DoD's $195M FA-18 CMS Contract with Kay and Associates Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $194,845,416 ($194.8M)
Contractor: KAY and Associates, Inc.
Awarding Agency: Department of Defense
Start Date: 2011-07-01
End Date: 2017-01-31
Contract Duration: 2,041 days
Daily Burn Rate: $95.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FA-18 CMS
Place of Performance
Location: BUFFALO GROVE, LAKE County, ILLINOIS, 60089
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $194.8 million to KAY AND ASSOCIATES, INC. for work described as: FA-18 CMS Key points: 1. The contract awarded to Kay and Associates, Inc. for FA-18 CMS represents a significant expenditure of $194.8 million. 2. Lack of competition is a major concern, as the contract was not competed. 3. The cost-plus-fixed-fee (CPFF) pricing structure may incentivize cost overruns. 4. The 'Other Support Activities for Air Transportation' sector is broad, and specific value for money is unclear without more detail.
Value Assessment
Rating: questionable
The contract's total value of $194.8 million is substantial. Without a competitive bidding process, it is difficult to assess if this price represents fair market value compared to similar support activities for air transportation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these services, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The long duration of the contract (2041) raises questions about long-term necessity and potential for future cost increases. Transparency in the justification for a sole-source award is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Lack of transparency in justification for sole-source
- Long contract duration
Positive Signals
- Contract supports critical defense systems (FA-18)
- Established vendor (Kay and Associates, Inc.)
Sector Analysis
This contract falls under 'Other Support Activities for Air Transportation,' a broad category. Benchmarking spending in this specific niche is challenging without more granular data on the services provided under the FA-18 CMS program.
Small Business Impact
The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small business participation was considered or subcontracted.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure the government is receiving fair value and that the contractor is performing efficiently. A thorough review of the justification for not competing the award is essential.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Sole-source award justification unclear
- Potential for cost overruns with CPFF
- Broad service category lacks specificity
- Long contract duration raises long-term value questions
Tags
other-support-activities-for-air-transpo, department-of-defense, il, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $194.8 million to KAY AND ASSOCIATES, INC.. FA-18 CMS
Who is the contractor on this award?
The obligated recipient is KAY AND ASSOCIATES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $194.8 million.
What is the period of performance?
Start: 2011-07-01. End: 2017-01-31.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies typically require detailed documentation outlining the necessity, urgency, or unique capabilities that preclude a competitive process. Without this information, it's impossible to assess if taxpayer funds were used judiciously or if a more cost-effective solution could have been achieved through open competition.
How does the cost performance of this Cost Plus Fixed Fee (CPFF) contract compare to similar support contracts, and what mechanisms are in place to control costs?
CPFF contracts can incentivize contractors to increase costs to maximize their fixed fee. Analyzing the cost performance of this contract against benchmarks for similar services is vital. Oversight should focus on the contractor's cost control measures and the agency's ability to manage and audit expenditures effectively to prevent cost overruns and ensure value for money.
What specific services are included under 'Other Support Activities for Air Transportation' for the FA-18 CMS, and how is their effectiveness measured?
The broad categorization of 'Other Support Activities for Air Transportation' necessitates a clear definition of the services provided for the FA-18 CMS. Understanding the scope of work and the key performance indicators (KPIs) used to measure the effectiveness of these services is crucial. This allows for an assessment of whether the contract is meeting its objectives and delivering the intended operational benefits.
Industry Classification
NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0042111R0033
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 165 N ARLINGTON HEIGHTS RD STE 150, BUFFALO GROVE, IL, 60089
Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $194,845,416
Exercised Options: $194,845,416
Current Obligation: $194,845,416
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-07-01
Current End Date: 2017-01-31
Potential End Date: 2017-01-31 00:00:00
Last Modified: 2021-08-23
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