DoD's $22.5M Logistics and Technical Support Services contract with ADDX CORPORATION shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $22,514,249 ($22.5M)

Contractor: Addx Corporation

Awarding Agency: Department of Defense

Start Date: 2019-09-16

End Date: 2025-03-15

Contract Duration: 2,007 days

Daily Burn Rate: $11.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: LOGISTICS AND TECHNICAL SUPPORT SERVICES

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.5 million to ADDX CORPORATION for work described as: LOGISTICS AND TECHNICAL SUPPORT SERVICES Key points: 1. Value for money appears reasonable given the scope of services, though detailed cost breakdowns are needed for a definitive assessment. 2. Competition was limited, with only one bid received, potentially impacting price discovery and taxpayer value. 3. Risk indicators are moderate, with contract performance history and the nature of cost-plus-fixed-fee pricing requiring close monitoring. 4. Performance context suggests a long-standing need for these services, with a significant duration of 2007 years for the base contract. 5. Sector positioning places this contract within the broader Engineering Services category, supporting critical defense logistics.

Value Assessment

Rating: fair

The contract's value of $22.5 million over its period of performance appears within a reasonable range for complex logistics and technical support services. However, the Cost Plus Fixed Fee (CPFF) pricing structure necessitates careful oversight to ensure costs remain controlled and the fixed fee is justified. Benchmarking against similar DoD contracts for comparable services would provide a clearer picture of value for money, but preliminary assessment suggests it is fair, not exceptional.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while the initial intent was open competition, specific circumstances led to the exclusion of some sources. The fact that only one bid was received is a significant indicator of limited competition. This lack of robust competition can lead to higher prices and reduced innovation as the contractor faces less pressure to optimize costs and performance.

Taxpayer Impact: The limited competition means taxpayers may not be receiving the best possible price for these essential services. Without multiple bids, there's a reduced incentive for the contractor to offer the most cost-effective solutions, potentially leading to overspending.

Public Impact

The Department of Defense benefits from essential logistics and technical support services, ensuring operational readiness. Services delivered likely include supply chain management, maintenance, repair, and technical assistance for military equipment. The geographic impact is primarily within Virginia, where the contract is managed, but supports broader DoD operations. Workforce implications include direct employment by ADDX CORPORATION and potential indirect support roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in suboptimal pricing for taxpayers.
Cost-plus-fixed-fee contracts require diligent oversight to prevent cost overruns.
The long contract duration (2007 years base) could indicate potential for complacency or evolving needs not being met.

Positive Signals

ADDX CORPORATION is providing critical support services to the Department of Defense.
The contract has a defined period of performance, allowing for structured service delivery.
The services are essential for maintaining military readiness and operational effectiveness.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a broad category encompassing firms that provide engineering consulting and services. The defense logistics and technical support market is substantial, driven by the military's need for specialized expertise to maintain complex weapon systems and supply chains. Comparable spending benchmarks in this sector are difficult to pinpoint without more specific service details, but the scale of this contract is significant within the DoD's support services portfolio.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a specific set-aside requirement. However, ADDX CORPORATION may choose to subcontract portions of this work to small businesses as part of their overall business strategy, which could provide opportunities within the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Air Force, a component of the Department of Defense. Accountability measures would include performance reviews, adherence to contract terms, and financial audits, particularly given the Cost Plus Fixed Fee structure. Transparency is generally maintained through contract databases, but detailed performance metrics and cost breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Support Contracts
Air Force Technical Services
Department of Defense Engineering Services
Logistics and Supply Chain Management Services

Risk Flags

Limited competition may lead to higher costs.
CPFF contract type requires robust cost oversight.
Long contract duration could mask inefficiencies or evolving needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.5 million to ADDX CORPORATION. LOGISTICS AND TECHNICAL SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is ADDX 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 $22.5 million.

What is the period of performance?

Start: 2019-09-16. End: 2025-03-15.

What is the specific breakdown of costs and the fixed fee for ADDX CORPORATION under this contract?

The provided data does not include a detailed cost breakdown or the specific fixed fee amount for ADDX CORPORATION. As a Cost Plus Fixed Fee (CPFF) contract, the total price includes the actual allowable costs incurred by the contractor plus a predetermined fixed fee. To assess value for money thoroughly, a detailed breakdown of direct and indirect costs, labor rates, material costs, and the justification for the fixed fee would be necessary. Without this granular data, it's challenging to determine if the fee is commensurate with the risk and effort involved or if costs were managed efficiently.

How does the pricing of this contract compare to similar logistics and technical support services awarded by the DoD?

Benchmarking this contract's pricing against similar logistics and technical support services awarded by the DoD is difficult without access to detailed cost data and specific service scopes. However, the limited competition (one bid) suggests that the pricing might not be as competitive as it could be under a more robust bidding environment. The total award amount of $22.5 million over the contract's life needs to be evaluated in the context of the specific deliverables, service levels, and the complexity of the support provided. A comparative analysis would require identifying contracts with similar performance work statements and contract types.

What are the primary risks associated with a Cost Plus Fixed Fee contract for logistics and technical support?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like this one, revolve around cost control and potential for contractor inefficiency. While the fixed fee incentivizes the contractor to control costs to maximize profit, there's still a risk that costs could escalate beyond initial projections, impacting the overall government expenditure. The government bears the risk of allowable costs, and the contractor is motivated to perform the work within the agreed-upon cost parameters to earn their fixed fee. Effective oversight is crucial to scrutinize incurred costs and ensure they are reasonable, allocable, and allowable.

What is the historical spending pattern for logistics and technical support services by the Department of the Air Force?

The provided data indicates a base contract duration dating back to 2007, suggesting a long-standing relationship for these services. While specific historical spending patterns for this exact contract or category are not detailed, the fact that it has been active for an extended period implies consistent demand and potentially recurring funding. Analyzing broader spending trends within the Department of the Air Force for similar services (e.g., engineering, logistics, technical support) over the past decade would reveal overall budget allocation and potential increases or decreases in investment in this area.

What specific technical capabilities does ADDX CORPORATION bring to this logistics and technical support contract?

The data identifies ADDX CORPORATION as the contractor but does not specify their unique technical capabilities. Given the contract is for 'LOGISTICS AND TECHNICAL SUPPORT SERVICES' and falls under 'Engineering Services,' it can be inferred that ADDX possesses expertise in areas such as supply chain management, maintenance planning, technical documentation, systems integration, and potentially specialized engineering support for defense assets. To understand their specific contributions, one would need to review the contractor's past performance, certifications, and any technical proposals submitted during the bidding process, if available.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4825 MARK CENTER DR STE 300, ALEXANDRIA, VA, 22311

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $31,047,536

Exercised Options: $31,047,536

Current Obligation: $22,514,249

Actual Outlays: $1,445,483

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $211,338,168

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS301

IDV Type: IDC

Timeline