DoD's $38.8M warehouse operations contract awarded to Olgoonik Federal, LLC for 2nd and 3rd shifts

Contract Overview

Contract Amount: $38,801,486 ($38.8M)

Contractor: Olgoonik Federal, LLC

Awarding Agency: Department of Defense

Start Date: 2024-02-22

End Date: 2026-09-30

Contract Duration: 951 days

Daily Burn Rate: $40.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: PROVIDE CONTRACT LABOR SUPPORT TO PERFORM GENERAL WAREHOUSE OPERATIONS AT DDSP NEW CUMBERLAND AND NAS MECHANICSBURG ON SECOND (2ND) AND THIRD (3RD) SHIFTS TASK ORDER #16

Place of Performance

Location: NEW CUMBERLAND, YORK County, PENNSYLVANIA, 17070

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $38.8 million to OLGOONIK FEDERAL, LLC for work described as: PROVIDE CONTRACT LABOR SUPPORT TO PERFORM GENERAL WAREHOUSE OPERATIONS AT DDSP NEW CUMBERLAND AND NAS MECHANICSBURG ON SECOND (2ND) AND THIRD (3RD) SHIFTS TASK ORDER #16 Key points: 1. Contract focuses on essential warehouse operations, ensuring continuity for critical logistics functions. 2. The awardee, Olgoonik Federal, LLC, has secured a significant contract for multi-shift support. 3. Performance period spans over two years, indicating a need for sustained operational capacity. 4. The contract type, Cost Plus Fixed Fee, allows for flexibility but requires close cost monitoring. 5. This award is part of broader Defense Logistics Agency (DLA) efforts to maintain supply chain efficiency. 6. The geographic focus on New Cumberland and Mechanicsburg highlights key logistical hubs in Pennsylvania.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee structure necessitates careful oversight to ensure costs remain reasonable. Benchmarking against similar warehousing contracts is challenging without detailed scope breakdowns. However, the duration and scope suggest a significant operational requirement. The total award value of $38.8 million over approximately 2.6 years implies a substantial investment in maintaining critical logistics functions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' suggesting a specific reason for excluding certain potential bidders, which warrants further investigation into the justification. The limited competition aspect could potentially impact price discovery and may not yield the most cost-effective outcome for the government.

Taxpayer Impact: Taxpayers may not benefit from the most competitive pricing due to the limited nature of the competition, potentially leading to higher overall costs for these essential warehouse operations.

Public Impact

The primary beneficiaries are the Department of Defense and its supply chain, ensuring the smooth operation of warehouses at key installations. Services delivered include general warehousing and storage, crucial for the readiness and operational capability of military units. The geographic impact is concentrated in Pennsylvania, specifically at DDSP New Cumberland and NAS Mechanicsburg. Workforce implications include the potential for job creation or retention for personnel involved in warehouse operations, likely on second and third shifts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpayment and lack of cost optimization.
The Cost Plus Fixed Fee structure requires diligent oversight to prevent cost overruns.
The exclusion of sources needs clear justification to ensure fairness and maximize competition.
The reliance on a single awardee for critical multi-shift operations could pose a risk if performance issues arise.

Positive Signals

The contract ensures continuous, multi-shift warehouse operations, vital for military readiness.
Awarding to Olgoonik Federal, LLC provides a dedicated resource for essential logistics support.
The defined performance period offers clarity on the expected duration of services.

Sector Analysis

This contract falls within the General Warehousing and Storage sector (NAICS 493110), a critical component of the logistics and supply chain industry. The defense sector heavily relies on efficient warehousing to maintain readiness and operational capabilities. Comparable spending benchmarks in this sector are difficult to ascertain without specific details on the scale and complexity of operations, but the awarded amount reflects a significant contract for specialized, multi-shift support at key military installations.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary consideration for this specific award. There is no indication of small business set-asides or subcontracting requirements. This suggests that the primary focus was on the capabilities of the awarded contractor, potentially overlooking opportunities to engage and support the small business ecosystem in this sector.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Logistics Agency (DLA) contracting officers and quality assurance representatives. Accountability measures will be tied to the Cost Plus Fixed Fee contract terms, performance metrics, and delivery schedules. Transparency is generally maintained through contract award databases, though specific operational details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Warehouse Operations
Department of Defense Supply Chain Management
Military Installation Logistics Support
General Warehousing and Storage Services

Risk Flags

Limited competition may impact cost-effectiveness.
Cost Plus Fixed Fee structure requires robust oversight to manage potential cost overruns.
Exclusion of sources needs clear justification to ensure fairness and maximize value.
Reliance on a single contractor for critical multi-shift operations poses a performance risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.8 million to OLGOONIK FEDERAL, LLC. PROVIDE CONTRACT LABOR SUPPORT TO PERFORM GENERAL WAREHOUSE OPERATIONS AT DDSP NEW CUMBERLAND AND NAS MECHANICSBURG ON SECOND (2ND) AND THIRD (3RD) SHIFTS TASK ORDER #16

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 $38.8 million.

What is the period of performance?

Start: 2024-02-22. End: 2026-09-30.

What is the specific justification for the 'Exclusion of Sources' in this 'Full and Open Competition' award?

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This designation typically implies that while the competition was intended to be open, specific sources were excluded based on predefined criteria, such as unique capabilities, security requirements, or prior performance. Without access to the detailed justification documents associated with this specific award, it is impossible to determine the precise reasons for excluding other potential bidders. This exclusion mechanism can sometimes limit the breadth of competition and potentially impact the final price achieved. Further analysis would require reviewing the contract file and associated documentation from the Defense Logistics Agency to understand the rationale behind this decision and its implications for cost-effectiveness and taxpayer value.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar warehouse operations, and what are the associated risks?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty in the costs. In this case, it allows the contractor to be reimbursed for allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers more flexibility for the government if requirements change, but it carries a higher risk of cost overruns as the contractor is incentivized to incur costs to perform the work. The primary risk for taxpayers is that the final cost could exceed initial estimates if costs are not rigorously managed and controlled by the government. Effective oversight, detailed cost accounting, and clear performance metrics are crucial to mitigate these risks and ensure value for money under a CPFF arrangement for warehouse operations.

What is the historical spending pattern for similar warehouse operations contracts by the Defense Logistics Agency?

Analyzing historical spending patterns for similar warehouse operations contracts by the Defense Logistics Agency (DLA) is crucial for benchmarking and assessing value. While specific historical data for this exact task order is not provided, DLA consistently awards significant contracts for logistics and warehouse support across various installations. Past awards for general warehousing and storage services, especially those involving multi-shift operations and critical inventory management, often range from several million to tens of millions of dollars annually, depending on the scope, duration, and location. Trends may show an increasing reliance on contracted services for efficiency and specialized expertise. Understanding the historical cost trends, competition levels, and performance outcomes of previous DLA warehousing contracts would provide a valuable context for evaluating the current $38.8 million award's reasonableness and effectiveness.

What performance metrics are typically included in such contracts, and how are they monitored?

Contracts for general warehouse operations, particularly those supporting defense logistics, typically include a range of performance metrics to ensure efficiency, accuracy, and timeliness. Common metrics often encompass inventory accuracy rates (e.g., percentage of items correctly accounted for), order fulfillment timeliness (e.g., percentage of orders shipped within a specified timeframe), on-time delivery rates, safety incident rates, and labor productivity. Performance monitoring is usually conducted through a combination of government quality assurance representatives (QARs) who conduct site visits and audits, contractor self-reporting, and data analysis from integrated systems. The Defense Logistics Agency (DLA) would establish specific Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) within the contract, with regular reviews and performance reports required from the contractor. Failure to meet these metrics can result in contractual remedies, including financial penalties or termination.

What is the potential impact of this contract on the overall efficiency and readiness of the military installations it supports?

This contract directly supports the operational readiness of the Department of Defense by ensuring the continuous and efficient functioning of warehouse operations at DDSP New Cumberland and NAS Mechanicsburg, particularly during critical second and third shifts. Reliable warehousing is fundamental to the military supply chain, enabling the timely storage, retrieval, and distribution of essential equipment, supplies, and materials. By outsourcing these functions to Olgoonik Federal, LLC, the DLA aims to leverage specialized expertise and potentially achieve greater efficiency and cost-effectiveness than managing these operations entirely in-house. The success of this contract directly correlates with the military's ability to maintain adequate inventory levels, respond rapidly to operational demands, and sustain mission capabilities. Disruptions or inefficiencies in these warehouse operations could have cascading negative effects on readiness and operational effectiveness.

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 FIXED FEE (U)

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: $38,801,486

Exercised Options: $38,801,486

Current Obligation: $38,801,486

Actual Outlays: $569,208

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