DoD awards $5.6M for warehousing and distribution, with Synergy Logistics Services II LLC securing the contract

Contract Overview

Contract Amount: $5,579,829 ($5.6M)

Contractor: Synergy Logistics Services II LLC

Awarding Agency: Department of Defense

Start Date: 2025-05-01

End Date: 2025-07-31

Contract Duration: 91 days

Daily Burn Rate: $61.3K/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 $5.6 million to SYNERGY LOGISTICS SERVICES II LLC for work described as: SERVICES TO PERFORM WAREHOUSING AND DISTRIBUTION OPERATIONS Key points: 1. The contract's fixed-price incentive structure aims to balance cost control with performance, though monitoring is key. 2. Competition was full and open after exclusion of sources, suggesting a potentially competitive bidding process. 3. The short performance period of 91 days indicates a focused, short-term operational need. 4. Geographic focus on North Carolina for warehousing and distribution operations. 5. The contract value is modest within the broader context of DoD logistics spending. 6. The primary service is general warehousing and storage, a foundational logistical function.

Value Assessment

Rating: good

The contract value of approximately $5.6 million for a 91-day period for warehousing and distribution services appears reasonable. Benchmarking against similar short-term logistics contracts within the DoD would provide a more precise value-for-money assessment. The fixed-price incentive (FPI) pricing structure suggests an expectation of cost efficiencies, but the ultimate value will depend on performance against targets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was broad, specific sources may have been excluded based on pre-defined criteria. The number of bidders is not specified, but the 'full and open' nature suggests a deliberate effort to solicit a wide range of offers, which generally promotes price discovery and competitive pricing.

Taxpayer Impact: A competitive bidding process, even with exclusions, is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and terms to win the contract.

Public Impact

The Department of Defense benefits from essential warehousing and distribution services to support its operations. Military personnel and associated supply chains will receive logistical support through these services. The services are geographically focused within North Carolina. The contract supports jobs within the logistics and warehousing sector in North Carolina.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if performance targets in the FPI contract are not met efficiently.
The exclusion of certain sources, even in a full and open competition, warrants understanding the rationale to ensure fairness and maximum competition.
Short contract duration may limit opportunities for long-term strategic improvements in logistics processes.

Positive Signals

Synergy Logistics Services II LLC is a known entity in providing logistics support.
The fixed-price incentive structure can drive efficiency and cost savings if managed well.
The contract addresses a clear and immediate need for warehousing and distribution.

Sector Analysis

This contract falls within the General Warehousing and Storage sector (NAICS 493110), a critical component of the broader logistics and supply chain industry. The defense logistics market is substantial, with agencies like the Defense Logistics Agency (DLA) managing vast networks of storage and distribution facilities. Spending in this area is essential for maintaining operational readiness. Comparable spending benchmarks would involve analyzing other DLA contracts for similar warehousing services, considering factors like facility size, inventory volume, and service complexity.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if Synergy Logistics Services II LLC chooses to engage them. Without specific subcontracting plans or goals outlined in the award, it's difficult to assess the direct impact on the small business ecosystem for this particular contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Logistics Agency (DLA), which is responsible for ensuring contractors meet the terms and conditions of their agreements. Accountability measures are embedded within the contract's performance standards and the fixed-price incentive structure. Transparency is generally facilitated through contract award databases, though specific performance metrics and detailed financial reporting may be internal to the agency and contractor.

Related Government Programs

Defense Logistics Agency Warehousing Contracts
Department of Defense Supply Chain Management
General Warehousing and Storage Services
Fixed-Price Incentive Contracts

Risk Flags

Potential for cost overruns under FPI structure
Effectiveness of 'exclusion of sources' on competition level
Short contract duration may limit long-term efficiency gains

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.6 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 $5.6 million.

What is the period of performance?

Start: 2025-05-01. End: 2025-07-31.

What is the track record of Synergy Logistics Services II LLC in performing similar warehousing and distribution contracts for the Department of Defense?

Synergy Logistics Services II LLC has a history of performing logistics and distribution services. While specific details on past DoD contracts are not provided in this data snippet, their presence as a contractor suggests prior experience. A deeper dive into their contract history, including past performance evaluations, on-time delivery rates, and any past disputes or contract modifications, would be necessary to fully assess their track record for this specific type of service. Examining awards from the Defense Logistics Agency (DLA) or other DoD components would be crucial for a comprehensive understanding of their capabilities and reliability in fulfilling similar requirements.

How does the awarded price compare to market rates for similar warehousing and distribution services in North Carolina?

Benchmarking the $5.6 million contract value against market rates for similar warehousing and distribution services in North Carolina requires detailed analysis of the scope of work, facility size, inventory volume, labor costs, and duration. Given the 91-day performance period, the cost per day is approximately $61,317. This figure needs to be compared with prevailing commercial rates for comparable services in the region. Factors such as specialized storage requirements (e.g., temperature control), security needs, and the level of technology integration (e.g., warehouse management systems) will significantly influence market rates. Without specific details on these factors, a precise comparison is challenging, but the provided data suggests a significant operational scale is anticipated for the short duration.

What are the primary risks associated with this fixed-price incentive (FPI) contract, and how are they being mitigated?

The primary risks with an FPI contract involve potential cost overruns if the contractor fails to meet performance targets efficiently, leading to higher final prices within the incentive structure. Conversely, if targets are too easily met, the government might pay more than necessary. Mitigation strategies typically include clearly defined performance metrics, realistic target costs, and well-structured incentive clauses that reward efficiency without excessively penalizing the contractor or overpaying the government. The Defense Logistics Agency (DLA) would oversee adherence to these clauses and monitor performance closely. The short duration of this contract may also introduce risks related to rapid ramp-up and potential disruptions if the transition is not seamless.

How effective is the 'Full and Open Competition After Exclusion of Sources' approach in ensuring competitive pricing for this contract?

The 'Full and Open Competition After Exclusion of Sources' approach aims to balance broad competition with specific requirements or capabilities. Its effectiveness in ensuring competitive pricing depends heavily on the justification for excluding sources and the number of bidders that ultimately participate. If the exclusions were narrowly defined and relevant to essential capabilities, and if a sufficient number of qualified bidders still competed, it can lead to competitive pricing. However, if the exclusions were overly broad or if only a few bidders remained, the competitive pressure might be reduced, potentially leading to less favorable pricing for the government compared to unrestricted full and open competition.

What is the historical spending pattern for warehousing and distribution services by the Defense Logistics Agency in North Carolina?

Historical spending patterns for warehousing and distribution services by the Defense Logistics Agency (DLA) in North Carolina are not detailed in the provided data. However, DLA consistently spends significant amounts on logistics and supply chain support across various regions to maintain military readiness. Analyzing DLA's historical contract awards for similar services within North Carolina over the past several fiscal years would reveal trends in contract values, durations, and types of services procured. This would help contextualize the current $5.6 million award and assess whether it aligns with historical spending levels or represents an increase or decrease in demand for these services in the region.

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: $5,579,829

Exercised Options: $5,579,829

Current Obligation: $5,579,829

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