DoD's $11.8M contract for warehousing services awarded to Walsingham Group Inc. shows strong competition

Contract Overview

Contract Amount: $11,817,651 ($11.8M)

Contractor: Walsingham Group Inc

Awarding Agency: Department of Defense

Start Date: 2019-10-01

End Date: 2028-10-01

Contract Duration: 3,288 days

Daily Burn Rate: $3.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8506741454!DFSP CHARLESTON

Place of Performance

Location: FAYETTEVILLE, CUMBERLAND County, NORTH CAROLINA, 28304

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $11.8 million to WALSINGHAM GROUP INC for work described as: 8506741454!DFSP CHARLESTON Key points: 1. The contract's value of over $11.8 million over its potential 10-year duration suggests a significant need for warehousing and storage services. 2. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a robust bidding process, likely driving competitive pricing. 3. The firm fixed-price contract type generally transfers risk to the contractor, potentially leading to more predictable costs. 4. The Defense Logistics Agency's reliance on this contract highlights its critical role in supporting military logistics. 5. The North Carolina location for the service delivery is a key geographic factor for this contract. 6. The absence of small business set-aside flags suggests larger prime contractors are likely involved, with potential subcontracting opportunities.

Value Assessment

Rating: good

The total contract value of $11.8 million over a maximum of 10 years averages approximately $1.18 million annually. Benchmarking this against similar warehousing and storage contracts within the Department of Defense is challenging without more specific service details. However, the firm fixed-price nature suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. The competitive award process also implies that the pricing achieved is likely aligned with market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while initial solicitations may have had limitations, the final award was made after a broad competitive process. The presence of 9 bidders suggests a healthy level of interest and competition for this requirement. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions.

Taxpayer Impact: The strong competition among 9 bidders is beneficial for taxpayers, as it likely drove down the final contract price and ensured the government received good value for its investment in warehousing and storage services.

Public Impact

Military personnel and operations relying on the Department of Defense will benefit from efficient and reliable warehousing and storage. The contract ensures the availability of essential logistical support services for national defense. Services are likely concentrated in North Carolina, impacting the local economy and workforce in that region. The contract supports jobs within the warehousing and logistics sector, potentially creating or sustaining employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep if contract scope expands beyond initial fixed-price parameters.
Dependence on a single contractor for critical logistics functions could pose a risk if performance falters.
Geographic concentration in North Carolina might limit flexibility for other DoD installations.
The 'after exclusion of sources' aspect warrants scrutiny to ensure no viable sources were unfairly excluded.
Long contract duration (up to 10 years) could lead to technological obsolescence if not managed proactively.

Positive Signals

Firm fixed-price contract structure aligns incentives for cost control with the contractor.
High number of bidders (9) indicates strong market interest and competitive pressure.
Awarded by the Defense Logistics Agency, a specialized agency focused on efficient supply chain management.
Contract duration provides stability and predictability for essential logistics support.
The specific NAICS code (493190) suggests a focus on specialized warehousing services.

Sector Analysis

The warehousing and storage sector is a critical component of the broader logistics and supply chain industry, supporting various government and commercial operations. The North American Industry Classification System (NAICS) code 493190, 'Other Warehousing and Storage,' encompasses a wide range of non-specialized storage facilities. Federal spending in this sector is substantial, driven by the needs of agencies like the Department of Defense for storing equipment, supplies, and materials. Comparable spending benchmarks would typically be assessed based on the volume, type of goods stored, and duration of storage, with firm fixed-price contracts aiming to cap these costs.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. The prime contractor, Walsingham Group Inc., is a small business itself, which is noteworthy. However, the absence of a specific set-aside for this large contract suggests that the primary award was not targeted towards small businesses. This could mean that subcontracting opportunities may be available for small businesses to fulfill parts of the warehousing and storage requirements, but this is not guaranteed by the contract's structure. Further analysis of subcontracting plans would be needed to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA), which is responsible for managing and administering contracts for logistics support. Accountability measures are embedded in the firm fixed-price contract type, which obligates the contractor to deliver services at the agreed-upon price. Transparency is facilitated through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Defense Logistics Agency Supply Chain Management
Department of Defense Warehousing and Storage Contracts
Federal Logistics and Transportation Services
Government Contract Management

Risk Flags

Contract duration may exceed the pace of technological change in warehousing.
Potential for performance issues impacting critical military logistics.
Need to verify fairness of 'exclusion of sources' in competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.8 million to WALSINGHAM GROUP INC. 8506741454!DFSP CHARLESTON

Who is the contractor on this award?

The obligated recipient is WALSINGHAM GROUP INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.8 million.

What is the period of performance?

Start: 2019-10-01. End: 2028-10-01.

What is the track record of Walsingham Group Inc. in performing similar federal contracts, particularly within the Department of Defense?

Walsingham Group Inc. has a history of performing federal contracts, including those with the Department of Defense. While this specific contract is for a significant amount and duration, their past performance data, available through federal procurement databases, would indicate their experience with similar services. Analyzing their past contract awards, completion success rates, and any reported performance issues or awards would provide a clearer picture of their reliability and capability in executing large-scale warehousing and storage requirements. It's important to note that as a small business, their portfolio might differ in scale from larger prime contractors, but their ability to secure this competitive award suggests a demonstrated capacity.

How does the awarded price compare to industry benchmarks for similar warehousing and storage services, considering the contract's scope and duration?

Determining an exact price benchmark without granular details on the specific services (e.g., type of goods, climate control, security levels, inventory management) and geographic location is challenging. However, the firm fixed-price nature of this $11.8 million contract over up to 10 years suggests the Defense Logistics Agency sought to lock in costs. The competitive bidding process, with 9 bidders, is a strong indicator that the price achieved is likely favorable and aligned with market rates. To perform a precise benchmark, one would need to compare the per-square-foot storage costs, handling fees, and other associated service charges against publicly available data for similar government or large commercial warehousing contracts in the region.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Key risks include potential performance failures by the contractor, leading to disruptions in military supply chains. The long duration (up to 10 years) also presents a risk of technological obsolescence in warehousing practices or equipment if not managed proactively. Furthermore, the 'after exclusion of sources' aspect of the competition warrants scrutiny to ensure no viable bidders were unfairly prevented from participating. Mitigation strategies likely include robust performance monitoring by the DLA, clear contract deliverables and service level agreements, and contingency planning for contractor default. Regular contract reviews and potential for contract modifications to incorporate new technologies or address changing needs would also be part of risk management.

How effective is the Defense Logistics Agency in managing large warehousing contracts to ensure optimal value and operational readiness?

The Defense Logistics Agency (DLA) is a specialized agency tasked with providing global logistics support to the U.S. military. Its effectiveness in managing large warehousing contracts is generally considered high due to its expertise, established processes, and focus on supply chain efficiency. DLA's success is often measured by its ability to maintain inventory accuracy, ensure timely delivery of goods, and control costs. The competitive nature of this award, along with the firm fixed-price structure, suggests DLA is employing standard best practices to secure value. Continuous oversight, performance metrics, and feedback mechanisms are crucial for ensuring ongoing effectiveness.

What are the historical spending patterns for similar warehousing and storage services by the Department of Defense, and how does this contract fit within that trend?

The Department of Defense historically spends billions annually on logistics and supply chain services, including warehousing and storage. Spending in this category fluctuates based on global operational tempo, inventory management strategies, and infrastructure investments. This $11.8 million contract represents a specific, albeit significant, allocation for warehousing needs, likely tied to a particular region or set of assets. Analyzing DLA's historical budget allocations and contract awards for warehousing over the past 5-10 years would reveal trends in demand, pricing, and contractor utilization. This contract appears to be a standard, competitively awarded requirement within the DoD's ongoing need for robust logistical support.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › Other Warehousing and Storage

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SPE60319R0507

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2019 VALLEYGATE DRIVE, SUITE 201, FAYETTEVILLE, NC, 28304

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $18,018,021

Exercised Options: $11,817,651

Current Obligation: $11,817,651

Actual Outlays: $2,749,869

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline