DoD awards $26.8M for warehousing and distribution, with potential for significant future value

Contract Overview

Contract Amount: $26,790,103 ($26.8M)

Contractor: Olgoonik Federal, LLC

Awarding Agency: Department of Defense

Start Date: 2022-11-01

End Date: 2025-02-28

Contract Duration: 850 days

Daily Burn Rate: $31.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: SERVICES TO PERFORM WAREHOUSING AND DISTRIBUTION OPERATIONS

Plain-Language Summary

Department of Defense obligated $26.8 million to OLGOONIK FEDERAL, LLC for work described as: SERVICES TO PERFORM WAREHOUSING AND DISTRIBUTION OPERATIONS Key points: 1. Contract value indicates substantial operational support needs for the Defense Logistics Agency. 2. The contract type (Cost Plus Award Fee) suggests a focus on performance incentives. 3. Limited information on specific performance metrics makes a direct value-for-money assessment challenging. 4. The duration of the contract (over 2 years) points to a long-term requirement. 5. Competition level is 'Full and Open After Exclusion of Sources,' requiring careful review of the exclusion justification. 6. The contractor, Olgoonik Federal, LLC, is a key player in logistics support. 7. The North American Industry Classification System (NAICS) code 493110 aligns with general warehousing and storage services.

Value Assessment

Rating: fair

The award amount of $26.8 million over approximately 2.5 years for warehousing and distribution services appears to be within a reasonable range for large-scale federal logistics operations. However, without detailed breakdowns of the services provided, labor rates, and overhead costs, a precise value-for-money assessment is difficult. Benchmarking against similar contracts for comparable services would be necessary to determine if the pricing is competitive. The Cost Plus Award Fee structure implies that the final cost could vary based on performance, making a definitive comparison challenging at this stage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific sources were excluded. The justification for this exclusion is critical to understanding the competitive landscape. A limited competition, even if initially open, may result in less aggressive pricing compared to a truly unrestricted full and open competition with multiple bidders vying for the contract.

Taxpayer Impact: Taxpayers may face higher costs due to the exclusion of potential bidders, as this can reduce competitive pressure. The rationale behind the exclusion needs to be transparent to ensure fairness and optimal use of funds.

Public Impact

Military personnel and operations benefit from reliable warehousing and distribution of supplies. The services ensure the timely availability of essential goods for defense missions. Geographic impact is likely focused on the locations where the Defense Logistics Agency operates. Workforce implications include potential job creation for logistics and warehousing personnel employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'After Exclusion of Sources' clause requires scrutiny to ensure it was justified and did not unduly limit competition.
Cost Plus Award Fee contracts can sometimes lead to higher costs if not managed tightly, as contractor incentives are tied to performance.
Lack of detailed service requirements in the provided data makes it hard to assess if the scope is appropriately defined.

Positive Signals

The contract is awarded to Olgoonik Federal, LLC, potentially leveraging their existing expertise in federal contracting.
The Defense Logistics Agency's continued reliance on this contractor suggests a level of satisfaction with past performance.
The contract duration indicates a stable, long-term need for these critical logistics services.

Sector Analysis

The federal warehousing and distribution sector is a critical component of the Department of Defense's supply chain management. This contract falls under general warehousing and storage services (NAICS 493110), a market that supports a wide range of industries. The total federal spending in this category can be substantial, often involving complex logistics networks to support global operations. Comparable spending benchmarks would typically look at the cost per square foot for storage, cost per item handled, and efficiency metrics for distribution operations.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. However, the prime contractor, Olgoonik Federal, LLC, may choose to subcontract portions of the work to small businesses as part of their overall business strategy, which could indirectly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency's contracting officers and program managers. Accountability measures are built into the Cost Plus Award Fee structure, where contractor performance directly impacts their fee. Transparency is generally maintained through contract awards databases and reporting requirements, though specific operational details may be sensitive. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Logistics Agency Operations Support
Federal Warehousing Contracts
Supply Chain Management Services
Logistics and Distribution Services

Risk Flags

Potential for reduced competition due to source exclusion.
Cost escalation risk inherent in Cost Plus Award Fee contracts.
Dependence on contractor performance for mission-critical logistics.
Need for robust oversight to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.8 million to OLGOONIK FEDERAL, LLC. SERVICES TO PERFORM WAREHOUSING AND DISTRIBUTION OPERATIONS

Who is the contractor on this award?

The obligated recipient is OLGOONIK FEDERAL, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.8 million.

What is the period of performance?

Start: 2022-11-01. End: 2025-02-28.

What is the track record of Olgoonik Federal, LLC in performing similar warehousing and distribution contracts for the federal government?

Olgoonik Federal, LLC has a history of performing federal contracts, including those related to logistics and base operations support. Their experience often includes services for various government agencies, particularly within defense and civilian sectors. To assess their track record specifically for warehousing and distribution, a review of their past performance evaluations on similar contracts would be necessary. This would involve examining contract histories for on-time delivery, cost control, quality of service, and overall customer satisfaction ratings from agencies like the DLA or other branches of the military. A detailed analysis would look for patterns of success or recurring issues in managing large-scale storage and distribution operations.

How does the awarded amount of $26.8 million compare to similar warehousing and distribution contracts awarded by the Defense Logistics Agency?

The awarded amount of $26.8 million for approximately 2.5 years of warehousing and distribution services needs to be benchmarked against comparable contracts. The Defense Logistics Agency (DLA) manages a vast network of logistics operations, and contract values can vary significantly based on the scope, duration, location, and specific services required (e.g., hazardous materials handling, temperature-controlled storage, volume of goods). A preliminary comparison suggests this is a substantial award, indicative of significant operational requirements. However, without knowing the exact volume of goods, storage space utilized, or specific distribution activities, a direct comparison is difficult. Benchmarking would involve analyzing contracts with similar NAICS codes (493110) and service descriptions awarded by DLA or other military branches over the past few years to assess if the per-year or per-unit costs are competitive.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for warehousing and distribution services?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract for warehousing and distribution services revolve around cost control and performance definition. For the government, the risk is that costs could escalate beyond initial projections, as the contractor is reimbursed for allowable costs. The 'award fee' component introduces a performance incentive, but if the criteria for earning the award fee are not clearly defined, measurable, and rigorously assessed, it can lead to disputes or the contractor receiving higher fees than warranted. For the contractor, the risk lies in not meeting the performance objectives, which would reduce their overall profit. Effective management by the contracting officer is crucial to mitigate these risks by ensuring clear performance metrics, regular evaluations, and diligent oversight of incurred costs.

What does the 'Full and Open Competition After Exclusion of Sources' designation imply for the procurement process and potential cost savings?

The designation 'Full and Open Competition After Exclusion of Sources' implies a procurement process that began with the intent of broad competition but ultimately excluded certain potential offerors. This typically occurs when a specific requirement necessitates specialized capabilities or when certain sources are deemed essential for national security or other compelling reasons, and a justification for exclusion is formally documented and approved. While it aims for competition among the remaining eligible sources, the exclusion of potentially capable bidders can limit the competitive pressure. This reduced competition might lead to higher prices than if all qualified sources had been allowed to compete, potentially impacting cost savings for taxpayers. The transparency and justification for the exclusion are key factors in assessing its impact.

How does the geographic scope and operational impact of these warehousing and distribution services affect the Defense Logistics Agency's mission readiness?

The geographic scope and operational impact of these warehousing and distribution services are critical to the Defense Logistics Agency's (DLA) mission readiness. DLA is responsible for providing logistical support to all branches of the U.S. military, which requires a robust network of storage and distribution facilities. The services performed under this contract ensure that supplies, equipment, and materials are stored safely, efficiently, and are readily available for deployment or use. The effectiveness of these operations directly influences the military's ability to respond to global contingencies, maintain operational tempo, and sustain forces in various theaters. Any disruption or inefficiency in warehousing and distribution can have cascading negative effects on supply chain reliability and overall mission accomplishment.

What are the potential implications for workforce development and job creation resulting from this contract award?

This contract award for warehousing and distribution operations has direct implications for workforce development and job creation. The prime contractor, Olgoonik Federal, LLC, will likely need to hire personnel with expertise in logistics, inventory management, material handling, and transportation coordination. This can lead to the creation of new jobs, particularly in the geographic areas where the warehousing and distribution centers are located. Furthermore, depending on the contractor's policies and the nature of the work, there may be opportunities for training and skill development in specialized areas of federal logistics. The demand for skilled logistics professionals can also stimulate broader workforce development initiatives within the sector.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP330020R5004

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 3201 C ST STE 700, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $43,701,962

Exercised Options: $26,790,103

Current Obligation: $26,790,103

Actual Outlays: $3,603,719

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: SP330021D5002

IDV Type: IDC

Timeline