the market price for toner decreases significantly during the contract period due to technological advancements or increased competition, the government could be locked into paying a higher price than necessary. Conversely, if unforeseen supply chain disruptions or cost increases occur for the contractor, they might face financial strain, potentially impacting delivery or quality, although the FFP structure is designed to shift this risk to the contractor. Another risk is that the long duration might disincentivize the contractor from offering further cost reductions or efficiency improvements once the contract is secured. Finally, the government loses flexibility to adapt to changing IT needs or to take advantage of potentially better deals if market conditions shift favorably.

Given the 'full and open competition' designation, why were there only three bidders, and what does this imply for future procurements?

While designated as 'full and open competition,' the participation of only three bidders suggests that the market for this specific IT toner requirement may be more concentrated than anticipated, or that certain barriers to entry exist. These barriers could include stringent technical specifications, pre-qualification requirements, the sheer volume of the order, or the geographic scope of delivery. The limited number of bidders implies that the competitive pressure might not have been as intense as in a scenario with numerous participants. For future procurements, the FAA might consider strategies to broaden the bidder pool, such as simplifying requirements where possible, conducting market research more extensively beforehand, or breaking down large requirements into smaller, more accessible contracts to encourage wider participation from both large and small businesses.

Industry Classification

NAICS: Retail Trade › Office Supplies, Stationery, and Gift Stores › Office Supplies and Stationery Stores

Product/Service Code: OFFICE SUPPLIES AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 150 RIVERBEND DR, SAINT ROSE, LA, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Labor Surplus Area Firm, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $1,120,000,000

Exercised Options: $10,108,972

Current Obligation: $10,108,972

Parent Contract

Parent Award PIID: DTFAWA06D00020

IDV Type: IDC

Timeline