Guam Base Operations Support Services Contract Awarded to DZSP 21 LLC for Over $103 Million

Contract Overview

Contract Amount: $103,297,472 ($103.3M)

Contractor: Dzsp 21 LLC

Awarding Agency: Department of Defense

Start Date: 2015-07-01

End Date: 2016-06-30

Contract Duration: 365 days

Daily Burn Rate: $283.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF AWARD OF CONTRACT N62742-15-C-1160, GUAM BASE OPERATIONS SUPPORT SERVICES FOR THE JOINT REGION MARIANAS (JRM). OBLIGATION OF BASE PERIOD.

Place of Performance

Location: SANTA RITA, GUAM County, GUAM, 96915

Plain-Language Summary

Department of Defense obligated $103.3 million to DZSP 21 LLC for work described as: IGF::OT::IGF AWARD OF CONTRACT N62742-15-C-1160, GUAM BASE OPERATIONS SUPPORT SERVICES FOR THE JOINT REGION MARIANAS (JRM). OBLIGATION OF BASE PERIOD. Key points: 1. Contract awarded for base period operations support services in Guam. 2. Services include facilities support, crucial for joint region operations. 3. The contract was not competed, raising questions about price discovery. 4. DZSP 21 LLC is the sole contractor for this period. 5. The contract duration is one year, with potential for extensions. 6. This award represents significant investment in Guam's military infrastructure.

Value Assessment

Rating: questionable

The contract value of over $103 million for a one-year base period for base operations support services in Guam is substantial. Without a competitive bidding process, it is difficult to benchmark the value for money effectively. The cost-plus-fixed-fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can lead to higher costs if not closely managed. Further analysis would be needed to compare this to similar contracts in other regions or for similar services to determine if the pricing is fair and reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential bidders. This approach limits the opportunity for market forces to drive down prices and ensure the most cost-effective solution. While sole-source awards can be justified in specific circumstances, the lack of competition here means taxpayers may not have received the best possible value.

Taxpayer Impact: The absence of competition means taxpayers did not benefit from potential cost savings that could have arisen from a bidding process. This could translate to higher overall expenditure for the services provided.

Public Impact

The Joint Region Marianas (JRM) benefits from continuous base operations support. Services ensure the functionality and maintenance of critical military facilities. Geographic impact is concentrated on Guam, supporting U.S. strategic presence. The contract supports the workforce required for facility management and operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Sole-source award limits transparency in pricing.
Cost-plus-fixed-fee structure can incentivize higher spending.

Positive Signals

Ensures continuity of essential base operations.
Supports critical infrastructure in a strategic location.

Sector Analysis

Facilities Support Services (NAICS 561210) is a broad category encompassing a range of services essential for the operation and maintenance of buildings and infrastructure. This contract falls within a sector critical to government operations, particularly for maintaining readiness and functionality of military installations. The market for such services is substantial, with significant government spending allocated annually. Benchmarking this specific award against other large-scale base operations contracts would provide further context on its scale and potential value.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. Therefore, the direct impact on the small business ecosystem for this particular award is likely minimal. However, the prime contractor, DZSP 21 LLC, may engage small businesses as subcontractors, which would need to be assessed through further data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy and the Department of Defense. Given it's a definitive contract, standard procurement regulations and oversight mechanisms would apply. Transparency regarding the justification for the sole-source award and the ongoing management of costs under the CPFF structure would be key areas for scrutiny by oversight bodies and potentially the Inspector General.

Related Government Programs

Base Operations Support Services
Facilities Maintenance Contracts
Department of Defense Procurement
Joint Region Marianas Support

Risk Flags

Sole-source award lacks competitive pricing.
CPFF contract type requires diligent cost oversight.
Limited public data on contractor performance history.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.3 million to DZSP 21 LLC. IGF::OT::IGF AWARD OF CONTRACT N62742-15-C-1160, GUAM BASE OPERATIONS SUPPORT SERVICES FOR THE JOINT REGION MARIANAS (JRM). OBLIGATION OF BASE 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 $103.3 million.

What is the period of performance?

Start: 2015-07-01. End: 2016-06-30.

What is the track record of DZSP 21 LLC in performing similar base operations support services?

Assessing the track record of DZSP 21 LLC is crucial for understanding their capability to deliver on this significant contract. While the provided data identifies DZSP 21 LLC as the awardee, it does not detail their past performance history. A comprehensive review would involve examining previous contracts awarded to DZSP 21 LLC, their performance evaluations, any past disputes or contract terminations, and their experience with similar scope and scale of operations, particularly in remote or strategic locations like Guam. This information is typically available through federal procurement databases and agency performance records and is vital for validating the selection of this contractor for a sole-source award.

How does the cost structure of this contract compare to industry benchmarks for similar services?

The contract is structured as Cost Plus Fixed Fee (CPFF), which means the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. To benchmark this cost structure, one would need to compare the total estimated cost and the fixed fee percentage against similar CPFF contracts for base operations support services in comparable geographic locations or for similar types of facilities. Factors such as labor rates, material costs, overhead, and the complexity of services rendered in Guam would influence these benchmarks. Without access to detailed cost breakdowns and comparative data from other agencies or contracts, a precise comparison is challenging, but the CPFF nature itself warrants close monitoring to ensure cost efficiency.

What are the primary risks associated with a sole-source award for base operations support?

The primary risks associated with a sole-source award for base operations support services include a lack of price competition, which can lead to higher costs for the government and taxpayers. Without multiple bidders vying for the contract, there is less incentive for the contractor to offer the most competitive pricing. Additionally, sole-source awards can reduce transparency in the procurement process and may limit the government's ability to explore innovative solutions or alternative service providers that might emerge in a competitive environment. There's also a risk that the contractor may become complacent due to the lack of competitive pressure, potentially impacting service quality or efficiency over time.

What is the historical spending pattern for base operations support services in Guam?

To understand the historical spending pattern for base operations support services in Guam, one would need to analyze past contracts awarded for similar services to the Joint Region Marianas or other installations on the island. This analysis should cover the preceding years, identifying the contractors, contract types, award values, and durations. Examining trends in spending, such as increases or decreases in contract values, changes in the number of contractors involved, and the prevalence of competitive versus sole-source awards, would provide valuable context. Understanding this history can help determine if the current $103 million award is an anomaly, a continuation of a trend, or indicative of changing operational needs or market conditions.

What are the potential implications of the CPFF contract type on cost control and contractor performance?

The Cost Plus Fixed Fee (CPFF) contract type has specific implications for cost control and contractor performance. On the cost control side, the government reimburses the contractor for all allowable costs incurred, which necessitates robust oversight and auditing to ensure costs are reasonable and allocable to the contract. The 'fixed fee' component provides the contractor with a defined profit margin, which is not directly tied to the total cost, theoretically incentivizing efficiency. However, the primary incentive for cost reduction often lies in the contractor's desire to maintain a good relationship for future contracts, rather than a direct financial reward for saving money on the current one. For performance, the CPFF structure allows flexibility to adapt to changing requirements, but it places a greater burden on the government to actively manage the contract and monitor performance closely to ensure objectives are met within the overall budget.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6274215R1160

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 901 LINCOLN DR W STE 200, MARLTON, NJ, 08053

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $103,297,472

Exercised Options: $103,297,472

Current Obligation: $103,297,472

Actual Outlays: $-52,284

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $5,541,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline