DoD's $24.2M hazardous materials contract with Amentum Services, Inc. shows fair value but limited competition

Contract Overview

Contract Amount: $24,215,560 ($24.2M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-01-19

End Date: 2023-01-15

Contract Duration: 361 days

Daily Burn Rate: $67.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: HAZARDOUS MATERIALS MANAGEMENT AND 3PL AT DLA CHERRY POINT, NC.

Place of Performance

Location: CHERRY POINT, CRAVEN County, NORTH CAROLINA, 28533

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $24.2 million to AMENTUM SERVICES, INC. for work described as: HAZARDOUS MATERIALS MANAGEMENT AND 3PL AT DLA CHERRY POINT, NC. Key points: 1. The contract's value appears reasonable when benchmarked against similar logistics and warehousing services. 2. Limited competition suggests potential for higher costs than a more open bidding process might yield. 3. The Cost Plus Award Fee (CPAF) structure introduces some performance-based incentives but also cost uncertainty. 4. This contract supports critical hazardous materials management for the Defense Logistics Agency (DLA). 5. The single delivery order structure indicates a specific, time-bound need rather than ongoing service. 6. Geographic concentration in North Carolina warrants consideration for broader logistical reach.

Value Assessment

Rating: fair

The contract's total value of $24.2 million for one year of hazardous materials management and 3PL services appears within a reasonable range when compared to industry benchmarks for similar logistics support. The Cost Plus Award Fee (CPAF) pricing structure, while allowing for performance incentives, can sometimes lead to higher final costs than fixed-price contracts if cost controls are not rigorously managed. Without more detailed cost breakdowns, a precise value-for-money assessment is challenging, but the overall expenditure seems aligned with the scope of services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the data specifies it was a 'delivery order,' which often implies it was placed against a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. The number of bidders for this specific delivery order is not provided, but the 'full and open' designation suggests a competitive process was initiated. The ultimate number of proposals received and evaluated would provide a clearer picture of the actual competition level.

Taxpayer Impact: A full and open competition, even if resulting in a single delivery order, generally benefits taxpayers by encouraging competitive pricing and potentially leading to more efficient service delivery compared to sole-source awards.

Public Impact

The primary beneficiaries are the Department of Defense and its various units requiring safe and compliant management of hazardous materials. Services delivered include warehousing, transportation, and disposal of hazardous materials, ensuring operational readiness. The contract has a geographic impact focused on Cherry Point, North Carolina, supporting DLA operations in that region. Workforce implications include employment opportunities for personnel skilled in hazardous materials handling and logistics within North Carolina.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost uncertainty inherent in Cost Plus Award Fee (CPAF) contracts requires diligent oversight to prevent cost overruns.
The limited information on the number of bidders for this specific delivery order makes it difficult to fully assess the extent of competition.
Reliance on a single delivery order may indicate a lack of long-term strategic sourcing for this critical function.

Positive Signals

Awarded under full and open competition, suggesting a structured procurement process.
The contract addresses a critical and specialized need for hazardous materials management, vital for military operations.
The CPAF structure includes award fees, incentivizing contractors to meet or exceed performance expectations.

Sector Analysis

This contract falls within the broader logistics and warehousing sector, specifically focusing on the specialized niche of hazardous materials management. The federal government is a significant consumer of these services, particularly within the Department of Defense, to ensure compliance with stringent environmental and safety regulations. Comparable spending benchmarks in this sector are difficult to pinpoint precisely due to the specialized nature of hazardous materials, but general warehousing and logistics contracts can range from millions to billions annually depending on scope and duration.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. Therefore, there are no direct subcontracting implications mandated by a small business set-aside. The prime contractor, Amentum Services, Inc., is a large business, and its subcontracting plans, if any, for small businesses are not detailed in this data. This contract does not appear to directly foster the small business ecosystem through set-aside provisions.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. The Cost Plus Award Fee (CPAF) structure necessitates robust monitoring of costs and performance to ensure the government receives value. Transparency is facilitated through contract award databases, but detailed performance reports and cost audits are typically internal oversight mechanisms. The effectiveness of oversight depends on the diligence of DLA contracting officers and auditors in managing the contract's financial and operational aspects.

Related Government Programs

DLA Hazardous Material Management Contracts
DoD Logistics and Supply Chain Services
Environmental Compliance and Management Services
Third-Party Logistics (3PL) Support Contracts

Risk Flags

Cost Uncertainty (CPAF)
Limited Competition Data
Single Delivery Order Structure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.2 million to AMENTUM SERVICES, INC.. HAZARDOUS MATERIALS MANAGEMENT AND 3PL AT DLA CHERRY POINT, NC.

Who is the contractor on this award?

The obligated recipient is AMENTUM SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $24.2 million.

What is the period of performance?

Start: 2022-01-19. End: 2023-01-15.

What is Amentum Services, Inc.'s track record with similar hazardous materials management contracts for the DoD?

Amentum Services, Inc. has a significant history of performing complex logistics, environmental, and base operations support services for the Department of Defense and other federal agencies. Their portfolio often includes hazardous materials management, waste disposal, and related compliance services. While specific contract details like value and duration vary, their experience suggests a capability to handle the requirements of this DLA Cherry Point contract. Analyzing past performance reviews, any past performance issues, and the scale of their previous hazardous materials contracts would provide a more granular understanding of their suitability and reliability for this specific task.

How does the $24.2 million cost compare to other DLA hazardous materials contracts of similar scope and duration?

Benchmarking this $24.2 million contract against other DLA hazardous materials contracts requires access to detailed historical data on similar awards. Factors such as the specific types of hazardous materials handled (e.g., chemical, biological, radiological), the volume, the range of services (storage, transport, disposal, compliance), and the contract duration significantly influence cost. Generally, contracts for specialized hazardous materials management are costly due to regulatory compliance, safety protocols, and required expertise. Without specific comparable contract data, it's challenging to definitively state if $24.2 million represents high, low, or average spending. However, for a one-year duration covering comprehensive management, it appears within a plausible range for such a critical function.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for hazardous materials management?

The primary risks associated with a CPAF contract for hazardous materials management revolve around cost control and contractor incentive alignment. CPAF contracts allow the contractor to recover allowable costs plus a fee that is composed of a base fee and an award amount, which is earned based on meeting or exceeding performance objectives. The risk for the government is that costs could escalate beyond initial projections if performance targets are not clearly defined, measurable, or if the contractor has less incentive to control costs compared to fixed-price contracts. For hazardous materials, this could also extend to risks related to safety and environmental compliance if award fees are not tightly linked to adherence to stringent regulations and protocols.

How effective is the 'full and open competition' designation in ensuring competitive pricing for this specific delivery order?

The 'full and open competition' designation indicates that the initial solicitation was broadly advertised, allowing any responsible source to submit an offer. This is a positive step towards ensuring competitive pricing. However, the effectiveness for this specific delivery order depends on how many proposals were actually received and evaluated. If this delivery order was placed under a larger IDIQ contract, the competition might have been limited to pre-qualified bidders on that IDIQ. A high number of bidders typically leads to better price discovery. Without knowing the number of proposals submitted for this particular order, the 'full and open' label suggests potential for competition, but doesn't guarantee it resulted in the lowest possible price.

What are the potential implications of awarding this contract as a single delivery order rather than a multi-year contract?

Awarding this contract as a single delivery order, with a duration of approximately one year, suggests a specific, potentially short-term or project-based need for hazardous materials management at DLA Cherry Point. The implications include less long-term budget certainty for the government and potentially higher per-unit costs compared to a multi-year contract that could benefit from economies of scale and longer-term planning. It also means the DLA would need to re-compete or re-evaluate its needs at the end of the period, allowing for adjustments based on changing requirements or market conditions. This approach offers flexibility but may forgo potential cost savings associated with longer-term commitments.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › General Warehousing and Storage

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 20501 SENECA MEADOWS PKWY STE 300, GERMANTOWN, MD, 20876

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,215,560

Exercised Options: $24,215,560

Current Obligation: $24,215,560

Actual Outlays: $62,272

Subaward Activity

Number of Subawards: 460

Total Subaward Amount: $73,653,784

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SP330022D5001

IDV Type: IDC

Timeline