DoD's $311M Facilities Support Contract with DZSP 21 LLC Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $311,011,511 ($311.0M)
Contractor: Dzsp 21 LLC
Awarding Agency: Department of Defense
Start Date: 2009-12-18
End Date: 2014-12-31
Contract Duration: 1,839 days
Daily Burn Rate: $169.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: (PERFORMANCE) 1ST AOY UNDER RE-ISSUE CONTRACT N40192-10-C-3000
Place of Performance
Location: SANTA RITA, GUAM County, GUAM, 96915
Plain-Language Summary
Department of Defense obligated $311.0 million to DZSP 21 LLC for work described as: (PERFORMANCE) 1ST AOY UNDER RE-ISSUE CONTRACT N40192-10-C-3000 Key points: 1. The contract awarded to DZSP 21 LLC for facilities support services is substantial at over $311 million. 2. Awarded under full and open competition, the contract's pricing and effectiveness warrant further examination. 3. The lack of small business participation is a notable concern. 4. The IT sector is not directly involved, but facilities management is crucial for operational readiness.
Value Assessment
Rating: questionable
The contract's cost-plus award fee structure, while common, can incentivize cost increases. Benchmarking against similar facilities support contracts is essential to determine if the $311 million award represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, suggesting a robust price discovery process. However, the long duration and specific nature of facilities support may limit true competition over time.
Taxpayer Impact: The significant taxpayer investment necessitates rigorous oversight to ensure efficient and effective service delivery, maximizing value for money.
Public Impact
Taxpayers are funding extensive facilities support services critical to naval operations in Guam. The contract's long-term nature raises questions about sustained cost-effectiveness and potential for price creep. The absence of small business involvement limits opportunities for smaller, potentially more agile, service providers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of small business participation
- Potential for cost overruns in cost-plus contracts
- Long contract duration may reduce competitive pressure
Positive Signals
- Awarded under full and open competition
- Services are critical for operational readiness
Sector Analysis
Facilities support services are essential for maintaining government infrastructure and operational readiness. Benchmarks for such contracts vary widely based on scope, location, and service complexity, but $311 million over five years indicates a significant investment.
Small Business Impact
The contract explicitly states no small business participation (ss: false, sb: false). This is a missed opportunity to engage smaller businesses and could indicate a lack of targeted outreach or a focus on large-scale providers.
Oversight & Accountability
The contract's duration and value suggest a need for robust oversight from the Department of the Navy to ensure performance standards are met and costs remain controlled. Regular performance reviews and audits are crucial.
Related Government Programs
- Facilities Support Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of small business participation
- Potential for cost overruns due to Cost Plus Award Fee structure
- Long contract duration may reduce competitive pressure over time
- Limited transparency on performance metrics and their impact on final cost
Tags
facilities-support-services, department-of-defense, gu, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $311.0 million to DZSP 21 LLC. (PERFORMANCE) 1ST AOY UNDER RE-ISSUE CONTRACT N40192-10-C-3000
Who is the contractor on this award?
The obligated recipient is DZSP 21 LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $311.0 million.
What is the period of performance?
Start: 2009-12-18. End: 2014-12-31.
How does the actual performance of DZSP 21 LLC compare to the award fee criteria, and has this impacted the total cost paid by the government?
The award fee structure suggests performance is directly tied to compensation. Analyzing the awarded fees against performance metrics would reveal if the government received commensurate value for the $311 million spent. Without this data, it's difficult to assess if the cost-plus model truly optimized spending or incentivized unnecessary expenses.
Given the full and open competition, what factors might have led to a single awardee for such a long duration, and does this limit future competitive opportunities?
Full and open competition theoretically maximizes the bidder pool. However, the specialized nature of comprehensive facilities support, combined with the significant scale and duration (5 years), may have naturally favored larger, established companies. This long-term commitment could potentially create barriers to entry for new competitors in subsequent procurements.
What is the government's strategy for ensuring cost-effectiveness and preventing price creep over the life of this extensive facilities support contract?
The government likely employs several strategies, including detailed performance metrics tied to award fees, regular contract reviews, and potentially market research to benchmark costs. However, the cost-plus award fee structure inherently carries a risk of cost escalation. Proactive contract management and a clear understanding of market rates are vital.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 1818 MARKET ST, 22ND FLR, PHILADELPHIA, PA, 19103
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $311,011,511
Exercised Options: $311,011,511
Current Obligation: $311,011,511
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2009-12-18
Current End Date: 2014-12-31
Potential End Date: 2014-12-31 00:00:00
Last Modified: 2018-05-31
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