Department of the Navy awards $259M for facilities support services in Guam over 2.5 years

Contract Overview

Contract Amount: $259,120,849 ($259.1M)

Contractor: Dzsp 21 LLC

Awarding Agency: Department of Defense

Start Date: 2012-12-14

End Date: 2015-06-30

Contract Duration: 928 days

Daily Burn Rate: $279.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: RE-ISSUE (CONTRACT #N40192-10-C-3000) AS (CONTRACT #N40192-13-C-3001) FOR 4TH AWARD OPTION PERIOD AND 5TH AWARD OPTION PERIOD TO INCLUDE ALL EXHIBITS LINE ITEMS FOR 4TH AWARD OPTION PERIOD AND 5TH AWARD OPTION PERIOD.

Place of Performance

Location: SANTA RITA, GUAM County, GUAM, 96915

Plain-Language Summary

Department of Defense obligated $259.1 million to DZSP 21 LLC for work described as: RE-ISSUE (CONTRACT #N40192-10-C-3000) AS (CONTRACT #N40192-13-C-3001) FOR 4TH AWARD OPTION PERIOD AND 5TH AWARD OPTION PERIOD TO INCLUDE ALL EXHIBITS LINE ITEMS FOR 4TH AWARD OPTION PERIOD AND 5TH AWARD OPTION PERIOD. Key points: 1. Contract is a re-issue of a previous award, indicating continuity of services. 2. The contract type is Cost Plus Award Fee, which incentivizes performance but can lead to higher costs if not managed carefully. 3. Facilities Support Services are critical for base operations, impacting readiness and personnel welfare. 4. The contract duration of approximately 2.5 years suggests a need for stable, long-term support. 5. Awarded to DZSP 21 LLC, suggesting a known contractor with existing capabilities. 6. The significant value indicates a large scope of work, likely encompassing a wide range of facility maintenance and operational tasks.

Value Assessment

Rating: fair

The contract value of $259 million over approximately 2.5 years for facilities support services in Guam is substantial. Without specific benchmarks for similar large-scale base support contracts in the Pacific region, a precise value-for-money assessment is challenging. The Cost Plus Award Fee (CPAF) structure allows for performance incentives, but it also means the final cost can fluctuate based on achieved award fees. This contract type requires diligent oversight to ensure costs remain reasonable and aligned with performance objectives. Benchmarking against other CPAF contracts for similar services would be necessary for a more definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of seven bids (no) suggests a competitive environment for this significant facilities support services contract. A competitive process is generally expected to drive better pricing and service quality as contractors vie for the award. The specific number of bidders and the details of the bidding process would provide further insight into the intensity of the competition and its impact on the final negotiated price.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of innovative solutions, ensuring the government receives the best value for its investment.

Public Impact

Personnel and operations at Department of the Navy facilities in Guam benefit from consistent and reliable facilities support. Services include a broad range of facility maintenance, operations, and potentially other support functions essential for military base functionality. The geographic impact is concentrated in Guam, supporting U.S. military presence and operations in the Indo-Pacific region. The contract likely supports a significant local workforce, both directly employed by the contractor and indirectly through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts require robust government oversight to prevent cost overruns and ensure award fees are justified by performance.
The re-issuance of the contract suggests a potential need for contract modifications or adjustments to scope, which could impact overall cost.
Reliance on a single contractor for extensive facilities support could create vendor lock-in if not managed with future competition in mind.

Positive Signals

Awarded under full and open competition, indicating a competitive process that should yield good value.
The contractor, DZSP 21 LLC, likely has established experience and capabilities in providing these services, reducing initial performance risk.
The contract's continuity ensures uninterrupted essential services for naval operations in Guam.

Sector Analysis

Facilities Support Services (NAICS 561210) represent a broad category encompassing the operation of facilities and establishments. This sector is crucial for government operations, ensuring that military bases, administrative buildings, and other government-owned properties are maintained and functional. The market for these services is substantial, with significant government spending directed towards base operations and maintenance, particularly in strategic locations like Guam. This contract fits within the broader defense infrastructure support sector, where long-term, comprehensive service agreements are common.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). While the primary awardee is DZSP 21 LLC, the extent of small business subcontracting is not detailed here. Large prime contractors are often required to meet small business subcontracting goals, which can provide opportunities for smaller firms. However, the absence of a specific small business set-aside suggests that the primary competition was likely focused on larger, established service providers capable of handling the scale of this contract.

Oversight & Accountability

Oversight for this Cost Plus Award Fee contract would typically involve the Department of the Navy's contracting officers and technical representatives. They are responsible for monitoring contractor performance against established criteria, approving costs, and determining award fees. Transparency is facilitated through contract reporting mechanisms. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Base Operations Support (BOS)
Facilities Maintenance Contracts
Department of Defense Infrastructure
Naval Base Operations
Indo-Pacific Defense Support

Risk Flags

Cost Plus Award Fee contract type requires diligent oversight.
Potential for vendor lock-in if competition is not actively managed.
Geographic location in Guam may present logistical and cost challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $259.1 million to DZSP 21 LLC. RE-ISSUE (CONTRACT #N40192-10-C-3000) AS (CONTRACT #N40192-13-C-3001) FOR 4TH AWARD OPTION PERIOD AND 5TH AWARD OPTION PERIOD TO INCLUDE ALL EXHIBITS LINE ITEMS FOR 4TH AWARD OPTION PERIOD AND 5TH AWARD OPTION PERIOD.

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 $259.1 million.

What is the period of performance?

Start: 2012-12-14. End: 2015-06-30.

What is the historical spending trend for facilities support services at this specific Navy installation in Guam over the last decade?

Analyzing historical spending for facilities support services at this specific Navy installation in Guam over the last decade would reveal trends in contract values, service scope, and contractor changes. For instance, if spending has steadily increased, it might indicate growing needs, inflation, or scope creep. Conversely, a decrease could suggest efficiency gains or reduced operational requirements. Comparing this contract's value ($259M over ~2.5 years) to previous awards would highlight whether this represents a significant increase or a continuation of prior investment levels. Understanding these patterns is crucial for assessing the long-term financial commitment and identifying potential areas for cost optimization or budget forecasting.

How does the per-unit cost of services under this contract compare to similar facilities support contracts awarded by the Department of Defense in other Pacific-region bases?

Benchmarking the per-unit cost of services under this contract against similar facilities support contracts awarded by the Department of Defense in other Pacific-region bases is essential for evaluating value for money. Factors such as labor costs, material availability, logistical challenges, and the specific scope of services can significantly influence pricing in different geographic locations. If this contract's per-unit costs are substantially higher than comparable contracts, it could indicate inefficiencies, higher operating expenses in Guam, or less competitive pricing. Conversely, costs in line with or lower than benchmarks would suggest effective price negotiation and competitive sourcing. A detailed analysis would require isolating specific service line items (e.g., janitorial, grounds maintenance, HVAC repair) for a more accurate comparison.

What are the key performance indicators (KPIs) used to determine the 'award fee' component of this Cost Plus Award Fee contract, and how has the contractor historically performed against these KPIs?

The key performance indicators (KPIs) for a Cost Plus Award Fee (CPAF) contract like this one are critical for understanding how the contractor's performance is measured and how the 'award fee' is determined. These KPIs typically align with the Statement of Work (SOW) and might include metrics related to response times for service requests, quality of maintenance and repairs, adherence to safety standards, efficiency in resource utilization, and overall customer satisfaction. For this contract, specific KPIs would be detailed in the contract's Performance Work Statement (PWS). Historically, assessing DZSP 21 LLC's performance against these or similar KPIs on prior contracts would provide insight into their reliability and the likelihood of them earning maximum award fees, which directly impacts the total cost to the government.

What is the potential risk associated with the contractor, DZSP 21 LLC, having received multiple contract awards for similar services, and what are the implications for future competition?

The potential risk associated with a contractor like DZSP 21 LLC receiving multiple awards for similar services, especially if they are sole-source or sole-awardee over time, can include reduced future competition and potentially higher prices. If DZSP 21 LLC has consistently been the primary or sole provider for facilities support in Guam, it might indicate a high barrier to entry for competitors or a perceived lack of viable alternatives by the procuring agency. This can lead to complacency in performance or pricing. For future competition, the agency needs to ensure that the market is actively cultivated and that requirements are structured to encourage new entrants. If the incumbent's performance and pricing remain strong and competitive, it may be justified, but continuous market research and promotion of competition are vital to mitigate risks.

How does the scope of 'Facilities Support Services' in this contract align with standard industry definitions and government-wide category management initiatives for facility services?

The scope of 'Facilities Support Services' under NAICS code 561210 is broad and typically encompasses a range of services necessary for the operation and maintenance of buildings and grounds. This can include services like janitorial, security systems operation, pest control, refuse collection, and general maintenance. For this specific Department of the Navy contract, the scope is likely tailored to the unique requirements of a military installation, potentially including specialized functions beyond typical commercial facilities. Aligning this contract's scope with government-wide category management initiatives, such as those managed by the General Services Administration (GSA), would allow for better spend analysis, identification of consolidation opportunities, and leverage of government-wide purchasing power. Understanding this alignment helps assess if the services are being procured efficiently within the broader federal strategy for facility management.

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: $259,120,849

Exercised Options: $259,120,849

Current Obligation: $259,120,849

Actual Outlays: $-31,943

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline