DoD awards $5.6M contract for shelf stocking, raising questions about value and competition

Contract Overview

Contract Amount: $5,610,430 ($5.6M)

Contractor: W. Harris, Government Services Contractor, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-04-01

End Date: 2026-03-31

Contract Duration: 1,095 days

Daily Burn Rate: $5.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SHELF STOCKING OPERATIONS

Place of Performance

Location: TACOMA, PIERCE County, WASHINGTON, 98433

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $5.6 million to W. HARRIS, GOVERNMENT SERVICES CONTRACTOR, INC. for work described as: SHELF STOCKING OPERATIONS Key points: 1. Contract value appears moderate for the scope of shelf stocking services. 2. Limited competition dynamics may have influenced final pricing. 3. Contract duration of three years suggests a stable, ongoing need. 4. Firm Fixed Price contract type offers cost certainty but limits flexibility. 5. Geographic focus on Washington state indicates localized operational requirements. 6. The 'All Other Support Services' NAICS code is broad, potentially obscuring specific service details.

Value Assessment

Rating: fair

The contract value of $5.6 million over three years for shelf stocking operations is difficult to benchmark without more specific details on the scope of work and the number of facilities covered. However, given the nature of shelf stocking, this amount could represent a reasonable cost if it encompasses a significant number of stores or a high volume of inventory. The firm fixed price structure provides cost predictability for the Defense Commissary Agency. Further analysis would require comparing this to similar contracts for commissary or retail shelf stocking services, considering factors like labor rates and operational complexity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests that while the intent was open competition, certain sources were excluded, leading to a limited pool of bidders. With 8 bidders, the competition level is moderate, but the exclusion of sources warrants scrutiny to ensure fair market access. This limited competition might have resulted in a higher price than if all potential qualified sources had been allowed to bid.

Taxpayer Impact: The exclusion of sources, even if justified, could mean taxpayers did not benefit from the most competitive pricing achievable through a truly open bidding process.

Public Impact

Military families and personnel shopping at commissaries in Washington state will benefit from well-stocked shelves. The contract ensures the efficient replenishment of goods, improving the shopping experience. The services are geographically concentrated within Washington state. The contract supports jobs in the logistics and retail support sector within Washington.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method needs further clarification to ensure no qualified small businesses were unfairly prevented from bidding.
The broad NAICS code 'All Other Support Services' makes it difficult to assess if the contractor possesses specialized expertise relevant to shelf stocking.
Lack of specific performance metrics in the provided data makes it challenging to evaluate the contractor's past performance or potential future effectiveness.

Positive Signals

The contract is a Firm Fixed Price award, which generally indicates a well-defined scope of work and predictable costs for the government.
The award to W. HARRIS, GOVERNMENT SERVICES CONTRACTOR, INC. suggests a potentially established relationship or positive past performance with the government.
The duration of the contract (1095 days) implies a stable and ongoing requirement, suggesting the agency has confidence in the service provider.

Sector Analysis

Shelf stocking operations fall under the broader 'Support Services' sector, specifically within the 'Services to Buildings and Dwellings' or 'Facilities Support Services' categories, often linked to retail operations. The Defense Commissary Agency (DeCA) operates grocery stores for military personnel, making efficient inventory management and stocking crucial. This contract fits within the government's broader efforts to ensure operational readiness and provide essential services to the military community. Comparable spending benchmarks would typically be found in large retail logistics and supply chain management contracts, though government-specific contracts may have unique pricing structures.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary focus for this specific contract award, as neither a small business set-aside nor subcontracting goals were explicitly mentioned. This suggests the contract was likely awarded to a larger entity capable of fulfilling the requirements. The absence of small business considerations could mean missed opportunities to engage smaller, specialized firms in supporting defense commissary operations.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Commissary Agency (DeCA), a component of the Department of Defense. As a firm fixed-price contract, oversight would focus on ensuring the contractor meets the defined scope of work and performance standards. Accountability measures would be tied to contract deliverables and adherence to the schedule. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Commissary Agency Operations
Retail Logistics Support Services
Inventory Management Contracts
Government Facility Support Services

Risk Flags

Limited competition due to source exclusion.
Broad NAICS code may obscure specific expertise requirements.
Lack of publicly available performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.6 million to W. HARRIS, GOVERNMENT SERVICES CONTRACTOR, INC.. SHELF STOCKING OPERATIONS

Who is the contractor on this award?

The obligated recipient is W. HARRIS, GOVERNMENT SERVICES CONTRACTOR, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Commissary Agency).

What is the total obligated amount?

The obligated amount is $5.6 million.

What is the period of performance?

Start: 2023-04-01. End: 2026-03-31.

What specific services are included under 'SHELF STOCKING OPERATIONS' for the Defense Commissary Agency?

The term 'SHELF STOCKING OPERATIONS' typically encompasses the physical placement of goods onto retail shelves, ensuring products are organized, fronted, and available for customers. This can include receiving inventory from backroom storage, rotating stock (e.g., First-In, First-Out), applying price tags or labels, maintaining shelf cleanliness, and potentially reporting stock levels or discrepancies. For the Defense Commissary Agency, these operations are critical for maintaining a positive shopping experience for military personnel and their families, ensuring that essential goods are readily accessible. The exact scope would be detailed in the contract's Performance Work Statement (PWS), which is not provided here but would specify the number of stores, hours of operation, types of products handled, and specific performance standards.

How does the $5.6 million contract value compare to industry benchmarks for similar shelf stocking services?

Benchmarking this $5.6 million contract value is challenging without granular data on the scope of services, geographic coverage, and specific performance requirements. However, in the broader retail industry, shelf stocking can be a significant operational cost. Large retail chains often manage these functions internally or through third-party logistics providers. Costs can vary widely based on labor rates, the volume of SKUs (Stock Keeping Units), store traffic, and the complexity of inventory management systems. For a government contract like this, which serves a specific population and operates under potentially different logistical constraints than commercial retail, direct comparison is difficult. The firm fixed-price nature suggests the government sought cost certainty, but the actual value-for-money depends heavily on the contractor's efficiency and the negotiated price relative to the defined tasks.

What are the implications of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type?

This award type, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicates that the government initially intended to compete the contract broadly but subsequently excluded certain potential offerors. The reasons for exclusion could range from specific technical requirements not met by some firms to administrative or eligibility issues. While it implies a level of competition beyond a sole-source award, the exclusion of sources inherently limits the competitive landscape. This can potentially lead to less aggressive pricing compared to a truly open competition where all qualified vendors could participate. The number of bidders (8) suggests moderate interest, but understanding *why* sources were excluded is crucial for assessing whether the government secured the best possible value and if the exclusion was justified and transparent.

What is the track record of W. HARRIS, GOVERNMENT SERVICES CONTRACTOR, INC. with federal contracts?

W. HARRIS, GOVERNMENT SERVICES CONTRACTOR, INC. has been awarded this $5.6 million contract by the Defense Commissary Agency. To assess their track record, one would need to examine their contract history within federal databases like SAM.gov or FPDS. This would reveal the types of contracts they have previously held, their performance ratings (if available), any past performance issues or awards, and their experience with similar service requirements. Without access to this detailed history, it's difficult to definitively assess their capabilities and reliability for this specific shelf stocking operation. However, securing a multi-year contract suggests they have met certain criteria and demonstrated competence to the awarding agency.

How does this contract fit into the Defense Commissary Agency's overall spending on logistics and support services?

This $5.6 million contract represents a portion of the Defense Commissary Agency's (DeCA) budget allocated for operational support, specifically focusing on the crucial function of shelf stocking. DeCA's overall mission involves providing groceries and household goods to military members and their families worldwide, requiring substantial investment in logistics, supply chain management, and in-store operations. Spending on shelf stocking is directly tied to maintaining store inventory levels and ensuring product availability, which impacts customer satisfaction and the overall effectiveness of the commissary benefit. Analyzing this contract in isolation provides limited insight; it should be viewed within the context of DeCA's total spending on retail operations, warehousing, transportation, and other support services to understand its relative significance and efficiency.

Are there any specific risks associated with a firm fixed-price contract for shelf stocking services?

Firm Fixed Price (FFP) contracts are generally preferred for their cost certainty. However, for services like shelf stocking, there are potential risks. If the scope of work is not precisely defined, the contractor might face unexpected costs, leading to potential disputes or a desire to cut corners on service quality to maintain profitability. Conversely, if the contractor significantly underestimates the effort required, they could incur losses. For the government, the primary risk is that the FFP structure might disincentivize the contractor from going above and beyond basic requirements or from proactively identifying efficiencies, as their profit is fixed. Effective oversight is crucial to ensure the contractor meets all performance standards despite the fixed price.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQC00822R0020

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1081 S STAR RD, STAR, ID, 83669

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

Financial Breakdown

Contract Ceiling: $12,499,359

Exercised Options: $7,978,924

Current Obligation: $5,610,430

Actual Outlays: $676,737

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline