DoD's $16M logistics contract awarded to a small business joint venture shows potential for value, but competition details warrant scrutiny

Contract Overview

Contract Amount: $16,055,027 ($16.1M)

Contractor: Total Logistics SB Joint Venture

Awarding Agency: Department of Defense

Start Date: 2021-09-01

End Date: 2026-08-31

Contract Duration: 1,825 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LOGISTICS AND TECHNICAL SERVICES

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $16.1 million to TOTAL LOGISTICS SB JOINT VENTURE for work described as: LOGISTICS AND TECHNICAL SERVICES Key points: 1. The contract's value of $16 million over five years suggests a significant investment in logistics and technical services. 2. Awarded to a joint venture, this contract highlights a strategy to leverage specialized capabilities, potentially from small businesses. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not closely managed, indicating a moderate risk. 4. Performance context is limited without specific deliverables, but the duration implies a long-term need for these services. 5. Positioned within the Defense sector, this contract supports critical operational requirements for the Department of the Navy. 6. The 'TOTAL LOGISTICS SB JOINT VENTURE' name suggests a focus on small business participation, though its direct impact needs further analysis.

Value Assessment

Rating: fair

Benchmarking the value of this $16 million contract is challenging without specific performance metrics or comparable service contracts. The Cost Plus Fixed Fee (CPFF) pricing structure introduces inherent risk, as costs can escalate beyond initial estimates, potentially impacting overall value for money. While the award to a joint venture might indicate a strategic approach to acquiring specialized expertise, it also necessitates careful oversight to ensure efficient resource utilization and prevent cost inefficiencies. The fixed fee component provides some cost control, but the variable cost basis requires diligent monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which is a less common and potentially restrictive competition method. This suggests that while the initial solicitation may have been broad, specific criteria or exclusions were applied, limiting the pool of eligible bidders. The fact that only two bids were received further indicates a constrained competitive landscape. This limited competition could potentially lead to higher prices than would be achieved in a truly open market, as the government has fewer options to choose from.

Taxpayer Impact: The limited number of bidders and the specific exclusion of sources suggest that taxpayers may not have benefited from the most competitive pricing possible. This procurement method could result in a higher overall cost to the government compared to a fully open and unrestricted competition.

Public Impact

The Department of the Navy benefits from specialized logistics and technical services crucial for its operational readiness. The contract supports the delivery of essential services that likely underpin various naval operations and support functions. Geographic impact is likely concentrated around naval bases or operational areas where these logistics services are required. Workforce implications may include employment opportunities within the joint venture, potentially drawing from both large and small business expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method raises concerns about the breadth of competition and potential for higher costs.
A Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation if not rigorously managed.
Receiving only two bids suggests a potentially narrow field of competition, which could limit price discovery and value.
The specific nature of 'LOGISTICS AND TECHNICAL SERVICES' requires detailed performance monitoring to ensure effectiveness and prevent scope creep.

Positive Signals

Award to a joint venture, potentially including small business participation, can foster innovation and specialized capabilities.
The five-year duration indicates a stable, long-term need for these critical logistics and technical services.
The fixed fee component in the CPFF contract provides a defined level of contractor profit, offering some predictability.
The contract is awarded by the Department of the Navy, a major defense entity, suggesting alignment with significant national security objectives.

Sector Analysis

The defense logistics and technical services sector is a critical component of national security, encompassing a wide range of support functions for military operations. This market is characterized by complex supply chains, specialized technical expertise, and significant government spending. Contracts in this area often involve long-term commitments and require contractors to meet stringent performance and security standards. The total addressable market for defense logistics services is substantial, with agencies like the Department of Defense being major clients. This specific contract fits within the broader category of engineering and technical support services, often procured through competitive bidding processes, though methods can vary.

Small Business Impact

The contract's award to 'TOTAL LOGISTICS SB JOINT VENTURE' strongly suggests an intention to involve small businesses. However, the specific structure of the joint venture and the extent of small business participation (e.g., ownership percentage, subcontracting roles) are not detailed here. If structured effectively, such joint ventures can provide small businesses with opportunities to gain experience on larger contracts and build their capabilities. The impact on the broader small business ecosystem depends on whether this joint venture model is replicable and if it leads to genuine capacity building for the small business partners, rather than simply serving as a pass-through.

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's terms and conditions, including performance standards, reporting requirements, and payment schedules tied to milestones. Transparency is often limited for specific contract details due to national security or proprietary concerns, but contract awards and basic information are usually publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Logistics Support Contracts
Naval Operations and Maintenance Services
Engineering Services for Military Applications
Small Business Joint Venture Contracts
Cost-Plus-Fixed-Fee Service Contracts

Risk Flags

Limited Competition
Cost Plus Fixed Fee Risk
Potential for Cost Overruns
Ambiguity in Small Business Role
Lack of Specific Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.1 million to TOTAL LOGISTICS SB JOINT VENTURE. LOGISTICS AND TECHNICAL SERVICES

Who is the contractor on this award?

The obligated recipient is TOTAL LOGISTICS SB JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.1 million.

What is the period of performance?

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

What is the track record of 'TOTAL LOGISTICS SB JOINT VENTURE' in performing similar government contracts?

Information regarding the specific track record of 'TOTAL LOGISTICS SB JOINT VENTURE' is not readily available in the provided data. As a joint venture, its performance history may be a composite of its individual member companies or a newly established entity. A thorough review would require examining past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for the joint venture itself, or for its principal members if the joint venture is newly formed. Understanding the experience and past performance of the key personnel and the parent companies involved is crucial for assessing the likelihood of successful contract execution. Without this data, assessing the contractor's reliability and capability is speculative.

How does the awarded price compare to market rates for similar logistics and technical services?

Direct comparison of the awarded price ($16 million over five years) to market rates is difficult without detailed service descriptions and performance metrics. However, the Cost Plus Fixed Fee (CPFF) structure means the total cost is variable, dependent on actual costs incurred plus a fixed fee. Benchmarking would involve analyzing the fixed fee percentage against industry standards for similar risk profiles and contract types, and assessing whether the estimated cost base is reasonable. The limited competition (two bidders) suggests that the government may not have achieved the most competitive pricing possible, potentially leading to costs above optimal market rates. Further analysis would require access to the detailed cost proposals and independent government cost estimates.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract, and how are they being mitigated?

The primary risk with a CPFF contract is cost overrun, as the contractor is reimbursed for actual allowable costs, which can exceed initial estimates. The fixed fee provides a ceiling on the contractor's profit but not on the total cost. Mitigation strategies typically involve robust government oversight, detailed cost tracking and auditing, clear definition of allowable costs, and strong negotiation of the fixed fee based on risk and complexity. The Department of the Navy must implement rigorous Earned Value Management (EVM) or similar performance monitoring systems to track cost and schedule variances. Regular reviews of contractor expenditures and performance against milestones are essential to identify and address potential cost escalations early.

What is the expected effectiveness of the services delivered under this contract in supporting naval operations?

The effectiveness of the services is contingent upon the specific nature of the 'LOGISTICS AND TECHNICAL SERVICES' and the performance of the contractor. Given the five-year duration and the award by the Department of the Navy, these services are presumed to be critical for ongoing operational support. Effectiveness will be measured by the contractor's ability to meet defined performance standards, delivery timelines, and quality requirements outlined in the contract. Without specific details on the services (e.g., supply chain management, maintenance, technical support for specific systems), a precise assessment of effectiveness is not possible. Success will depend on clear performance metrics and diligent government oversight.

How does this contract's spending compare to historical patterns for similar logistics and technical services within the Department of the Navy?

To assess historical spending patterns, one would need to analyze previous contracts awarded by the Department of the Navy for comparable logistics and technical services. This would involve identifying contracts with similar scope, duration, and pricing structures (e.g., CPFF). Comparing the $16 million total value over five years ($3.2 million annually on average) against historical data would reveal whether this award represents an increase, decrease, or stable level of investment. Factors such as inflation, changes in operational tempo, and technological advancements would need to be considered for a meaningful comparison. Access to historical contract databases and spending reports is necessary for this analysis.

What are the implications of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method on value for taxpayers?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method implies that while the initial solicitation was broad, certain sources were subsequently excluded based on specific criteria. This can limit the number of potential bidders compared to a truly unrestricted full and open competition. When the field of bidders is narrowed, the competitive pressure to offer the lowest price may be reduced. Consequently, taxpayers might face higher costs than if a wider range of qualified vendors had been allowed to compete. The justification for excluding sources needs to be robust to ensure that this method serves a legitimate purpose without unduly sacrificing potential cost savings for the government.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0042119R0014

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 9161 LIBERIA AVE #305, MANASSAS, VA, 20110

Business Categories: Category Business, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,467,876

Exercised Options: $19,456,000

Current Obligation: $16,055,027

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042120D0015

IDV Type: IDC

Timeline