DoD's $21.9M Warehousing Contract Awarded to Professional Contract Services, Inc. with Limited Competition

Contract Overview

Contract Amount: $21,878,063 ($21.9M)

Contractor: Professional Contract Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-01

End Date: 2026-08-31

Contract Duration: 1,825 days

Daily Burn Rate: $12.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: STORAGE AND WAREHOUSING SERVICES

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $21.9 million to PROFESSIONAL CONTRACT SERVICES, INC. for work described as: STORAGE AND WAREHOUSING SERVICES Key points: 1. The contract value of $21.9 million over five years suggests a significant need for warehousing and storage services. 2. Limited competition for this contract raises questions about potential price inflation and the best use of taxpayer funds. 3. The firm-fixed-price contract type aims to control costs, but the lack of robust competition may undermine this. 4. The duration of the contract (5 years) indicates a long-term strategic requirement for these services. 5. The award to a single vendor under limited competition warrants scrutiny to ensure fair pricing and service quality. 6. The absence of small business set-aside provisions means opportunities for smaller firms in this sector are not explicitly prioritized.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed service descriptions and comparable contract data. However, a $21.9 million award over five years for warehousing services, especially under limited competition, suggests a potentially higher per-unit cost than might be achieved in a more competitive environment. The firm-fixed-price structure provides some cost certainty, but the lack of competitive pressure could lead to less favorable pricing for the government compared to a fully competed contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under limited competition, meaning that not all responsible sources were solicited. The specific reasons for this limitation are not detailed in the provided data. A limited competition scenario typically involves fewer bidders than a full and open competition, which can impact the government's ability to secure the most competitive pricing and innovative solutions.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers as the government may not benefit from the full range of pricing and service options that a more open bidding process would provide.

Public Impact

The Department of the Navy benefits from essential storage and warehousing services, ensuring operational readiness and efficient supply chain management. The contract supports the logistical needs of military operations, indirectly benefiting national defense by maintaining critical inventory. The services are likely concentrated in Virginia, where the contractor is located, impacting the local economy through employment and business activity. The contract supports the workforce employed by Professional Contract Services, Inc., contributing to job creation in the warehousing and logistics sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to suboptimal pricing and reduced incentive for innovation.
Lack of transparency in the justification for limited competition raises concerns about fairness and potential favoritism.
The long contract duration could lock the government into a potentially less advantageous arrangement if market conditions change.
Absence of small business participation requirements may limit opportunities for smaller, specialized firms.

Positive Signals

The firm-fixed-price contract type provides cost predictability for the government.
The contractor, Professional Contract Services, Inc., is awarded a significant contract, indicating a level of trust or established relationship.
The contract duration suggests a stable and reliable provision of essential services for the Department of the Navy.

Sector Analysis

The warehousing and storage sector is a critical component of the broader logistics and supply chain industry. This contract falls under General Warehousing and Storage (NAICS 493110), which encompasses establishments primarily engaged in operating merchandise warehouses for the storage of general goods. The federal government is a significant consumer of these services, particularly the Department of Defense, for maintaining inventory, equipment, and supplies. Market size for federal warehousing services is substantial, driven by the need for secure, efficient, and geographically dispersed storage solutions to support various agency missions.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, as indicated by 'sb: false'. This means that the contract was not specifically reserved for small businesses. While the prime contractor may engage small businesses as subcontractors, there is no explicit requirement for them to do so. This could limit the direct opportunities for small businesses to secure prime contract work in this area and may not fully leverage the agility and specialized services that small businesses can offer within the warehousing and storage ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards, delivery schedules, and payment clauses. Transparency is facilitated through contract databases like FPDS, which provide basic award information. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Logistics Services
General Warehousing and Storage Contracts
Federal Supply Chain Management
Military Base Support Services

Risk Flags

Limited Competition Justification
Potential for Price Inflation
Lack of Small Business Participation
Long-Term Contract Lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.9 million to PROFESSIONAL CONTRACT SERVICES, INC.. STORAGE AND WAREHOUSING SERVICES

Who is the contractor on this award?

The obligated recipient is PROFESSIONAL CONTRACT SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.9 million.

What is the period of performance?

Start: 2021-09-01. End: 2026-08-31.

What is the track record of Professional Contract Services, Inc. in performing similar federal warehousing contracts?

Assessing the track record of Professional Contract Services, Inc. requires a deeper dive into their past performance on federal contracts, particularly those involving warehousing and storage. While this award suggests they are capable of meeting the Department of the Navy's needs, a comprehensive review would involve examining past performance evaluations, any documented issues or disputes, and their history of on-time delivery and quality of service. Without access to detailed performance data beyond the award itself, it's difficult to definitively gauge their reliability and expertise in executing large-scale warehousing operations for the government. Further investigation into their contract history, including any awards or penalties, would provide a clearer picture of their capabilities and potential risks.

How does the awarded price compare to market rates for similar warehousing services?

The provided data does not include specific unit costs or detailed service breakdowns, making a direct comparison to market rates challenging. The total contract value of $21.9 million over five years for General Warehousing and Storage services (NAICS 493110) provides a broad financial scope. To benchmark effectively, one would need to analyze the specific services included (e.g., square footage, types of goods stored, handling requirements, security levels) and compare these to industry benchmarks and pricing for comparable contracts awarded by other federal agencies or commercial entities. The 'limited competition' aspect also suggests that the negotiated price might be higher than what could be achieved in a fully competitive scenario, potentially impacting the value for money.

What are the specific risks associated with awarding a long-term contract under limited competition?

Awarding a long-term contract (5 years) under limited competition introduces several risks. Firstly, the lack of robust competition can lead to inflated pricing, as the contractor may face less pressure to offer the most cost-effective solution. Secondly, it can stifle innovation, as the contractor might have less incentive to improve services or adopt new technologies if they are guaranteed business for an extended period. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch providers if performance issues arise or market conditions change. Finally, the justification for limited competition needs to be thoroughly scrutinized to ensure it is valid and not masking potential issues with the procurement process or contractor selection.

What is the expected effectiveness of these warehousing services in supporting the Department of the Navy's mission?

The effectiveness of these warehousing services is crucial for the Department of the Navy's operational readiness and supply chain efficiency. Assuming Professional Contract Services, Inc. delivers according to the contract's terms, the services should ensure that necessary supplies, equipment, and materials are stored securely, maintained properly, and available when needed. This directly supports naval operations, maintenance, and deployment readiness. The effectiveness will ultimately be measured by factors such as inventory accuracy, timely retrieval of goods, minimal damage or loss of stored items, and adherence to security protocols. The long-term nature of the contract suggests a strategic importance in maintaining these capabilities.

How has federal spending in the General Warehousing and Storage sector evolved over the past five years?

Federal spending in the General Warehousing and Storage sector (NAICS 493110) has generally remained substantial, driven by the ongoing logistical needs of various government agencies, particularly the Department of Defense. While specific aggregate spending figures fluctuate year-to-year based on agency priorities, global deployments, and economic conditions, the demand for secure and efficient storage solutions is a consistent requirement. Trends may include increased emphasis on technology integration (e.g., inventory management systems, automation), sustainability in operations, and the need for specialized storage for sensitive materials. The Department of the Navy, as a major user of these services, contributes significantly to this spending category.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › General Warehousing and Storage

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0018921R0014

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 718 W FM 1626, AUSTIN, TX, 78748

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: $24,158,370

Exercised Options: $21,878,064

Current Obligation: $21,878,063

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline