DoD Awards $21.2M Warehousing Contract to Synergy Logistics, Facing Potential Price Concerns

Contract Overview

Contract Amount: $21,191,749 ($21.2M)

Contractor: Synergy Logistics Services II LLC

Awarding Agency: Department of Defense

Start Date: 2024-05-01

End Date: 2025-04-30

Contract Duration: 364 days

Daily Burn Rate: $58.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIXED PRICE INCENTIVE

Sector: Other

Official Description: SERVICES TO PERFORM WAREHOUSING AND DISTRIBUTION OPERATIONS

Place of Performance

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

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $21.2 million to SYNERGY LOGISTICS SERVICES II LLC for work described as: SERVICES TO PERFORM WAREHOUSING AND DISTRIBUTION OPERATIONS Key points: 1. Contract awarded to Synergy Logistics Services II LLC for warehousing and distribution. 2. The $21.2M contract is for a 1-year period, ending April 30, 2025. 3. Full and open competition was used, but exclusion of sources raises questions. 4. The sector is General Warehousing and Storage, with a benchmark of $5.8M.

Value Assessment

Rating: questionable

The contract's awarded value of $21.2M significantly exceeds the benchmark of $5.8M for similar warehousing and storage contracts. This substantial difference warrants further investigation into the pricing structure and justification.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' While competition was sought, the exclusion of specific sources limits the potential for broader price discovery and may indicate a less competitive environment than ideal.

Taxpayer Impact: The significant deviation from the benchmark suggests potential overspending, impacting taxpayer funds negatively. Further analysis is needed to confirm if the higher cost is justified by unique service requirements or market conditions.

Public Impact

Taxpayers may be overpaying for essential warehousing and distribution services due to limited competition. The exclusion of sources could indicate a lack of robust market research or a pre-determined outcome. Ensuring fair pricing for government contracts is crucial for efficient use of public funds.

Waste & Efficiency Indicators

Waste Risk Score: 58 / 10

Warning Flags

Value significantly exceeds benchmark
Limited competition due to source exclusion
Potential for overpayment

Positive Signals

Contract awarded under a competitive process
Clear service period and deliverables

Sector Analysis

The General Warehousing and Storage sector involves managing inventory, distribution, and logistics for government agencies. The benchmark for this contract is $5.8M, making the awarded $21.2M notably higher, suggesting potential inefficiencies or unique requirements.

Small Business Impact

The data indicates that small business participation was not a factor in this award (sb: false). Further analysis would be needed to determine if opportunities were missed for small businesses in this contracting action.

Oversight & Accountability

The 'exclusion of sources' clause within the full and open competition requires scrutiny to ensure transparency and fairness. Oversight should focus on the justification for excluding potential bidders and the subsequent price negotiation.

Related Government Programs

General Warehousing and Storage
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Award value significantly exceeds benchmark
Limited competition due to source exclusion
Potential for overpayment
Lack of small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.2 million to SYNERGY LOGISTICS SERVICES II LLC. SERVICES TO PERFORM WAREHOUSING AND DISTRIBUTION OPERATIONS

Who is the contractor on this award?

The obligated recipient is SYNERGY LOGISTICS SERVICES II LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.2 million.

What is the period of performance?

Start: 2024-05-01. End: 2025-04-30.

What specific factors justified the awarded value significantly exceeding the benchmark for warehousing and distribution services?

The significant difference between the awarded value ($21.2M) and the benchmark ($5.8M) necessitates a detailed review of the contract's specific requirements, service level agreements, and any unique logistical challenges. It's crucial to ascertain if the higher cost is attributable to specialized handling, extended storage needs, expedited delivery, or other factors not immediately apparent from the provided data. Without this context, the price appears questionable.

How did the exclusion of sources impact the competitive landscape and final pricing for this contract?

Excluding sources, even within a 'full and open' framework, inherently limits the competitive pool. This can reduce pressure on bidders to offer the most competitive pricing. The agency must demonstrate that the exclusion was justified by specific, documented reasons and that the resulting price discovery process still yielded fair and reasonable rates, despite the narrowed competition.

What is the potential risk to taxpayer funds given the high awarded value compared to the benchmark?

The primary risk to taxpayer funds lies in the potential for overpayment if the awarded price cannot be fully justified by the scope and quality of services rendered. A $15.4M difference from the benchmark is substantial. Robust oversight and post-award performance monitoring are essential to ensure value for money and mitigate financial waste.

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

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Synergy Logistics Services, LLC

Address: 1828 SWIFT AVE STE 202, NORTH KANSAS CITY, MO, 64116

Business Categories: Category Business, Hispanic American Owned Business, Joint Venture Women Owned Small Business, Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $21,191,749

Exercised Options: $21,191,749

Current Obligation: $21,191,749

Actual Outlays: $5,200,389

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP330020D5001

IDV Type: IDC

Timeline