Department of the Navy awards $12.56M contract for water transportation support, highlighting full and open competition

Contract Overview

Contract Amount: $12,563,109 ($12.6M)

Contractor: Global Pcci (GPC)

Awarding Agency: Department of Defense

Start Date: 2025-02-28

End Date: 2027-01-30

Contract Duration: 701 days

Daily Burn Rate: $17.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: DIVING PROCUREMENTS

Place of Performance

Location: IRVINE, ORANGE County, CALIFORNIA, 92612

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.6 million to GLOBAL PCCI (GPC) for work described as: DIVING PROCUREMENTS Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires robust oversight. 3. Delivery order awarded against a larger contract vehicle, indicating potential for follow-on work. 4. The duration of 701 days suggests a significant, ongoing need for these services. 5. The contract is for 'Other Support Activities for Water Transportation,' a critical but often overlooked sector. 6. Geographic focus on California may indicate specific operational needs or basing requirements.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the total contract value it falls under. However, the fixed fee component suggests a defined profit margin. The Cost Plus Fixed Fee structure requires careful monitoring to ensure costs remain reasonable and that the fixed fee adequately compensates the contractor for their efforts without being excessive. Comparison to similar support contracts for water transportation would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster price discovery and ensure the government receives competitive offers. The number of bidders is not specified, but the 'full and open' designation generally implies a robust competitive landscape, which is favorable for cost efficiency.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider selection of qualified contractors, leading to better value for their investment.

Public Impact

The Department of the Navy benefits from essential support services for its water transportation operations. This contract ensures the continued functioning of critical maritime logistics and infrastructure. The geographic impact is primarily focused on California, likely supporting naval bases or operations in the region. While not directly creating new jobs, it sustains existing roles within the maritime support services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not closely managed.
The fixed fee, while intended to cap profit, could still represent a significant cost if base costs are high.
Reliance on a single delivery order against a larger vehicle might obscure the true total cost of services over time.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
The fixed fee component provides some predictability in contractor profit.
The contract supports essential naval operations, aligning with defense objectives.

Sector Analysis

The maritime support services sector is vital for national defense and global trade. This contract falls within the broader category of logistics and transportation support, a market segment that sees consistent government spending, particularly from defense agencies. Comparable spending benchmarks would typically involve analyzing other contracts for port services, vessel maintenance, and related operational support within the Department of Defense and other maritime agencies.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the nature of 'Other Support Activities for Water Transportation,' it is possible that larger, established firms in the maritime industry are the primary awardees. Further analysis would be needed to determine if small businesses are participating as subcontractors.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the contracting officer and the relevant Department of the Navy program office. Accountability measures would include performance reviews, audits, and adherence to the contract's terms and conditions. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Naval Support Activity Contracts
Maritime Logistics Services
Water Transportation Infrastructure Support
Department of Defense Procurement

Risk Flags

Cost Plus Fixed Fee contract requires diligent oversight to manage costs.
Geographic concentration in a high-cost area like California may increase overall expenses.
Lack of specific detail on the number of bidders limits assessment of competitive intensity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.6 million to GLOBAL PCCI (GPC). DIVING PROCUREMENTS

Who is the contractor on this award?

The obligated recipient is GLOBAL PCCI (GPC).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.6 million.

What is the period of performance?

Start: 2025-02-28. End: 2027-01-30.

What is the historical spending pattern for 'Other Support Activities for Water Transportation' by the Department of the Navy?

Analyzing historical spending for 'Other Support Activities for Water Transportation' by the Department of the Navy reveals a consistent investment in maintaining operational readiness and logistical capabilities. While specific figures fluctuate annually based on strategic priorities and operational tempo, the Navy has historically allocated significant resources to ensure the efficient functioning of its waterborne assets and associated infrastructure. This includes expenditures on services such as port operations, vessel maintenance coordination, and specialized transportation management. The trend generally shows a steady demand for these services, underscoring their critical role in supporting naval deployments and exercises. Understanding these patterns helps in assessing the long-term budgetary implications and the strategic importance placed on this sector by the Navy.

How does the Cost Plus Fixed Fee (CPFF) structure typically impact contractor performance and cost control in similar contracts?

The Cost Plus Fixed Fee (CPFF) contract structure is designed to provide flexibility when project scope is not fully defined at the outset, or when innovation is required. In this structure, the contractor is reimbursed for allowable costs incurred, plus a predetermined fixed fee representing their profit. This can incentivize contractors to complete the work efficiently to maximize their return on the fixed fee. However, it also places a significant burden on the government to meticulously audit and approve all costs. Without robust oversight, there's a risk that costs could escalate, as the contractor's profit is fixed regardless of the total cost. Effective CPFF contracts rely on strong government monitoring of expenditures, clear definition of allowable costs, and performance metrics to ensure value for money and prevent cost overruns.

What are the potential risks associated with a delivery order awarded under a larger contract vehicle for water transportation support?

A delivery order awarded under a larger contract vehicle, while offering flexibility and potentially faster procurement, carries specific risks. One primary risk is that the overall value and scope of the parent contract may not be fully transparent, making it difficult to assess the true cost-effectiveness of individual delivery orders. There's also a risk of 'scope creep' if the delivery orders incrementally expand the services beyond the original intent without adequate re-competition. Furthermore, the competition for the initial contract vehicle might have been robust, but subsequent delivery orders might not undergo the same level of scrutiny or competitive bidding, potentially leading to less favorable pricing over time. Ensuring that each delivery order represents fair value and aligns with the original procurement objectives is crucial.

What is the typical profit margin for contractors in the 'Other Support Activities for Water Transportation' sector?

Determining a precise 'typical' profit margin for contractors in the 'Other Support Activities for Water Transportation' sector is complex, as it varies significantly based on contract type, risk, competition, and the specific services rendered. For Cost Plus Fixed Fee (CPFF) contracts, the 'fixed fee' is negotiated upfront and represents the contractor's profit. This fee is typically a percentage of the estimated cost of the contract. Historically, fixed fees on CPFF contracts have ranged from around 3% to 15% of the estimated cost, with lower percentages often seen in contracts with lower risk or higher competition, and higher percentages for more complex or riskier endeavors. However, this is a negotiated amount and can be influenced by market conditions and the government's negotiation strategy. Without knowing the negotiated fixed fee percentage for this specific contract, it's difficult to provide a definitive benchmark.

How does the geographic concentration in California impact the overall cost and efficiency of this contract?

The geographic concentration of this contract in California can have several impacts on its cost and efficiency. California has a high cost of living and operating expenses, which can translate into higher labor and overhead costs for the contractor compared to regions with lower economic activity. This may necessitate a higher bid or fee to cover these operational realities. However, concentrating services in a specific region can also lead to efficiencies through economies of scale, reduced travel time for personnel and equipment, and a more streamlined supply chain if local resources are leveraged. The presence of significant naval infrastructure in California might also mean a more established ecosystem of support services, potentially increasing competition among local providers, which could drive down costs. The net effect on cost and efficiency depends on the interplay of these factors.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002417R4323

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2465 CAMPUS DRIVE, SUITE 100, IRVINE, CA, 92612

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $12,563,109

Exercised Options: $12,563,109

Current Obligation: $12,563,109

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0002419D4323

IDV Type: IDC

Timeline