Air Force awards $24.5M food service contract to Alabama Department of Rehabilitation Services, a non-traditional vendor

Contract Overview

Contract Amount: $24,533,519 ($24.5M)

Contractor: Alabama Department of Rehabilitation Services

Awarding Agency: Department of Defense

Start Date: 2023-04-01

End Date: 2026-09-30

Contract Duration: 1,278 days

Daily Burn Rate: $19.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: FY23 FULL FOOD SERVICE

Place of Performance

Location: MONTGOMERY, MONTGOMERY County, ALABAMA, 36112

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $24.5 million to ALABAMA DEPARTMENT OF REHABILITATION SERVICES for work described as: FY23 FULL FOOD SERVICE Key points: 1. The contract's value of $24.5 million over its period of performance suggests a significant investment in food services. 2. The award to a state rehabilitation agency indicates a potential non-traditional approach to federal contracting, possibly leveraging existing state infrastructure. 3. The 'NOT COMPETED' status raises questions about the procurement process and potential missed opportunities for broader market engagement. 4. The fixed-price contract with economic price adjustment introduces a degree of cost uncertainty, subject to market fluctuations. 5. The contract's duration of 1278 days (approximately 3.5 years) provides a long-term commitment but also locks in terms for an extended period. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to boost small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the unique nature of the awardee. Typically, food service contracts are awarded to private companies with specialized experience. The $24.5 million total value over approximately 3.5 years averages to about $7 million annually. Without comparable contracts awarded to state rehabilitation agencies for similar services, a direct value-for-money assessment is difficult. The fixed-price with economic price adjustment structure means the final cost could deviate from initial projections.

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. The data indicates 'NOT COMPETED,' suggesting a direct award. This approach bypasses the standard competitive bidding process, which typically involves soliciting proposals from various qualified contractors. The lack of competition means there was no opportunity to compare different pricing structures or service offerings from a range of potential providers.

Taxpayer Impact: Sole-source awards can sometimes lead to higher costs for taxpayers if competitive pressures are not applied to drive down prices. It also limits transparency in the procurement process.

Public Impact

The primary beneficiaries are likely the personnel served by the Air Force base where the food services are provided. The contract delivers essential food services, contributing to the morale and operational readiness of military personnel. The geographic impact is localized to the specific Air Force installation in Alabama, as indicated by the state code 'ST': 'AL'. The contract may have implications for workforce development, potentially creating or sustaining jobs within the Alabama Department of Rehabilitation Services and its affiliated programs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about achieving the best possible price and service quality for taxpayers.
The 'NOT COMPETED' status limits transparency and the ability to verify if alternative, potentially more cost-effective solutions were overlooked.
The fixed-price with economic price adjustment clause introduces potential for cost overruns if market prices for food and labor increase significantly.
Awarding to a state agency, while potentially innovative, may not align with standard industry practices for large-scale food service provision, raising questions about operational efficiency and scalability.
The contract's duration could make it difficult to adapt to changing needs or technological advancements in food service delivery over the next 3.5 years.

Positive Signals

The award to the Alabama Department of Rehabilitation Services could support a valuable state-level mission, potentially aligning federal spending with state social objectives.
Leveraging an existing state agency might streamline administrative overhead compared to contracting with a new, independent commercial entity.
The contract provides a stable, long-term commitment, ensuring consistent food service delivery for the duration.
The fixed-price nature, even with adjustments, provides a baseline cost structure.
The contract is awarded to a specific state (Alabama), potentially benefiting the local economy through employment and resource utilization.

Sector Analysis

The food service industry is a significant sector within the broader services market. Federal agencies, particularly military branches, are substantial consumers of food services, requiring reliable and efficient catering for personnel. This contract falls under the 'Food Service Contractors' (NAICS 722310) category. While typically dominated by large commercial food service providers, this award to a state rehabilitation agency is an outlier. Comparable federal spending in this area is substantial, with numerous contracts awarded annually for base dining, catering, and institutional food supply.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false) and there is no indication of specific subcontracting requirements for small businesses. This suggests that the primary focus of this procurement was not on increasing small business participation. The award to a state agency further implies that the typical subcontracting pathways for small businesses within the commercial food service sector may not be as relevant for this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Department of the Air Force contracting and financial management offices. Given the award to a state agency, there may be additional inter-agency coordination or oversight mechanisms. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's performance or administration.

Related Government Programs

Base Dining Facilities Operations
Military Food Service Contracts
Institutional Food Service Provision
State Agency Service Contracts
Federal Food Procurement

Risk Flags

Sole-source award
Lack of competition
Non-traditional vendor
Potential for cost overruns (FPEPA)
Vendor's core competency mismatch

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.5 million to ALABAMA DEPARTMENT OF REHABILITATION SERVICES. FY23 FULL FOOD SERVICE

Who is the contractor on this award?

The obligated recipient is ALABAMA DEPARTMENT OF REHABILITATION SERVICES.

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 $24.5 million.

What is the period of performance?

Start: 2023-04-01. End: 2026-09-30.

What is the track record of the Alabama Department of Rehabilitation Services in providing large-scale food services to federal agencies?

The Alabama Department of Rehabilitation Services (ADRS) is primarily focused on providing vocational rehabilitation services to individuals with disabilities to help them find employment. Its core mission does not typically involve large-scale food service operations for federal entities. Information regarding ADRS's experience in managing contracts of this magnitude and nature for the Department of Defense or other federal agencies is not readily available through standard federal procurement databases. This suggests that the agency may be leveraging existing internal capabilities or partnering with other entities to fulfill this contract, or that this represents a significant expansion of its service offerings into a new domain.

How does the pricing of this contract compare to similar food service contracts awarded by the Department of Defense?

Direct price comparison is difficult due to the unique nature of the awardee and the sole-source procurement method. Typical food service contracts for military bases are competed among commercial entities, allowing for price benchmarking. The $24.5 million total contract value over approximately 3.5 years equates to an average annual cost of roughly $7 million. Without detailed breakdowns of services, scope, and specific performance metrics, it's challenging to assess if this represents competitive pricing. The 'NOT COMPETED' status inherently limits the ability to determine if a better price could have been achieved through competition.

What are the primary risks associated with awarding a large food service contract on a sole-source basis to a state agency?

The primary risks include potential lack of cost-effectiveness due to the absence of competitive bidding, which could lead to higher prices for taxpayers. There's also a risk related to the vendor's core competency; if food service is not the primary mission of the Alabama Department of Rehabilitation Services, there could be challenges in operational efficiency, quality control, and responsiveness compared to specialized commercial providers. Furthermore, the fixed-price with economic price adjustment structure introduces financial risk if market prices for food and labor escalate unexpectedly. Finally, the 'NOT COMPETED' nature reduces transparency and accountability.

What is the expected effectiveness of this contract in meeting the Air Force's food service needs?

The effectiveness hinges on the Alabama Department of Rehabilitation Services' ability to adapt its operational capacity and management expertise to meet the demands of large-scale food service provision for a federal agency. If the agency has established robust internal processes or effective partnerships to manage such a contract, it could be effective in delivering consistent food services. However, if this venture extends significantly beyond its core mission and established capabilities, there could be risks to service quality, reliability, and timeliness, potentially impacting military personnel morale and readiness.

What are the historical spending patterns for food services by the Department of the Air Force, and how does this contract fit?

The Department of the Air Force historically spends billions of dollars annually on a wide array of services, including food services, to support its global operations and personnel. These contracts are typically awarded through competitive processes to large commercial food service management companies. This specific $24.5 million contract represents a deviation from the norm by being awarded on a sole-source basis to a state rehabilitation agency rather than a commercial entity. While the dollar amount is significant, its non-competitive nature and the awardee's profile make it an anomaly within the broader pattern of Air Force food service procurement.

What are the implications of the 'fixed price with economic price adjustment' (FPEPA) contract type for this food service agreement?

The FPEPA contract type means that the base price is fixed, but it allows for adjustments based on fluctuations in specific economic factors, typically related to labor costs and the cost of goods (in this case, food). For taxpayers, this introduces a degree of uncertainty regarding the final cost. While it protects the contractor from unforeseen market volatility, it shifts some of that risk to the government. The specific economic indicators used for adjustment and the mechanisms for calculating these adjustments are crucial for understanding the potential range of the final contract cost.

Industry Classification

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

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 602 S LAWRENCE ST, MONTGOMERY, AL, 36104

Business Categories: Category Business, Government, U.S. National Government, Not Designated a Small Business, U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $37,060,479

Exercised Options: $29,153,332

Current Obligation: $24,533,519

Actual Outlays: $6,073,151

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline