DHS awarded $25M for hurricane response logistics, exceeding initial estimates by $3.4M

Contract Overview

Contract Amount: $24,977,214 ($25.0M)

Contractor: Estes Express Lines

Awarding Agency: Department of Homeland Security

Start Date: 2017-09-06

End Date: 2017-12-31

Contract Duration: 116 days

Daily Burn Rate: $215.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF THE CONTRACTOR SHALL PROVIDE CROSS DOCK OPERATIONS FOR THE INSTALLATION SUPPORT BASE (ISB)(LOCATION TBD) FOR SHUTTLE FLEET SERVICES, DEAD HEAD POWER POSITIONING, TRAVEL, LODGING, AND OPERATIONAL SUPPORT IN RESPONSE TO HURRICANE ERMA.

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341

State: Georgia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $25.0 million to ESTES EXPRESS LINES for work described as: IGF::CL::IGF THE CONTRACTOR SHALL PROVIDE CROSS DOCK OPERATIONS FOR THE INSTALLATION SUPPORT BASE (ISB)(LOCATION TBD) FOR SHUTTLE FLEET SERVICES, DEAD HEAD POWER POSITIONING, TRAVEL, LODGING, AND OPERATIONAL SUPPORT IN RESPONSE TO HURRICANE ERMA. Key points: 1. Contract value significantly exceeded the initial estimate, suggesting potential overspending or unforeseen complexities. 2. The award was made under full and open competition, indicating a broad market search. 3. The short performance period (approx. 4 months) was driven by an emergency response need. 4. The contractor, Estes Express Lines, has a history of providing transportation and logistics services. 5. The contract's focus on cross-dock operations and shuttle fleet support highlights critical infrastructure resilience needs. 6. The geographic scope was limited to a location TBD within Georgia, indicating a focused operational area.

Value Assessment

Rating: fair

The contract's final value of $24,977,214.20 significantly surpassed the initial estimate of $21,532,100, an increase of over 16%. While emergency response contracts can incur higher costs due to urgency and unpredictable needs, this substantial deviation warrants scrutiny. Benchmarking against similar disaster relief logistics contracts is challenging due to the specific nature of the services and the immediate, crisis-driven demand. However, the significant cost overrun suggests that either the initial cost estimation was flawed or the operational requirements evolved substantially during the response.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, meaning all responsible sources were permitted to submit a bid. The data indicates there were 3 bids received. While full and open competition is generally preferred for ensuring fair pricing and access to the best value, the limited number of bids (3) for a contract of this magnitude could suggest potential barriers to entry or a specialized market. Further analysis would be needed to determine if the competition level was sufficient to drive optimal price discovery.

Taxpayer Impact: The use of full and open competition is positive for taxpayers as it aims to leverage market forces to secure the best possible price. However, with only three bids, there's a risk that the competitive pressure might not have been as intense as in a more crowded field, potentially leading to a higher-than-optimal price.

Public Impact

Beneficiaries include residents and businesses impacted by Hurricane Irma, through the restoration of essential services. Services delivered include critical cross-dock operations, shuttle fleet support, and logistical coordination for disaster relief. The geographic impact was focused on a specific installation support base within Georgia. Workforce implications include the mobilization of logistics personnel and support staff for emergency operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost overrun compared to initial estimates.
Limited number of bids received despite full and open competition.
Urgency of the award may have limited thorough vetting of all potential bidders.
Specific location 'TBD' adds complexity to initial planning and cost estimation.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Contractor has experience in transportation and logistics.
Focus on critical hurricane response demonstrates support for disaster relief efforts.
Clear performance period tied to immediate post-hurricane needs.

Sector Analysis

This contract falls within the broader transportation and logistics sector, specifically focusing on support activities for road transportation during emergency events. The market for disaster response logistics is specialized, often requiring rapid deployment capabilities and experience with government contracting. While specific market size data for emergency cross-docking is not readily available, the federal government frequently procures such services, particularly during hurricane seasons. Comparable spending benchmarks are difficult to establish due to the unique, time-sensitive nature of disaster relief.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). While the primary contractor, Estes Express Lines, is a large business, there is no explicit information on subcontracting plans with small businesses. The impact on the small business ecosystem is therefore unclear; however, large prime contracts often include subcontracting opportunities, which could benefit small businesses if actively pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security (DHS) and the Federal Emergency Management Agency (FEMA). As a delivery order under a larger contract vehicle (implied by 'aw': 'DELIVERY ORDER'), oversight mechanisms would likely be tied to the parent contract's terms. Transparency is facilitated by the contract award notice, but detailed operational oversight reports are not publicly available. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Hurricane Response Logistics
Disaster Relief Support Services
Transportation and Logistics Services
Emergency Preparedness and Response Contracts

Risk Flags

Cost Overrun
Limited Competition Bids
Emergency Procurement Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $25.0 million to ESTES EXPRESS LINES. IGF::CL::IGF THE CONTRACTOR SHALL PROVIDE CROSS DOCK OPERATIONS FOR THE INSTALLATION SUPPORT BASE (ISB)(LOCATION TBD) FOR SHUTTLE FLEET SERVICES, DEAD HEAD POWER POSITIONING, TRAVEL, LODGING, AND OPERATIONAL SUPPORT IN RESPONSE TO HURRICANE ERMA.

Who is the contractor on this award?

The obligated recipient is ESTES EXPRESS LINES.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $25.0 million.

What is the period of performance?

Start: 2017-09-06. End: 2017-12-31.

What is the track record of Estes Express Lines with federal contracts, particularly in emergency response?

Estes Express Lines has a significant history of federal contracting, primarily in the transportation and logistics domain. While this specific contract was for emergency response related to Hurricane Irma, the company's core business involves freight transportation, warehousing, and logistics solutions. Federal procurement data indicates numerous awards to Estes Express Lines for various shipping and delivery services across different agencies. Their experience likely includes managing complex supply chains and meeting delivery deadlines, which are transferable skills to emergency response scenarios. However, detailed performance reviews or specific emergency response contract successes are not readily available in the public domain without deeper investigation into individual contract performance reports.

How does the final contract value compare to the initial estimate and what factors contributed to the difference?

The final contract value of $24,977,214.20 was approximately 16.5% higher than the initial estimate of $21,532,100. This $3.4 million difference suggests that the initial cost estimation may have been conservative or that unforeseen operational requirements and costs emerged during the hurricane response. Factors contributing to such increases in emergency contracts often include the need for expedited services, increased fuel costs due to urgent travel, unexpected logistical challenges on the ground, and the dynamic nature of disaster relief operations where needs can rapidly change. Without detailed post-award reports or justifications from FEMA, the precise reasons for the cost increase remain speculative but are common in crisis-driven procurements.

What are the potential risks associated with awarding a contract of this nature under urgent, post-disaster conditions?

Awarding contracts under urgent, post-disaster conditions presents several risks. Firstly, the urgency can compromise the thoroughness of the competition process, potentially limiting the number of bidders or reducing the time available for due diligence on contractor capabilities and pricing. Secondly, cost estimation is inherently difficult in a chaotic environment, leading to significant price variances, as seen in this case. Thirdly, oversight can be challenging when resources are strained and focused on immediate relief efforts, increasing the risk of performance issues or improper payments. Finally, the rapid mobilization required may lead to less experienced personnel being deployed or shortcuts being taken in operational procedures, impacting service quality and safety.

How effective was the competition process given the limited number of bids for this significant contract?

The competition process, while conducted under 'full and open' guidelines, resulted in only three bids. This limited number of bidders for a contract valued at nearly $25 million raises questions about the effectiveness of the competition in driving the best possible price and value. Factors contributing to a low bid count could include the specialized nature of the services required, the short notice period typical of emergency response, or the geographic limitations. While three bids are more than a sole-source award, it may not represent the full competitive pressure achievable in a less time-constrained or more broadly defined procurement. Therefore, the effectiveness in terms of price discovery is questionable, despite adhering to the 'full and open' mandate.

What does the contract's focus on 'cross dock operations' and 'dead head power positioning' signify for disaster relief logistics?

The contract's emphasis on 'cross dock operations' and 'dead head power positioning' highlights critical, often unseen, logistical functions vital for efficient disaster relief. Cross-docking involves transferring goods directly from incoming trucks to outgoing trucks with minimal storage, speeding up distribution. 'Dead head power positioning' refers to moving empty trailers or power units to where they are needed, ensuring fleet readiness. For disaster relief, these services are crucial for rapidly moving essential supplies (food, water, medical aid) to affected areas and positioning transportation assets effectively, minimizing delays and maximizing the flow of resources to support recovery efforts.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Road Transportation › Other Support Activities for Road Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › OTHER TRANSPORT, TRAVEL, RELOCAT SV

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3901 WEST BROAD STREET, RICHMOND, VA, 23230

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,977,214

Exercised Options: $24,977,214

Current Obligation: $24,977,214

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSFE0413D0022

IDV Type: IDC

Timeline