Guam Base Operations Support Services Contract Awarded to DZSP 21 LLC for $196.7 Million

Contract Overview

Contract Amount: $196,709,469 ($196.7M)

Contractor: Dzsp 21 LLC

Awarding Agency: Department of Defense

Start Date: 2019-03-01

End Date: 2020-08-31

Contract Duration: 549 days

Daily Burn Rate: $358.3K/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 N62742-19-C-1175, 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 $196.7 million to DZSP 21 LLC for work described as: IGF::OT::IGF AWARD OF CONTRACT N62742-19-C-1175, GUAM BASE OPERATIONS SUPPORT SERVICES FOR THE JOINT REGION MARIANAS (JRM). OBLIGATION OF BASE PERIOD. Key points: 1. The contract covers essential base operations support for Joint Region Marianas, ensuring critical infrastructure and services. 2. A significant portion of the contract value is allocated to facilities support services, indicating a focus on maintenance and upkeep. 3. The duration of the contract, spanning over 500 days, suggests a long-term commitment to service provision. 4. The award method, 'NOT COMPETED', raises questions about potential cost efficiencies and market-driven pricing. 5. The contract type, 'COST PLUS FIXED FEE', allows for cost reimbursement plus a fixed fee, which can incentivize cost control but also carries inherent risks. 6. The geographic focus on Guam highlights the strategic importance of the region for U.S. military operations.

Value Assessment

Rating: questionable

The contract's value of $196.7 million for a period of approximately 18 months for base operations support is substantial. Without direct comparable contracts for similar services in the same geographic region, a precise value-for-money assessment is challenging. However, the 'NOT COMPETED' status and 'COST PLUS FIXED FEE' structure warrant scrutiny regarding potential cost overruns and the absence of competitive pressure to drive down prices. Benchmarking against industry standards for facilities support services in high-cost areas like Guam would be necessary for a more definitive assessment.

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 vendors. This approach is typically used when only one vendor can provide the required services, or in situations where urgency or national security dictates a direct award. The lack of competition means that the government did not benefit from the price discovery and potential cost savings that typically arise from a competitive bidding process. This can lead to higher prices than might be achieved in an open market.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive bidding. The government did not have the opportunity to solicit the lowest possible price from a range of qualified contractors.

Public Impact

The primary beneficiaries are the U.S. military personnel and their families stationed at Joint Region Marianas, who rely on these services for daily operations and quality of life. Services delivered include a wide range of base operations support, encompassing facilities maintenance, logistics, and potentially other essential functions. The geographic impact is concentrated on Guam, a critical strategic location in the Pacific. Workforce implications include employment opportunities for local residents and potentially U.S. expatriates on Guam, supporting the local economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
Cost-plus fixed-fee contract type can incentivize cost escalation if not rigorously managed.
Lack of transparency in the justification for sole-source award.
Potential for contractor to leverage unique position for future contract terms.
Limited visibility into the specific performance metrics and their impact on service quality.

Positive Signals

Ensures continuity of essential base operations support in a strategically vital location.
DZSP 21 LLC is likely a specialized provider with established capabilities in the region.
The fixed fee component provides some level of cost predictability for the government.
The contract duration suggests a stable operational environment for the services provided.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing the management and operation of physical infrastructure. The market for base operations support is often characterized by specialized firms capable of operating in remote or high-security environments. Given the strategic importance of Guam, spending in this sector is substantial, driven by defense needs. Comparable spending benchmarks would typically be found in other large-scale base support contracts awarded by the Department of Defense in similar overseas locations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and that small business participation was not a specific requirement (sb: false). This suggests that the prime contractor, DZSP 21 LLC, is likely a large business. There is no information provided regarding subcontracting plans or opportunities for small businesses within this award. Consequently, this contract may not directly contribute to the government's small business contracting goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Base Operations Support Services
Facilities Maintenance and Management
Department of Defense Contracts
Joint Region Marianas Operations
Pacific Region Defense Spending

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding
Potential for cost overruns
Limited transparency in award justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $196.7 million to DZSP 21 LLC. IGF::OT::IGF AWARD OF CONTRACT N62742-19-C-1175, 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 $196.7 million.

What is the period of performance?

Start: 2019-03-01. End: 2020-08-31.

What is the track record of DZSP 21 LLC in providing base operations support services, particularly in the Guam region?

Information regarding the specific track record of DZSP 21 LLC for this particular contract is not detailed in the provided data. However, the award of a significant contract like this suggests the company possesses the necessary qualifications and experience to perform base operations support services. To fully assess their track record, one would need to examine past performance evaluations, any prior contracts of similar scope and value awarded to DZSP 21 LLC, and any documented issues or successes in previous engagements. Without this external data, it's difficult to provide a comprehensive analysis of their capabilities and reliability beyond the fact that they were selected for this role.

How does the cost-plus-fixed-fee structure compare to other contract types for similar base operations support services, and what are the implications for cost control?

Cost-plus-fixed-fee (CPFF) contracts reimburse the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there's a high degree of uncertainty. Compared to fixed-price contracts, CPFF can offer more flexibility but carries a higher risk of cost overruns if not managed diligently, as the government bears the cost risk. For base operations support, fixed-price contracts might be preferred if requirements are stable and well-defined, potentially offering better value. The fixed fee in CPFF provides some incentive for the contractor to control costs, as their profit is capped, but the primary cost control mechanism relies on robust government oversight and auditing of incurred expenses.

What specific justification was provided for awarding this contract on a sole-source basis, and were alternative approaches considered?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. However, the specific justification for this sole-source determination is not included in the data snippet. Typically, sole-source awards require a formal justification, such as the existence of only one responsible source capable of meeting the requirement, urgent and compelling needs, or specific national security considerations. Without access to the contract file or the justification document, it is impossible to ascertain the precise reasons for not competing this requirement or whether alternative acquisition strategies were explored and deemed unsuitable. This lack of transparency in the justification process is a common concern with sole-source awards.

What are the key performance indicators (KPIs) for this contract, and how is contractor performance being measured and evaluated?

The provided data does not specify the key performance indicators (KPIs) or the detailed performance evaluation metrics for this contract. In a base operations support contract, KPIs typically revolve around service availability, response times for maintenance requests, quality of facility upkeep, safety compliance, and logistical efficiency. The effectiveness of contractor performance measurement relies heavily on the contract's statement of work, performance work statement (PWS), and the government's quality assurance surveillance plan (QASP). Robust oversight mechanisms and regular performance reviews are crucial to ensure that DZSP 21 LLC is meeting the required standards and delivering value for the $196.7 million investment.

How does the total contract value of $196.7 million compare to historical spending on base operations support in the Guam region or similar Pacific installations?

Comparing the $196.7 million contract value requires context regarding the duration and scope of services. This contract covers approximately 18 months (from March 2019 to August 2020). To assess if this is comparable, one would need to analyze historical spending patterns for base operations support at Joint Region Marianas or other comparable U.S. military installations in the Pacific. Factors such as the size of the installation, the number of personnel supported, and the specific services included significantly influence contract values. Without historical data for similar contracts in the region, it's challenging to definitively state whether this award represents an increase, decrease, or is in line with previous spending trends. However, given the strategic importance and infrastructure needs of Guam, substantial investment in base operations is expected.

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: N6274219R1175

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Amentum Services, Inc.

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: $201,677,702

Exercised Options: $201,677,702

Current Obligation: $196,709,469

Actual Outlays: $21,478,393

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline