DoD awards $14.1M contract for military postal services in AFCENT AOR, raising value-for-money questions

Contract Overview

Contract Amount: $14,148,185 ($14.1M)

Contractor: Chenega Defense & Aerospace Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-17

End Date: 2026-09-14

Contract Duration: 1,823 days

Daily Burn Rate: $7.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MILITARY POSTAL OPERATIONS SERVICES BEING PROVIDED IN THE AFCENT AOR

Plain-Language Summary

Department of Defense obligated $14.1 million to CHENEGA DEFENSE & AEROSPACE SOLUTIONS, LLC for work described as: MILITARY POSTAL OPERATIONS SERVICES BEING PROVIDED IN THE AFCENT AOR Key points: 1. Contract awarded on a firm-fixed-price basis, providing cost certainty but potentially limiting flexibility. 2. The contract's duration of over 1800 days suggests a long-term need for these services. 3. The absence of a specific Product Service Code (PSC) makes direct benchmarking difficult. 4. The contract was not competed, raising concerns about price discovery and potential overpayment. 5. The contractor, Chenega Defense & Aerospace Solutions, LLC, is a significant player in defense contracting. 6. The geographic scope (AFCENT AOR) implies critical logistical support for military operations.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of a specific PSC and the 'not available for competition' status. The firm-fixed-price structure offers predictability, but without competitive bids, it's difficult to ascertain if the $14.1 million represents a fair market price for 'All Other Business Support Services' in the AFCENT AOR. Further analysis would require comparing this to similar logistical support contracts in comparable operational environments, considering the specific services rendered beyond basic postal operations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'not available for competition' basis, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the requirement, or in situations deemed urgent or critical. The lack of multiple bidders means there was no direct price negotiation through competitive bidding, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for these services as the absence of competition limits the government's ability to secure the lowest possible price through market forces.

Public Impact

Military personnel and operations within the U.S. Central Command (CENTCOM) Air Forces (AFCENT) Area of Responsibility (AOR) benefit from reliable mail delivery. Essential postal and business support services are delivered, ensuring communication channels remain open for deployed forces. The geographic impact is concentrated within the AFCENT AOR, a critical theater for U.S. military operations. The contract supports the logistical backbone for military personnel, indirectly impacting morale and operational efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
The broad 'All Other Business Support Services' category lacks specificity, making performance monitoring difficult.
Long contract duration could mask inefficiencies or changing needs without review.
Geographic concentration in a high-risk AOR presents inherent operational and security challenges.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
The contractor, Chenega Defense & Aerospace Solutions, LLC, likely possesses specialized capabilities for operating in complex environments.
Ensuring reliable mail services is crucial for military morale and operational continuity.

Sector Analysis

This contract falls under the broad 'Business Support Services' sector, specifically related to logistics and administrative functions within a defense context. The market for such services is substantial, driven by the ongoing need for operational support for military deployments worldwide. While specific benchmarks for 'military postal operations' are scarce, general logistics and base support contracts often run into millions of dollars, reflecting the complexity and scale of supporting forces in austere environments.

Small Business Impact

The contract data indicates that small business participation (ss and sb fields) is false, and no subcontracting information (st, sn) is provided. This suggests that the prime contractor, Chenega Defense & Aerospace Solutions, LLC, is not obligated to subcontract with small businesses for this particular award, nor is there an indication of a small business set-aside. This contract does not appear to directly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is limited by the sole-source nature of the award. Inspector General (IG) jurisdiction would apply if specific allegations of fraud, waste, or abuse arise.

Related Government Programs

Military Mail Services
Logistics Support Contracts
Base Operations Support
Defense Support Services
Contingency Operations Support

Risk Flags

Sole-source award lacks competitive pricing.
Broad service category may obscure specific performance metrics.
Geographic concentration in a potentially volatile region.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to CHENEGA DEFENSE & AEROSPACE SOLUTIONS, LLC. MILITARY POSTAL OPERATIONS SERVICES BEING PROVIDED IN THE AFCENT AOR

Who is the contractor on this award?

The obligated recipient is CHENEGA DEFENSE & AEROSPACE SOLUTIONS, LLC.

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 $14.1 million.

What is the period of performance?

Start: 2021-09-17. End: 2026-09-14.

What specific services are included under 'All Other Business Support Services' for military postal operations in the AFCENT AOR?

The provided data classifies this contract under NAICS code 561499 ('All Other Business Support Services'), which is a broad category. For military postal operations in the AFCENT AOR, this likely encompasses a range of activities beyond simple mail sorting and delivery. These could include mail processing, transportation of mail to and from various military installations within the AOR, handling of accountable mail (registered, insured, express), potentially managing mailroom operations at bases, and ensuring compliance with military postal regulations. The exact scope would be detailed in the contract's Performance Work Statement (PWS), which is not publicly available in this data snippet. Without the PWS, it's difficult to precisely define the service deliverables and thus fully assess value.

How does the $14.1 million contract value compare to historical spending on similar military postal services?

Direct historical spending comparisons for this specific service ('military postal operations' within the AFCENT AOR) are difficult to establish with the provided data alone. The contract is classified under a very general NAICS code (561499), and the 'not available for competition' status prevents direct benchmarking against competitively awarded contracts. To perform a robust comparison, one would need to identify previous contracts for similar services in the same or comparable geographic regions, analyze their scope, duration, and total value, and adjust for inflation and changes in operational tempo. The current award's value of $14.1 million over approximately five years ($2.82 million annually) provides a starting point, but its reasonableness hinges on the specific service requirements and market conditions in the AFCENT AOR, which are not fully detailed here.

What are the key risks associated with a sole-source award for essential military support services?

The primary risk of a sole-source award for essential military support services like postal operations is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. Additionally, there's a risk of complacency from the sole provider, potentially leading to service quality issues if oversight is insufficient. Dependence on a single contractor can also create vulnerabilities; if the contractor experiences financial difficulties, operational failures, or decides to exit the contract, replacing them quickly in a complex operational environment like the AFCENT AOR could be challenging and disruptive to military operations.

What is Chenega Defense & Aerospace Solutions, LLC's track record with similar contracts?

Chenega Defense & Aerospace Solutions, LLC is a significant government contractor with a broad portfolio, including defense and aerospace services. While specific details on their performance for 'military postal operations' in the AFCENT AOR are not provided in this data, their extensive experience suggests they possess the capability to manage complex logistical requirements. Publicly available contract databases often show Chenega holding numerous awards across various agencies, including the Department of Defense, for services ranging from base support to security and logistics. A deeper dive into their contract history, including past performance evaluations and any reported issues on similar contracts, would be necessary to fully assess their track record for this specific requirement.

How does the firm-fixed-price (FFP) contract type influence cost control and contractor performance?

A Firm-Fixed-Price (FFP) contract type, as used here, places the maximum risk and responsibility on the contractor for controlling costs and performing the work within the agreed-upon price. This is generally favorable for the government when the scope of work is well-defined and unlikely to change significantly. It provides budget certainty, as the total cost is fixed regardless of the contractor's actual costs. For the contractor, it incentivizes efficiency and cost management. However, if the scope is poorly defined or unforeseen issues arise, the contractor might cut corners to maintain profitability, potentially impacting service quality. In a sole-source situation, the FFP price itself needs careful negotiation and justification.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 360D QUALITY CIR NW STE 400, HUNTSVILLE, AL, 35806

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,652,026

Exercised Options: $14,148,185

Current Obligation: $14,148,185

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Timeline