Air Force food services contract awarded to Khotol Services Corporation for over $18M, spanning nearly a decade

Contract Overview

Contract Amount: $18,093,039 ($18.1M)

Contractor: Khotol Services Corporation

Awarding Agency: Department of Defense

Start Date: 2001-09-18

End Date: 2010-03-31

Contract Duration: 3,116 days

Daily Burn Rate: $5.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 17

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200202!000037!5700!AC21 !1 CONS/CC !F4460001C0028 !A!N! !Y!P00001 !20011001!20020930!005165282!005165282!037998499!N!KHOTOL SERVICES CORPORATION !FRONT STREET !GALENA !AK!99741!43912!650!51!LANGLEY AFB !HAMPTON (CITY) !VIRGINIA !+000001193938!N!N!000000000000!R799!OTHER MANAGEMENT SUPPORT SERVICES !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !722310!E! !3!A!S!C! ! !99990909!B! ! !A! !A!U!J!2!017!K! !C!N!Z! ! !Y!A!N!Y!E! ! ! !D!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: HAMPTON, HAMPTON (CITY) County, VIRGINIA, 23665

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $18.1 million to KHOTOL SERVICES CORPORATION for work described as: 200202!000037!5700!AC21 !1 CONS/CC !F4460001C0028 !A!N! !Y!P00001 !20011001!20020930!005165282!005165282!037998499!N!KHOTOL SERVICES CORPORATION !FRONT STREET !GALENA !AK!99741!43912!650!51!LANGLEY AFB !HAMPT… Key points: 1. Contract value appears reasonable given the extended duration and scope of food services. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. Contractor has a track record with the Air Force, indicating prior performance. 4. The contract's duration of over 8 years suggests a need for stable, long-term service provision. 5. Services are categorized under Food Service Contractors, a common requirement for military bases. 6. Geographic location in Virginia may offer insights into regional labor costs and availability.

Value Assessment

Rating: fair

The awarded amount of approximately $18.1 million over a period of 3,116 days (over 8 years) suggests an average annual cost of roughly $2.2 million. Benchmarking this against similar food service contracts for military installations would be necessary for a definitive value assessment. Without specific per-diem or per-meal cost data, it's challenging to compare directly to industry standards or other government contracts. However, the long duration might indicate a competitive bidding process that drove down initial prices, or it could reflect the complexity and scale of services required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, certain sources may have been excluded based on specific criteria or prior arrangements. The number of bids received (17) suggests a healthy level of interest, which typically aids in price discovery and competition. The exclusion of sources, however, warrants further investigation to understand if it limited the competitive landscape unnecessarily.

Taxpayer Impact: A competitive process, even with exclusions, generally benefits taxpayers by encouraging multiple vendors to offer their best pricing. The participation of 17 bidders suggests that the government likely received a range of proposals, increasing the likelihood of a cost-effective award.

Public Impact

Military personnel at Langley Air Force Base benefit from consistent food services. The contract ensures the provision of food services, a critical component of base operations and morale. The primary geographic impact is at Langley Air Force Base in Hampton, Virginia. The contract likely supports local employment opportunities within the food service industry in the Hampton Roads area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'after exclusion of sources' clause requires scrutiny to ensure it did not unduly restrict competition.
Lack of detailed performance metrics in the provided data makes it difficult to assess service quality.
The long contract duration could lead to price escalation if not managed effectively through contract modifications.

Positive Signals

The high number of bidders (17) indicates strong market interest and a competitive environment.
The contract is firm-fixed-price, which shifts performance risk to the contractor.
The contractor, Khotol Services Corporation, has a history of performing government contracts.

Sector Analysis

The food service industry is a significant sector supporting various government operations, particularly within the Department of Defense. This contract falls under the broader category of support services, which are essential for maintaining military readiness and personnel welfare. The market for food services is competitive, with numerous companies specializing in institutional and government catering. Benchmarking this contract's value against other large-scale food service contracts for similar government facilities would provide a clearer picture of its cost-effectiveness.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss=false, sb=false). While there's no direct indication of small business subcontracting requirements from the provided snippet, large prime contracts often include provisions for small business participation. The impact on the small business ecosystem would depend on whether Khotol Services Corporation utilizes small businesses for any part of its service delivery.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver services as specified. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Base Operations Support Services
Food and Hospitality Services
Department of Defense Food Procurement
Air Force Services Contracts

Risk Flags

Potential for cost escalation over long contract duration.
Need to verify rationale for exclusion of sources in competition.
Lack of detailed performance metrics for value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.1 million to KHOTOL SERVICES CORPORATION. 200202!000037!5700!AC21 !1 CONS/CC !F4460001C0028 !A!N! !Y!P00001 !20011001!20020930!005165282!005165282!037998499!N!KHOTOL SERVICES CORPORATION !FRONT STREET !GALENA !AK!99741!43912!650!51!LANGLEY AFB !HAMPTON (CITY) !VIRGINIA !+000001193938!N!N!000000000000!R799!OTHER MANAGEMENT SUPPORT SERVICES !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !722310!E! !3!A!S!C! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is KHOTOL SERVICES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $18.1 million.

What is the period of performance?

Start: 2001-09-18. End: 2010-03-31.

What is the historical spending pattern for food services at Langley Air Force Base?

Analyzing historical spending for food services at Langley Air Force Base prior to this contract award would provide crucial context. This involves examining previous contracts, their values, durations, and the contractors involved. Understanding if spending has increased or decreased over time, and identifying any significant shifts in contract types or scopes, can reveal trends in resource allocation and potential cost efficiencies or escalations. Without this historical data, it's difficult to ascertain if the $18.1 million awarded to Khotol Services Corporation represents a significant deviation from past expenditures or aligns with established budgetary patterns for base support services.

How does the per-meal cost of this contract compare to industry benchmarks for military food services?

To assess the value for money, a comparison of the per-meal cost under this contract against industry benchmarks for military food services is essential. This requires calculating the average per-meal cost by dividing the total contract value by the estimated number of meals served over the contract's duration. Military food service costs can vary significantly based on location, quality of ingredients, and service level. Benchmarking against similar contracts at other Air Force bases or DoD installations would provide a more accurate assessment. If the per-meal cost is significantly higher than comparable contracts or industry averages, it could indicate potential inefficiencies or a lack of competitive pricing.

What specific services are included under 'Other Management Support Services' and 'Food Service Contractors' for this contract?

The provided data lists the primary service as 'Food Service Contractors' with a Product Service Code (PSC) of 722310, and also mentions 'OTHER MANAGEMENT SUPPORT SERVICES' under a different code (R799). Clarifying the exact scope of services is critical. For food services, this typically includes procurement, preparation, and serving of meals, as well as potentially dining facility maintenance and sanitation. The 'Other Management Support Services' designation is broad and could encompass a range of activities such as logistical support, administrative functions, or quality control related to the food services. Understanding the precise deliverables under both categories is necessary to fully evaluate the contract's objectives and performance.

What is the track record of Khotol Services Corporation with similar large-scale food service contracts?

Investigating Khotol Services Corporation's past performance on comparable contracts is vital for assessing risk and reliability. This includes examining their experience with large-scale food service operations, particularly for government or military clients. Key factors to consider are their history of meeting performance standards, managing budgets effectively, and adhering to contract terms. A review of past contract awards, performance evaluations (if available), and any documented issues or disputes would provide insight into their capabilities and potential risks associated with this current award. A strong track record suggests a lower likelihood of performance issues.

What are the potential risks associated with a contract duration of over 8 years?

Contracts spanning over eight years, like this one, carry inherent risks. One primary concern is the potential for cost escalation over time due to inflation, changes in labor costs, or increased material prices, especially if the contract's price adjustment clauses are not robust. There's also a risk that the government's needs may evolve, rendering the original scope of work less relevant or requiring costly modifications. Furthermore, a long duration might disincentivize the contractor from innovating or improving efficiency if they are comfortable with the established terms. Conversely, such long durations can also signal a stable, predictable requirement where long-term planning and investment by the contractor are beneficial.

How did the 'exclusion of sources' in the competition impact the final price and service offerings?

The 'Full and Open Competition After Exclusion of Sources' clause requires a deeper dive. Understanding which sources were excluded and the rationale behind their exclusion is crucial. If legitimate reasons existed (e.g., specific technical capabilities, past performance issues), then the competition might still be considered fair. However, if sources were excluded arbitrarily, it could have artificially limited competition, potentially leading to a higher price than could have been achieved in a truly open market. Analyzing the proposals received and the final negotiated price in light of the excluded sources would help determine if this procurement strategy optimized value for the taxpayer.

Industry Classification

NAICS: Accommodation and Food Services › Special Food Services › Food Service Contractors

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 17

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gana-A' YOO, Limited (UEI: 037998499)

Address: 100 FRONT ST, GALENA, AK, 00

Business Categories: Category Business, HUBZone Firm, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $12,375,337

Exercised Options: $7,914,896

Current Obligation: $18,093,039

Contract Characteristics

Cost or Pricing Data: NO

Timeline