Air Force's $98.5M facilities support contract awarded to Arctec Alaska JV shows limited competition

Contract Overview

Contract Amount: $98,460,177 ($98.5M)

Contractor: Arctec Alaska JV

Awarding Agency: Department of Defense

Start Date: 2014-09-19

End Date: 2017-06-20

Contract Duration: 1,005 days

Daily Burn Rate: $98.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF O&M MAINTENANCE CONTROL&COMM CENTER

Place of Performance

Location: ELMENDORF AFB, ANCHORAGE County, ALASKA, 99506

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $98.5 million to ARCTEC ALASKA JV for work described as: IGF::CT::IGF O&M MAINTENANCE CONTROL&COMM CENTER Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract's duration of 1005 days suggests a long-term need for these services. 3. Facilities support services are critical for maintaining operational readiness. 4. The award to a joint venture may indicate a need for specialized capabilities or capacity. 5. Lack of competition limits opportunities for other businesses and potentially higher value for the government.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the lack of publicly available comparable contract data for similar facilities support services in Alaska. The firm fixed-price structure provides some cost certainty, but without competitive bidding, it's difficult to ascertain if the price reflects the best possible value. The contract's value of approximately $98.5 million over its term suggests a significant investment in maintaining critical infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less price competition and may result in higher costs for the government compared to fully competed contracts.

Taxpayer Impact: The lack of competition means taxpayers did not benefit from the potential cost savings that could arise from a bidding war among multiple qualified contractors. This could translate to a higher overall expenditure for the services rendered.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives essential facilities support services. Services include maintenance, control, and communication center operations, crucial for base functionality. The geographic impact is concentrated in Alaska, supporting military operations in that region. The contract supports jobs within the joint venture and potentially its subcontractors, contributing to the local economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Lack of transparency in the procurement process due to sole-source nature.
Long contract duration without competition could lead to complacency or reduced innovation.
Potential for cost overruns if pricing was not rigorously negotiated without competitive benchmarks.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a joint venture may leverage specialized expertise for critical services.
Contract ensures continuity of essential facilities support operations.

Sector Analysis

Facilities Support Services is a broad category within the services sector, encompassing a wide range of activities necessary for the operation and maintenance of buildings and infrastructure. This contract falls under the North American Industry Classification System (NAICS) code 561210. The federal government is a significant consumer of these services, particularly for military bases and government facilities. Spending in this sector is often driven by the need to maintain aging infrastructure and ensure operational readiness, with contracts ranging from routine maintenance to complex facility management.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The award to Arctec Alaska JV, a joint venture, suggests a focus on larger-scale capabilities. Without explicit small business set-aside provisions or reporting, the direct impact on the small business ecosystem is likely minimal, though the joint venture itself might engage small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Given the firm fixed-price nature, oversight would focus on performance monitoring and ensuring compliance with contract terms. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations if any issues of fraud, waste, or abuse arise. Transparency is limited due to the sole-source award, making public oversight more challenging.

Related Government Programs

Base Operations Support (BOS)
Facilities Engineering
Maintenance, Repair, and Operations (MRO)
Logistics and Support Services

Risk Flags

Sole-source award
Lack of competition
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.5 million to ARCTEC ALASKA JV. IGF::CT::IGF O&M MAINTENANCE CONTROL&COMM CENTER

Who is the contractor on this award?

The obligated recipient is ARCTEC ALASKA JV.

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 $98.5 million.

What is the period of performance?

Start: 2014-09-19. End: 2017-06-20.

What specific services are included under 'Facilities Support Services' for this contract?

The provided data indicates the contract covers 'IGF O&M MAINTENANCE CONTROL & COMM CENTER'. This generally encompasses a range of activities essential for the upkeep and operation of facilities. Specific services likely include routine and preventive maintenance for buildings and grounds, repair of infrastructure (e.g., HVAC, plumbing, electrical systems), operation and maintenance of communication systems, and potentially management of control centers that monitor facility status and security. The exact scope would be detailed in the contract's Statement of Work (SOW), which is not provided here but would define the precise deliverables and performance standards.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract type as 'NOT COMPETED', implying a sole-source justification was made. Common reasons for sole-source awards include situations where only one responsible source can provide the required supplies or services, the award is made under emergency conditions, or it's a follow-on contract to a previously competed award where only the original contractor can provide necessary compatibility or integration. Without further documentation, the specific justification for this sole-source award to Arctec Alaska JV remains unclear, but it suggests the Air Force determined that competitive procedures were not feasible or not in the government's best interest at the time of award.

How does the firm fixed-price (FFP) contract type impact risk and cost for the government?

A Firm Fixed-Price (FFP) contract shifts most of the cost risk from the government to the contractor. The contractor agrees to a set price for the defined scope of work, and is responsible for managing their costs to remain profitable. This provides the government with significant cost certainty, as the final price is not expected to change unless the contract scope is formally modified through a change order. For the government, this reduces the risk of cost overruns compared to cost-reimbursement contracts. However, if the contractor significantly underestimates costs or faces unforeseen challenges, they bear the loss. Conversely, if the contractor is highly efficient, they retain the profit, which can sometimes mean the government pays a premium for this certainty.

What is the significance of Arctec Alaska JV being a joint venture?

The formation of a joint venture (JV) like Arctec Alaska JV typically occurs when two or more companies pool their resources, expertise, and capabilities to undertake a project that might be too large, complex, or specialized for any single entity to handle alone. In the context of federal contracting, JVs can be formed to meet specific requirements, such as possessing unique technical skills, achieving necessary bonding capacity, or fulfilling socio-economic goals (though this contract doesn't appear to be a small business set-aside). For this facilities support contract, the JV structure might indicate a need for combined expertise in areas like construction, engineering, logistics, and communications, potentially offering a more comprehensive solution to the Air Force.

What are the potential implications of a 1005-day contract duration?

A contract duration of 1005 days, approximately 2.75 years, suggests a long-term requirement for the services provided. For facilities support, this duration allows for consistent service delivery, enabling the contractor to develop in-depth knowledge of the facilities and potentially implement efficiencies over time. However, a long duration, especially when combined with a sole-source award, can also reduce flexibility for the government to adapt to changing needs or to re-evaluate pricing and performance through competition. It necessitates robust performance management to ensure continued value throughout the contract term.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA521514R9001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9327 JERSTAD AVE, ANCHORAGE, AK, 99506

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $98,696,510

Exercised Options: $98,460,177

Current Obligation: $98,460,177

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline