State Department's $10.7M logistics support contract awarded without competition, raising value concerns

Contract Overview

Contract Amount: $10,704,348 ($10.7M)

Contractor: Oms/Kbr Logistics Support Services, LLC

Awarding Agency: Department of State

Start Date: 2007-09-21

End Date: 2013-03-30

Contract Duration: 2,017 days

Daily Burn Rate: $5.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: SUPPORT SERVICES

Place of Performance

Location: DUNN LORING, FAIRFAX County, VIRGINIA, 22027

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $10.7 million to OMS/KBR LOGISTICS SUPPORT SERVICES, LLC for work described as: SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of over 5 years suggests a long-term need for these services. 3. Services provided are broad, encompassing 'All Other Professional, Scientific, and Technical Services'. 4. The contract was awarded as a Time and Materials type, which can pose cost control challenges. 5. The agency and service acquisition are both within the Department of State. 6. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: questionable

Given the sole-source award and Time and Materials pricing structure, a thorough value assessment is difficult without comparative data. The lack of competition suggests that the government may not have secured the most favorable pricing. Benchmarking against similar logistics support contracts, especially those competed, would be necessary to determine if the $10.7 million expenditure represents good value for money. The absence of a fixed price or competitive bidding process inherently introduces risk regarding cost efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of State did not solicit bids from multiple potential contractors. This approach is typically reserved for situations where only one contractor can provide the required services, or in cases of urgent need. The lack of competition means there was no opportunity for price negotiation or comparison among different vendors, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing the requirement, the government missed the opportunity to leverage market forces to drive down prices and ensure the best possible value.

Public Impact

The Department of State benefits from the continuity of essential logistics support services. Services likely support diplomatic missions and operations, ensuring the smooth functioning of foreign policy initiatives. The geographic impact is potentially global, supporting State Department operations worldwide. Workforce implications are tied to the contractor's personnel providing these specialized services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to overpayment.
Time and Materials contract type can lead to cost overruns if not managed carefully.
Broad service description makes it difficult to assess specific performance metrics and value.
Long contract duration without clear performance benchmarks raises concerns about sustained value.

Positive Signals

Contract supports critical government functions within the Department of State.
The contractor has a long-standing relationship with the agency, suggesting some level of established performance.
The contract was awarded to a single entity, potentially simplifying management and oversight.

Sector Analysis

The professional, scientific, and technical services sector is vast and encompasses a wide range of support functions for government agencies. Logistics support, in particular, is crucial for agencies operating globally, like the Department of State. While specific market size data for this niche is difficult to isolate, the overall federal spending on professional services is in the hundreds of billions annually. This contract represents a small fraction of that, but its sole-source nature warrants scrutiny within the broader context of government procurement efficiency.

Small Business Impact

This contract did not include a small business set-aside, nor is there an indication of significant subcontracting opportunities for small businesses. The award to a single, likely larger, entity suggests that the primary focus was on fulfilling the service requirement rather than promoting small business participation. This could mean missed opportunities to foster growth within the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of State's contracting officers and program managers. As a Time and Materials contract, rigorous monitoring of labor hours and material costs would be essential to ensure compliance and prevent cost creep. Transparency is limited due to the sole-source nature, and specific Inspector General jurisdiction would depend on the nature of any reported issues or audits.

Related Government Programs

Department of State Operations Support
Federal Logistics Management
Professional and Technical Services Procurement
Sole-Source Contract Awards

Risk Flags

Sole-source award
Time and Materials contract type
Lack of clear performance metrics
Broad service description

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $10.7 million to OMS/KBR LOGISTICS SUPPORT SERVICES, LLC. SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is OMS/KBR LOGISTICS SUPPORT SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $10.7 million.

What is the period of performance?

Start: 2007-09-21. End: 2013-03-30.

What is the track record of OMS/KBR LOGISTICS SUPPORT SERVICES, LLC with the Department of State?

OMS/KBR LOGISTICS SUPPORT SERVICES, LLC has a history of contracts with the Department of State, including this specific logistics support agreement. The duration of this contract, spanning from September 2007 to March 2013, indicates a sustained relationship. While the data provided does not detail specific performance metrics or past issues, the renewal or continuation of contracts suggests a level of satisfaction or necessity from the agency's perspective. Further investigation into past performance reviews, any incurred penalties, or commendations would provide a more comprehensive understanding of their track record.

How does the $10.7 million cost compare to similar logistics support contracts awarded by the Department of State or other agencies?

Directly comparing the $10.7 million cost is challenging without knowing the specific scope, duration, and service level agreements of other contracts. However, the fact that this was a sole-source, Time and Materials contract awarded over a period of approximately 5.5 years (from Sept 2007 to Mar 2013) suggests a potential for higher costs compared to competitively bid, fixed-price contracts. The average annual cost would be around $1.9 million. Benchmarking against similar, competitively procured logistics support contracts for agencies of similar size and operational scope would be necessary to ascertain if this represents a fair market price or if value was potentially sacrificed due to the lack of competition.

What are the primary risks associated with a sole-source, Time and Materials contract for logistics support?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing as the contractor faces no direct market comparison. The government loses the opportunity to negotiate based on multiple bids. Secondly, the Time and Materials (T&M) pricing model carries inherent risks of cost escalation. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours and material costs. Without stringent oversight and well-defined ceilings, this structure can incentivize longer project durations and higher resource utilization, leading to costs exceeding initial estimates. Effective management and detailed tracking are crucial to mitigate these risks.

How effective are Time and Materials contracts in ensuring program effectiveness for long-term support services?

Time and Materials contracts can be effective for long-term support services when managed with exceptional diligence and clear performance metrics. They offer flexibility, allowing for adjustments in scope or effort as needs evolve, which can be beneficial for complex or evolving logistics requirements. However, their effectiveness is heavily dependent on robust government oversight. This includes meticulous tracking of labor hours, validation of material costs, and regular performance reviews tied to defined outcomes. Without such controls, T&M contracts risk becoming less cost-effective over time and may not drive the same level of efficiency as other contract types. For this specific contract, the broad nature of 'All Other Professional, Scientific, and Technical Services' necessitates particularly strong oversight to ensure the services delivered align with the agency's evolving needs and represent good value.

What is the historical spending pattern for logistics support services within the Department of State?

Analyzing the historical spending patterns for logistics support services within the Department of State requires access to comprehensive federal procurement data beyond this single contract. This $10.7 million award from 2007-2013 represents a specific instance. To understand broader trends, one would need to examine total outlays for similar service codes (like NAICS 541990) over multiple fiscal years, identify the primary contractors, and assess the mix of competitive versus sole-source awards. Such an analysis could reveal whether spending in this category has increased or decreased, whether the Department relies heavily on sole-source procurements for these services, and how pricing has evolved over time, providing context for the value and necessity of individual contracts like the one detailed.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 360 WEST BENSON BLVD, STE 302, ANCHORAGE, AK, 00

Business Categories: Category Business, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $10,704,353

Exercised Options: $10,704,353

Current Obligation: $10,704,348

Timeline