DHS Spends $57.8M on Mail Operations Services for NCR, Sole-Sourced Contract with ServiceSource Inc

Contract Overview

Contract Amount: $57,821,038 ($57.8M)

Contractor: Servicesource Inc

Awarding Agency: Department of Homeland Security

Start Date: 2014-10-01

End Date: 2019-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $31.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF - MAIL OPERATIONS SERVICES FOR THE NATIONAL CAPITAL REGION (NCR) AT THE CONSOLIDATED REMOTE DELIVERY SITE (CRDS).

Place of Performance

Location: CAPITOL HEIGHTS, PRINCE GEORGES County, MARYLAND, 20743

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $57.8 million to SERVICESOURCE INC for work described as: IGF::CT::IGF - MAIL OPERATIONS SERVICES FOR THE NATIONAL CAPITAL REGION (NCR) AT THE CONSOLIDATED REMOTE DELIVERY SITE (CRDS). Key points: 1. Significant spending on essential mail operations for the National Capital Region. 2. Sole-source contract raises questions about competition and potential cost savings. 3. Contract duration of 5 years (2014-2019) with a substantial value. 4. ServiceSource Inc. is the sole provider, indicating a lack of market competition for this specific service.

Value Assessment

Rating: questionable

The contract value of $57.8M over five years for mail operations services is substantial. Without competitive bidding, it's difficult to assess if this represents fair market value compared to similar contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying more than necessary for these essential mail services.

Public Impact

Ensures continuity of mail operations for critical government functions in the NCR. Potential for higher costs due to the absence of competitive pricing. Reliance on a single vendor for a vital service could pose a risk if performance issues arise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value

Positive Signals

Essential service provision
Long-term contract stability

Sector Analysis

Mail operations services fall under general administrative and support services. Benchmarks for such services can vary widely, but a $57.8M sole-source contract warrants scrutiny for efficiency.

Small Business Impact

There is no indication that small businesses were involved in this sole-source contract, either as prime contractors or subcontractors.

Oversight & Accountability

The sole-source nature of this contract suggests limited oversight on price competitiveness. Further review would be needed to assess performance oversight and accountability.

Related Government Programs

Private Mail Centers
Department of Homeland Security Contracting
Office of Procurement Operations Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated costs due to lack of competitive pricing.
Reliance on a single vendor poses service continuity risks.
Lack of transparency regarding justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $57.8 million to SERVICESOURCE INC. IGF::CT::IGF - MAIL OPERATIONS SERVICES FOR THE NATIONAL CAPITAL REGION (NCR) AT THE CONSOLIDATED REMOTE DELIVERY SITE (CRDS).

Who is the contractor on this award?

The obligated recipient is SERVICESOURCE INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $57.8 million.

What is the period of performance?

Start: 2014-10-01. End: 2019-09-30.

What was the justification for awarding this contract as sole-source, and were alternatives explored?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a specific justification existed, likely related to unique capabilities or urgent needs. However, the specific rationale and any exploration of alternative solutions are not detailed here. A deeper dive into the contract file would be necessary to understand the full justification and ensure it was appropriate.

What are the risks associated with relying on a single vendor for critical mail operations in the NCR?

The primary risks include potential service disruptions if the vendor faces operational issues, lack of incentive for the vendor to improve services or reduce costs due to no competition, and the possibility of vendor lock-in. This could lead to decreased efficiency and higher long-term costs for the government.

How does the $57.8M expenditure compare to industry benchmarks for similar mail operations services, considering the sole-source nature?

Direct comparison to industry benchmarks is challenging due to the sole-source award and the specific nature of government mail operations. However, the absence of competition inherently prevents leveraging market forces to achieve potentially lower prices. A thorough cost analysis or benchmarking against publicly available data for similar large-scale logistics and mail services would be needed for a more precise assessment.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Private Mail Centers

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HSHQDC-14-R-00093

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6295 EDSALL RD STE 175, ALEXANDRIA, VA, 22312

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

Financial Breakdown

Contract Ceiling: $57,821,038

Exercised Options: $57,821,038

Current Obligation: $57,821,038

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline