DoD's $28M Logistics Support Contract Awarded to Logistics Support Inc. for Engineering Services

Contract Overview

Contract Amount: $27,985,659 ($28.0M)

Contractor: Logistics Support Incorporated

Awarding Agency: Department of Defense

Start Date: 2017-09-30

End Date: 2025-09-30

Contract Duration: 2,922 days

Daily Burn Rate: $9.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF SEA 06L LOGISTICS AND FINANCIAL MANAGEMENT SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $28.0 million to LOGISTICS SUPPORT INCORPORATED for work described as: IGF::OT::IGF SEA 06L LOGISTICS AND FINANCIAL MANAGEMENT SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is substantial, spanning over 8 years, indicating a long-term need for these services. 4. The contract is a delivery order under a larger contract, implying it's part of a broader acquisition strategy. 5. The North American Industry Classification System (NAICS) code 541330 points to engineering services, a critical area for defense operations. 6. The contract is not set aside for small businesses, meaning larger firms likely dominated the bidding. 7. The contract is not a small business subcontracting goal, indicating no specific mandate for small business participation. 8. The contract is managed by the Department of the Navy, a major component of the Department of Defense.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee (CPFF) contract is challenging without detailed cost breakdowns and performance metrics. CPFF contracts inherently carry a risk of cost escalation as the contractor is reimbursed for actual costs plus a fixed fee. While the total award amount is $27.98 million, the actual final cost will depend on the services rendered and the contractor's efficiency. Comparing this to similar logistics and engineering support contracts within the DoD is difficult without more specific service scope details. However, the long duration (over 8 years) suggests a significant, ongoing requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for ensuring fair pricing and access to the best available solutions, the limited number of bidders (two) might warrant further investigation into potential barriers to entry or market concentration for these specialized engineering and logistics services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces. However, with only two bidders, the potential for significant cost savings may be limited compared to scenarios with a larger pool of competitors.

Public Impact

The Department of the Navy benefits from specialized engineering and logistics support, crucial for maintaining operational readiness and efficiency. The services delivered are expected to enhance the effectiveness and reliability of naval operations and assets. The geographic impact is likely concentrated around naval bases and operational areas where the Department of the Navy conducts its activities. The contract supports a workforce skilled in engineering, logistics management, and potentially specialized technical fields within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk of cost overruns if not rigorously managed.
Limited number of bidders (two) in a full and open competition may indicate potential market concentration or barriers to entry.
Long contract duration (over 8 years) increases the exposure to potential scope creep or evolving requirements that could impact cost and performance.
Lack of specific small business set-aside or subcontracting goals may limit opportunities for smaller businesses in this contract's value chain.

Positive Signals

Awarded through full and open competition, which generally promotes fair pricing and access to a wide range of potential providers.
The contract addresses a critical need for engineering and logistics support within the Department of Defense, essential for mission success.
The contractor, Logistics Support Incorporated, is likely experienced in providing these types of services, given the award.
The delivery order structure suggests it aligns with a broader, established contracting vehicle, potentially indicating streamlined acquisition processes.

Sector Analysis

The engineering services sector, particularly as it applies to defense and logistics, is a significant segment of the federal contracting market. Companies in this space provide critical expertise for complex projects, from design and development to maintenance and operational support. The Department of Defense is a major consumer of these services, often requiring specialized knowledge to manage intricate systems and global supply chains. Benchmarks for similar contracts would typically consider the scope of engineering disciplines, the level of security clearance required, and the criticality of the systems being supported.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting goals for small businesses. This suggests that the primary awardee is likely a large business, and there may be limited direct opportunities for small businesses to participate as prime contractors. However, the prime contractor may engage small businesses as subcontractors, depending on their own supply chain needs and strategies. The absence of explicit small business targets means that the direct economic impact on the small business ecosystem for this specific contract may be minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be embedded in the contract's terms and conditions, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Department of Defense Logistics Support Services
Naval Engineering Services Contracts
Cost-Plus-Fixed-Fee Contracts
Defense Logistics Agency (DLA) Contracts
Federal Engineering Services Procurement

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Limited number of bidders (two) may indicate reduced price competition.
Long contract duration increases exposure to evolving requirements and potential scope creep.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.0 million to LOGISTICS SUPPORT INCORPORATED. IGF::OT::IGF SEA 06L LOGISTICS AND FINANCIAL MANAGEMENT SERVICES

Who is the contractor on this award?

The obligated recipient is LOGISTICS SUPPORT INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.0 million.

What is the period of performance?

Start: 2017-09-30. End: 2025-09-30.

What is the track record of Logistics Support Incorporated in performing similar defense contracts?

Assessing the track record of Logistics Support Incorporated requires a deep dive into their past performance on federal contracts, particularly those with the Department of Defense and the Department of the Navy. This would involve reviewing contract histories for similar service types (engineering, logistics support), contract values, and performance ratings. Publicly available data, such as contract award databases and past performance reviews (if accessible), can provide insights. A positive track record would indicate a history of meeting performance requirements, adhering to schedules, and managing costs effectively. Conversely, a history of performance issues, disputes, or contract terminations would raise concerns about their capability to successfully execute this current $27.98 million contract over its extended duration.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar services?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or when there is a high degree of uncertainty in the costs involved, such as in research and development or complex engineering projects. Compared to Firm-Fixed-Price (FFP) contracts, CPFF shifts more cost risk to the government, as the contractor is reimbursed for all allowable costs plus a predetermined fee. While FFP contracts offer greater price certainty for the government, they may not be suitable for highly uncertain work. Other contract types like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) aim to incentivize contractor performance and cost control more directly than a simple CPFF. The choice of CPFF for this logistics and engineering services contract suggests the government anticipated significant cost variability or a need for flexibility in defining the exact services over the contract's long life.

What are the primary risks associated with a Cost Plus Fixed Fee contract of this duration?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, especially one with a long duration like this 8+ year award, revolve around cost control and scope management. The government bears the risk of cost overruns, as the contractor is reimbursed for actual costs incurred. Without robust oversight and clear performance metrics, contractors may have less incentive to control costs tightly, potentially leading to expenditures exceeding initial estimates. Scope creep is another significant risk; as requirements evolve over the contract's lifespan, the scope of work can expand, increasing costs without a corresponding increase in the fixed fee. Furthermore, the contractor's focus might shift towards maximizing allowable costs to increase the fee base, rather than achieving efficiencies. Effective contract administration, regular performance reviews, and stringent change control processes are crucial to mitigate these risks.

How does the $27.98 million award compare to historical spending on similar logistics and engineering services by the Department of the Navy?

To compare this $27.98 million award to historical spending, one would need to analyze the Department of the Navy's procurement data for contracts with similar NAICS codes (e.g., 541330 - Engineering Services) and service descriptions (logistics support). This analysis should consider the contract type (CPFF), duration, and the specific nature of the services provided. If historical data shows that similar, long-term engineering and logistics support contracts for the Navy typically range from $20 million to $40 million, then this award would appear to be within a reasonable range. Conversely, if historical awards for comparable services are significantly lower, it might suggest this contract is priced higher or encompasses a broader scope than typical. Without access to detailed historical spending patterns for highly specific service categories, a precise comparison is difficult.

What are the potential implications of having only two bidders for this contract?

Having only two bidders in a full and open competition can have several implications. On the positive side, it still indicates that the competition was open to all, and the government received at least two proposals to evaluate. However, a low number of bidders might suggest potential issues such as high barriers to entry (e.g., specialized expertise, security clearances, bonding requirements), a limited market for these specific services, or perhaps that the contract's terms or estimated value were not attractive enough to draw more competition. For taxpayers, fewer bidders can mean less downward pressure on pricing, potentially leading to higher costs than if there were a more robust competitive field. It also concentrates the risk of contractor performance on a smaller pool of companies.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0017417R3023

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2611 JEFFERSON DAVIS HIGHWAY #12000, ARLINGTON, VA, 22202

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

Financial Breakdown

Contract Ceiling: $28,861,287

Exercised Options: $28,861,287

Current Obligation: $27,985,659

Actual Outlays: $2,018,598

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D7806

IDV Type: IDC

Timeline