DoD's $7.5M Shelf Stocking Contract Awarded to Communication Methods, LLC Amidst 5 Bidders

Contract Overview

Contract Amount: $7,504,818 ($7.5M)

Contractor: Communication Methods, LLC

Awarding Agency: Department of Defense

Start Date: 2024-02-01

End Date: 2027-01-31

Contract Duration: 1,095 days

Daily Burn Rate: $6.9K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SHELF STOCKING OPERATIONS

Place of Performance

Location: TRENTON, BURLINGTON County, NEW JERSEY, 08641

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $7.5 million to COMMUNICATION METHODS, LLC for work described as: SHELF STOCKING OPERATIONS Key points: 1. Value appears reasonable given the scope of shelf stocking operations. 2. Competition was robust with 5 bidders, suggesting fair price discovery. 3. Contract type is Firm Fixed Price, transferring risk to the contractor. 4. Performance period of 3 years provides stability for operations. 5. The contract falls under 'All Other Support Services' within the Defense sector. 6. Small business set-aside was not utilized for this procurement.

Value Assessment

Rating: good

The contract's value of $7.5 million over three years for shelf stocking operations seems aligned with industry standards for similar support services. While specific per-unit cost benchmarks are not readily available without more granular data, the firm-fixed-price structure incentivizes contractor efficiency. The presence of multiple bidders further supports the notion that the pricing is competitive and reflects a fair market value for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under Simplified Acquisition Procedures (SAP), indicating a full and open competition process suitable for its value range. Five bids were received, demonstrating a healthy level of interest and competition among potential providers. This level of competition is generally positive for price discovery and ensures that the government receives competitive offers.

Taxpayer Impact: The robust competition suggests that taxpayer dollars are being used efficiently, as multiple companies vied to provide the service at the best possible price.

Public Impact

Military personnel and their families benefit from well-stocked commissaries. Ensures availability of essential goods and groceries on military bases. Operations are geographically focused in New Jersey. Supports logistics and supply chain functions within the Defense Commissary Agency. Indirectly supports the morale and readiness of service members.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overstocking or understocking if contractor performance is suboptimal.
Reliance on contractor for critical supply chain support.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Defined performance period of 3 years allows for consistent service.
Multiple bidders indicate a competitive market for these services.

Sector Analysis

The Defense Commissary Agency (DeCA) operates grocery stores on military installations worldwide, providing goods to service members and their families. Shelf stocking is a critical operational function for these stores, ensuring product availability and customer satisfaction. This contract, valued at approximately $7.5 million over three years, fits within the broader context of logistics and retail support services for the defense sector. Comparable spending benchmarks for similar retail support services within the federal government or private sector would provide further context, but the multi-bidder competition suggests market alignment.

Small Business Impact

This contract was not set aside for small businesses, nor is there an indication of significant subcontracting opportunities for small businesses based on the provided data. The procurement utilized Simplified Acquisition Procedures, which can sometimes include small business considerations, but in this instance, it appears larger or non-small businesses were the primary participants. Further analysis of the awarded contractor's size and subcontracting plan would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

The contract is managed by the Defense Commissary Agency (DeCA), a component of the Department of Defense. Oversight likely involves performance monitoring against contract terms and service level agreements. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Transparency is facilitated through contract award databases like FPDS.

Related Government Programs

Defense Commissary Agency Operations
Military Retail Support Services
Logistics and Supply Chain Management (DoD)
Federal Retail Operations

Risk Flags

Potential for performance issues impacting stock availability.
Reliance on contractor for essential commissary operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.5 million to COMMUNICATION METHODS, LLC. SHELF STOCKING OPERATIONS

Who is the contractor on this award?

The obligated recipient is COMMUNICATION METHODS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $7.5 million.

What is the period of performance?

Start: 2024-02-01. End: 2027-01-31.

What is the track record of Communication Methods, LLC in performing similar shelf stocking or logistics support contracts for the federal government?

A review of federal procurement databases would be necessary to ascertain the track record of Communication Methods, LLC. Specifically, searching for past performance information on contracts with the Defense Commissary Agency (DeCA) or other Department of Defense (DoD) entities for similar services like inventory management, warehousing, or retail support would provide insight. Examining past performance evaluations, any reported disputes, or contract modifications could reveal their reliability and effectiveness in fulfilling government obligations. Without this specific data, it's difficult to definitively assess their past performance.

How does the awarded price of $7.5 million compare to similar shelf stocking contracts awarded by DeCA or other federal agencies?

Benchmarking this $7.5 million contract requires comparing it to similar shelf stocking or retail support services contracts awarded by DeCA or other federal agencies, ideally within the same geographic region or with similar operational scopes. Factors such as the number of stores supported, square footage of stocking areas, frequency of stocking, and specific service requirements (e.g., inventory management, planogram execution) would need to be considered for a fair comparison. The fact that this contract was competed under SAP with 5 bidders suggests a competitive market, which typically drives pricing towards fair market value. However, a detailed analysis of contract line item pricing and service levels against comparable contracts is needed for a definitive value assessment.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks for this shelf stocking contract include potential contractor underperformance leading to stockouts or overstocking, which impacts customer satisfaction and inventory costs. There's also a risk related to supply chain disruptions affecting the contractor's ability to perform. Mitigation strategies likely include the Firm Fixed Price (FFP) contract type, which places cost overrun risk on the contractor. Performance standards and service level agreements within the contract, coupled with regular monitoring by DeCA, are crucial for ensuring quality and timely execution. The 3-year duration allows for consistent operations but also necessitates robust oversight throughout the period.

How effective is the competition level (5 bidders) in ensuring optimal price and service for this contract?

A competition level of five bidders for this contract, competed under Simplified Acquisition Procedures (SAP), is generally considered robust and indicative of a healthy market for shelf stocking services. This level of competition typically drives down prices as contractors vie for the award, leading to better value for the government. It also provides the agency with a range of options and technical approaches. The effectiveness in ensuring optimal price and service is further dependent on the clarity of the solicitation requirements and the evaluation criteria used. A well-defined solicitation and a thorough evaluation process will maximize the benefits derived from this competitive environment.

What is the historical spending pattern for shelf stocking operations by the Defense Commissary Agency?

Analyzing historical spending patterns for shelf stocking operations by the Defense Commissary Agency (DeCA) would involve reviewing procurement data over several fiscal years. This would reveal trends in contract values, the number and types of contracts awarded, and the primary contractors utilized. Understanding this history can help contextualize the current $7.5 million award, indicating whether it represents an increase, decrease, or stable level of spending for these services. It can also highlight shifts in procurement strategies, such as changes in competition levels or contract types over time. Such analysis is crucial for long-term budget planning and identifying potential efficiencies.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: HQC00823R0006

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5817 CITRUS BLVD STE F, NEW ORLEANS, LA, 70123

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $19,767,257

Exercised Options: $13,161,281

Current Obligation: $7,504,818

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline