DoD's $12.16M contract for professional services awarded to Applied Logistics Services, Inc. shows fair value with 10 bidders

Contract Overview

Contract Amount: $12,160,578 ($12.2M)

Contractor: Applied Logistics Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-08-22

End Date: 2021-05-21

Contract Duration: 2,464 days

Daily Burn Rate: $4.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF:CL:IGF NON-PERSONAL PROFESSIONAL, TECHNICAL AND MANAGEMENT SUPPORT SERVICES IN THE AREAS OF DOCUMENT REVIEW, DATA ENTRY, DATA MAINTENANCE AND DISTRIBUTION, DOCUMENT AND IMAGE PROCESSING, HUMAN RESOURCES SUPPORT, FINANCIAL MANAGEMENT SUPPORT, PROPERTY MANAGEMENT SUPPORT, AND FUNCTIONAL AND ADMINISTRATIVE MANAGEMENT SUPPORT.

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $12.2 million to APPLIED LOGISTICS SERVICES, INC. for work described as: IGF:CL:IGF NON-PERSONAL PROFESSIONAL, TECHNICAL AND MANAGEMENT SUPPORT SERVICES IN THE AREAS OF DOCUMENT REVIEW, DATA ENTRY, DATA MAINTENANCE AND DISTRIBUTION, DOCUMENT AND IMAGE PROCESSING, HUMAN RESOURCES SUPPORT, FINANCIAL MANAGEMENT SUPPORT, PROPERTY MANAGEMENT SUPPORT, AND F… Key points: 1. The contract's value appears reasonable given the scope of professional, technical, and management support services. 2. Full and open competition suggests a healthy market for these types of services, potentially driving competitive pricing. 3. The duration of the contract (2464 days) indicates a long-term need for these support functions. 4. The award was a delivery order under a larger contract, suggesting a phased approach to service acquisition. 5. The contractor, Applied Logistics Services, Inc., has secured a significant award, indicating past performance or competitive strength. 6. The services encompass a broad range of administrative and financial support, crucial for operational efficiency.

Value Assessment

Rating: good

The contract's total value of $12.16 million over approximately 6.7 years suggests a moderate annual spend. Benchmarking against similar professional, technical, and management support contracts is challenging without more specific service details. However, the presence of 10 bidders in a full and open competition implies that the pricing was likely competitive and reflects market rates for the services procured. The cost-plus-fixed-fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can be effective for services where the scope is well-defined but costs may vary.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The fact that 10 bids were received suggests a robust level of competition for this requirement. A higher number of bidders generally leads to better price discovery and can result in more favorable terms for the government. This level of competition mitigates concerns about potential price gouging or lack of innovation from a single provider.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is expected to drive down costs and ensure the government receives the best value for its investment in these essential support services.

Public Impact

The Department of the Navy benefits from essential administrative, financial, and technical support services, enhancing operational efficiency. The contract supports various functions including document review, data entry, human resources, and financial management. The geographic impact is primarily within Indiana, where the contractor is located, but the services likely support broader Navy operations. The contract supports the workforce by providing employment opportunities within Applied Logistics Services, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus-fixed-fee (CPFF) contract type can incentivize contractors to incur higher costs if not carefully managed, as the fee is fixed regardless of actual costs.
The broad scope of services could lead to potential cost overruns if not meticulously tracked and managed.
Long contract durations can sometimes lead to complacency or reduced focus on efficiency over time if not actively overseen.

Positive Signals

Full and open competition with 10 bidders indicates a healthy market and likely competitive pricing.
The delivery order structure suggests a well-planned acquisition strategy for phased service delivery.
The contractor's ability to secure this award suggests a track record of performance or competitive advantage.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically engineering services (NAICS 541330). This sector is characterized by a wide range of specialized expertise applied to government and commercial needs. The market size for such services is substantial, with significant government spending allocated annually. This contract represents a portion of the Department of Defense's broader spending on support services to maintain operational readiness and administrative functions.

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 specifically mandated for small businesses through a set-aside program. However, the prime contractor, Applied Logistics Services, Inc., may still engage small businesses as subcontractors to fulfill portions of the contract requirements, depending on their own business practices and the specific needs of the services rendered.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. The cost-plus-fixed-fee structure necessitates diligent oversight to ensure costs are reasonable and allocable to the contract. Transparency is facilitated through contract reporting requirements. While specific Inspector General (IG) jurisdiction isn't detailed here, the DoD IG generally has oversight over DoD contracts to detect and prevent fraud, waste, and abuse.

Related Government Programs

Professional and Management Support Services
Technical Support Services
Administrative Support Services
Financial Management Support
Document Processing Services

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
Broad service scope may present challenges in precise cost estimation and control.
Long contract duration necessitates ongoing performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.2 million to APPLIED LOGISTICS SERVICES, INC.. IGF:CL:IGF NON-PERSONAL PROFESSIONAL, TECHNICAL AND MANAGEMENT SUPPORT SERVICES IN THE AREAS OF DOCUMENT REVIEW, DATA ENTRY, DATA MAINTENANCE AND DISTRIBUTION, DOCUMENT AND IMAGE PROCESSING, HUMAN RESOURCES SUPPORT, FINANCIAL MANAGEMENT SUPPORT, PROPERTY MANAGEMENT SUPPORT, AND FUNCTIONAL AND ADMINISTRATIVE MANAGEMENT SUPPORT.

Who is the contractor on this award?

The obligated recipient is APPLIED LOGISTICS SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $12.2 million.

What is the period of performance?

Start: 2014-08-22. End: 2021-05-21.

What is the track record of Applied Logistics Services, Inc. in performing similar government contracts?

Information regarding the specific track record of Applied Logistics Services, Inc. on similar government contracts is not detailed in the provided data. However, securing a $12.16 million contract with the Department of the Navy, especially under full and open competition, suggests a level of capability and past performance that met the government's requirements. To fully assess their track record, one would typically review past performance evaluations, contract histories, and any reported issues or successes on previous awards. The fact that this contract was awarded as a delivery order implies it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, which often requires demonstrated past performance for eligibility.

How does the value of this contract compare to similar professional and technical support services procured by the Department of the Navy?

The total contract value of $12.16 million over approximately 6.7 years equates to an average annual spend of roughly $1.8 million. This figure is moderate for professional, technical, and management support services within a large organization like the Department of the Navy. Without specific details on the exact services rendered and their complexity, a precise comparison is difficult. However, given the broad scope (document review, data entry, HR, financial management, etc.) and the competitive nature of the award (10 bidders), this value appears to be within a reasonable range. Larger, more complex, or highly specialized support contracts within the DoD can easily reach tens or hundreds of millions of dollars.

What are the primary risks associated with this type of cost-plus-fixed-fee contract for professional services?

The primary risk with a Cost-Plus-Fixed-Fee (CPFF) contract is the potential for cost overruns. While the contractor's profit (the 'fee') is fixed, they are reimbursed for allowable costs incurred. If costs escalate beyond initial estimates due to inefficiencies, scope creep, or poor management, the government bears the burden of these increased costs. This necessitates robust government oversight to monitor expenditures, ensure costs are reasonable and allocable, and manage the scope of work effectively. Another risk is that the fixed fee might not adequately incentivize the contractor to control costs if they anticipate higher expenses, although the competitive nature of the award can mitigate this.

How effective is the competition level in ensuring value for money for this specific contract?

The competition level for this contract appears to be a significant factor in ensuring value for money. With 10 bidders participating in a full and open competition, the Department of the Navy likely received a range of proposals and pricing structures. This level of competition generally drives down prices as contractors vie for the award. It also encourages contractors to offer competitive terms and demonstrate their ability to deliver high-quality services efficiently. The government's ability to select the best value proposal among multiple strong contenders suggests that the competitive process was effective in achieving favorable terms and pricing for the taxpayer.

What are the historical spending patterns for similar professional, technical, and management support services by the Department of the Navy?

Historical spending patterns for similar services by the Department of the Navy are extensive and varied. The Navy, like other branches of the military, relies heavily on contractors for a wide array of professional, technical, and management support. This includes functions ranging from IT support and cybersecurity to logistics, engineering, administrative tasks, and specialized consulting. Annual spending in these categories often runs into billions of dollars across the entire Department of Defense. Contracts like this one, valued at over $12 million, represent a typical component of this broader spending, reflecting the ongoing need for external expertise to supplement military and civilian personnel.

What are the implications of the contract duration (2464 days) on performance and cost-effectiveness?

A contract duration of 2464 days (approximately 6.7 years) indicates a long-term requirement for the services provided. This extended period can offer stability and predictability for both the government and the contractor, potentially leading to greater efficiency and reduced turnover costs associated with frequent contract transitions. For the government, it allows for the development of deeper expertise and relationships with the contractor. However, long durations also carry risks, such as potential complacency, reduced incentive for innovation, and the possibility of the contractor's costs becoming uncompetitive over time if market rates decrease. Effective contract management, performance reviews, and potential price adjustments are crucial to mitigate these risks.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002414R3206

Offers Received: 10

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 618 W ELNORA ST, ODON, IN, 47562

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $18,231,249

Exercised Options: $16,900,977

Current Obligation: $12,160,578

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D7616

IDV Type: IDC

Timeline