State Department spent $39M on armored vehicle rentals, a short-term contract with limited competition

Contract Overview

Contract Amount: $39,000,000 ($39.0M)

Contractor: Miscellaneous Foreign Awardees

Awarding Agency: Department of State

Start Date: 2008-12-29

End Date: 2009-01-31

Contract Duration: 33 days

Daily Burn Rate: $1.2M/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: USACOE/ARMORED VEHICLE RENTAL

Plain-Language Summary

Department of State obligated $39.0 million to MISCELLANEOUS FOREIGN AWARDEES for work described as: USACOE/ARMORED VEHICLE RENTAL Key points: 1. The contract focused on short-term armored vehicle rentals, indicating a need for immediate operational support. 2. Competition was limited, raising questions about potential price discovery and value for money. 3. The contract was competed under Special Acquisition Procedures (SAP), suggesting specific circumstances for limited bidding. 4. The short duration of the contract (33 days) implies a tactical or temporary requirement. 5. The award was a Purchase Order (PO), typically used for smaller or simpler acquisitions. 6. The service category (Armored Car Services) points to security-sensitive operations.

Value Assessment

Rating: fair

Benchmarking the value for this contract is challenging due to the specific nature of armored vehicle rentals and the limited competition. The raw dollar amount of $39 million for a 33-day period suggests a high per-day cost. Without comparable contracts for similar services in the same geographic region and operational context, it's difficult to definitively assess if this represents good value. The firm fixed-price nature provides cost certainty but doesn't inherently guarantee efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Special Acquisition Procedures (SAP), which typically allows for a limited number of bidders compared to full and open competition. The data indicates there were 3 bidders. While some competition existed, the use of SAP suggests that full and open competition may not have been feasible or practical for this specific requirement, potentially impacting price negotiation.

Taxpayer Impact: Limited competition can sometimes lead to higher prices for taxpayers if the available bidders are few or if the specific requirements restrict broader participation.

Public Impact

The primary beneficiaries are likely Department of State personnel requiring secure transportation in potentially high-risk environments. The service delivered is the rental of armored vehicles, crucial for ensuring the safety of individuals during transit. The geographic impact is likely concentrated in areas where the Department of State operates and faces security challenges. Workforce implications are minimal in terms of direct job creation from this contract, as it focuses on equipment rental rather than services requiring extensive personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than could have been achieved through full and open competition.
The short duration and high cost raise questions about the long-term cost-effectiveness of this approach for the Department's security needs.
Lack of detailed performance metrics makes it difficult to assess the effectiveness of the armored vehicles provided.

Positive Signals

The use of a firm fixed-price contract provides cost certainty for the government.
The contract was awarded, ensuring the Department of State had access to necessary secure transportation.
The existence of multiple bidders, even under SAP, suggests some level of market interest and potential for negotiation.

Sector Analysis

The armored vehicle rental market is a niche segment within the broader security and transportation services sector. It caters to government agencies and private entities requiring enhanced protection for personnel and assets. Spending in this area is often driven by geopolitical conditions, security threats, and the operational needs of agencies working in challenging environments. Comparable spending benchmarks are difficult to establish due to the specialized nature and often classified operational contexts of such rentals.

Small Business Impact

There is no indication that this contract involved small business set-asides. The nature of specialized armored vehicle services often requires significant capital investment and specific certifications, which may favor larger, established providers. Subcontracting opportunities for small businesses are not explicitly detailed but would likely be limited given the specialized service.

Oversight & Accountability

Oversight for this contract would fall under the Department of State's contracting and procurement oversight mechanisms. As a Purchase Order, it likely underwent internal review and approval processes. Transparency is limited by the nature of the service and the use of SAP. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of State Diplomatic Security Service
Armored Vehicle Procurement
Protective Services Contracts
Foreign Affairs Security
Transportation Services

Risk Flags

Limited Competition
High Per-Day Cost
Short Contract Duration
Unusual Award Type for Value

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $39.0 million to MISCELLANEOUS FOREIGN AWARDEES. USACOE/ARMORED VEHICLE RENTAL

Who is the contractor on this award?

The obligated recipient is MISCELLANEOUS FOREIGN AWARDEES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $39.0 million.

What is the period of performance?

Start: 2008-12-29. End: 2009-01-31.

What was the specific operational context that necessitated the rental of armored vehicles for the Department of State?

The specific operational context for this $39 million armored vehicle rental contract, awarded in late 2008 for a 33-day period, was likely related to providing secure transportation for Department of State personnel in a high-risk or volatile environment. Such requirements often arise during diplomatic missions, crisis response, or in regions experiencing significant security concerns. The short duration suggests a temporary, acute need rather than ongoing operational requirements. Without classified details, the precise location and threat assessment remain undisclosed, but the service itself points to a critical security imperative for personnel operating abroad.

How does the per-day cost of these armored vehicle rentals compare to industry benchmarks or similar government contracts?

Determining a precise per-day cost benchmark for this $39 million contract, which lasted only 33 days, is challenging due to the specialized nature of armored vehicle rentals and the limited public data available for comparable contracts. However, a rough calculation indicates a daily cost of approximately $1.18 million ($39,000,000 / 33 days). This figure appears exceptionally high and suggests either a very large fleet of vehicles was rented, the vehicles were of the highest security specification, or the operational environment incurred significant additional costs (e.g., logistics, security escorts, specialized deployment). Standard armored vehicle rental rates, even for high-end models, are typically in the thousands, not millions, per day. This suggests unique circumstances or a potential overpayment.

What are the potential risks associated with using Special Acquisition Procedures (SAP) for a contract of this magnitude?

Using Special Acquisition Procedures (SAP) for a $39 million contract, as seen with the armored vehicle rentals, carries inherent risks. SAP is designed for specific circumstances where full and open competition is not feasible, such as urgent needs or national security requirements. However, it can limit the pool of potential bidders, potentially leading to higher prices and reduced innovation. There's also a risk that the justification for using SAP might not be robust, potentially masking inefficiencies or a lack of strategic planning. For taxpayers, the primary risk is paying a premium due to restricted competition and potentially less rigorous price scrutiny compared to a fully competed contract.

Given the short duration, was this contract an effective use of taxpayer funds for the Department of State's security needs?

Assessing the effectiveness of this $39 million, 33-day armored vehicle rental contract as a use of taxpayer funds is difficult without more context. If the vehicles were critical for ensuring the safety of personnel during a specific, high-threat event or mission, then the expenditure could be justified as a necessary cost of operations. However, the extremely high implied daily cost raises concerns about value for money. If similar needs could have been met through longer-term leasing, purchasing, or alternative security measures at a lower overall cost, then this short-term rental might represent an inefficient use of funds. The limited competition further complicates the value assessment.

What does the award type (Purchase Order) signify in the context of this large dollar amount?

The award type being a Purchase Order (PO) for a $39 million contract is unusual. Purchase Orders are typically used for simpler, lower-value acquisitions of goods or services, often processed through established procurement systems with streamlined documentation. Larger, more complex procurements, especially those involving significant dollar amounts and limited competition like this one, are more commonly executed via contracts (e.g., Definitive Contracts, Task Orders under IDIQs). The use of a PO for such a substantial sum might indicate an expedited process, a specific internal policy of the Department of State, or potentially a less formal contracting approach than might be expected for a procurement of this scale, which could have implications for oversight and documentation rigor.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Armored Car Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2011 CRYSTAL DR STE 911, ARLINGTON, VA, 08

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $39,000,000

Exercised Options: $39,000,000

Current Obligation: $39,000,000

Timeline