DoD's $23.7M OCONUS storage contract awarded to MINA GROUP FZCO raises value-for-money questions
Contract Overview
Contract Amount: $23,697,761 ($23.7M)
Contractor: Mina Group Fzco
Awarding Agency: Department of Defense
Start Date: 2024-02-14
End Date: 2026-05-09
Contract Duration: 815 days
Daily Burn Rate: $29.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: 8510418636!OCONUS COCO STORAGE SERVICES
Plain-Language Summary
Department of Defense obligated $23.7 million to MINA GROUP FZCO for work described as: 8510418636!OCONUS COCO STORAGE SERVICES Key points: 1. The contract's value appears high relative to its duration and scope, suggesting potential overpayment. 2. Limited competition may have contributed to a less favorable price for the government. 3. The firm-fixed-price structure shifts risk to the contractor, but oversight is needed to ensure performance. 4. This contract supports critical logistics operations in overseas locations. 5. The Defense Logistics Agency's reliance on this service highlights the importance of secure storage abroad.
Value Assessment
Rating: questionable
The contract's total value of $23.7 million over approximately 2.7 years (815 days) averages to about $8.7 million per year. This annual cost seems substantial for storage services, especially when considering the per-day cost of approximately $28,800. Benchmarking against similar OCONUS warehousing contracts is difficult without more specific service details, but the overall expenditure warrants scrutiny to ensure it aligns with market rates and actual service delivery needs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is generally positive for price discovery. However, only two bids were received, indicating a potentially limited pool of qualified offerors for this specialized OCONUS service. While competition existed, the low number of bidders might have constrained the downward pressure on pricing.
Taxpayer Impact: A limited number of bidders, even in a full and open competition, can mean taxpayers may not have received the most competitive pricing possible.
Public Impact
The primary beneficiaries are the Department of Defense and its personnel operating in overseas locations, who rely on secure and accessible storage. The contract provides essential warehousing and storage services, crucial for maintaining operational readiness and supply chain integrity. Geographic impact is focused on OCONUS (Outside Continental United States) regions, supporting military deployments and operations. Workforce implications are likely minimal for the government, as the service is contracted out, but the contractor will employ personnel for service delivery.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if service requirements expand beyond initial scope.
- Risk of performance issues if contractor's operational capacity is insufficient for OCONUS demands.
- Dependency on a single contractor for critical overseas logistics infrastructure.
Positive Signals
- Firm-fixed-price contract shifts performance risk to the contractor.
- Awarded through full and open competition, suggesting an attempt to maximize value.
- Contract duration provides stability for essential logistics support.
Sector Analysis
This contract falls within the broader logistics and support services sector, specifically focusing on warehousing and storage. The market for OCONUS logistics is specialized, often involving unique security, regulatory, and operational challenges. Comparable spending benchmarks are difficult to establish without detailed service scope, but government spending on overseas logistics infrastructure is substantial, driven by global military presence and operational requirements.
Small Business Impact
The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). There is no information provided regarding subcontracting plans. This suggests that the primary awardee is likely a larger entity, and the contract's direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.
Oversight & Accountability
The contract is a definitive contract awarded by the Defense Logistics Agency, implying established oversight processes. As a firm-fixed-price contract, performance monitoring and compliance checks are key oversight mechanisms. Transparency is generally provided through contract award databases, but detailed performance reports and specific oversight activities are typically internal to the agency. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Defense Logistics Agency Warehousing Contracts
- OCONUS Logistics Support Services
- Global Storage Solutions Contracts
- Military Supply Chain Management
Risk Flags
- Limited competition (2 bidders)
- High annual cost for storage services
- OCONUS operational complexities
Tags
defense, department-of-defense, defense-logistics-agency, oconus, storage-services, warehousing, definitive-contract, firm-fixed-price, full-and-open-competition, logistics, international
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.7 million to MINA GROUP FZCO. 8510418636!OCONUS COCO STORAGE SERVICES
Who is the contractor on this award?
The obligated recipient is MINA GROUP FZCO.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $23.7 million.
What is the period of performance?
Start: 2024-02-14. End: 2026-05-09.
What is the track record of MINA GROUP FZCO with government contracts, particularly for logistics and storage services?
Information regarding MINA GROUP FZCO's specific track record with government contracts, especially within the logistics and storage domain, is not readily available in the provided data snippet. A comprehensive analysis would require accessing federal procurement databases (like SAM.gov or FPDS) to review past performance, contract history, and any reported issues or accolades. Without this data, it's difficult to assess their experience level and reliability for fulfilling this OCONUS storage contract. Further investigation into their past performance is crucial for a complete risk assessment.
How does the annual cost of this contract compare to similar OCONUS storage services provided by other agencies or contractors?
Direct comparison of the annual cost of approximately $8.7 million for this OCONUS storage contract is challenging without detailed service scope and location specifics. Warehousing costs in overseas locations can vary significantly based on factors like security requirements, infrastructure availability, local labor costs, and geopolitical risks. To benchmark effectively, one would need to identify contracts with similar durations, storage capacities, security levels, and geographic regions. Publicly available data often lacks the granularity for precise comparisons, but a significant deviation from industry averages for comparable services would be a red flag.
What are the specific risks associated with providing storage services in OCONUS locations, and how are they mitigated in this contract?
Providing storage services in OCONUS locations entails several risks, including geopolitical instability, complex customs and import/export regulations, logistical challenges in remote areas, potential for theft or damage due to less secure environments, and currency fluctuations. This contract, being firm-fixed-price, shifts some operational risks to the contractor. However, the government retains oversight responsibility to ensure compliance with security protocols, timely delivery, and proper inventory management. The contract's duration (815 days) suggests a need for sustained operational capability. Mitigation strategies would typically involve stringent performance standards, regular inspections, and clear communication channels with the contractor.
What is the historical spending pattern for OCONUS storage services by the Defense Logistics Agency?
The provided data snippet does not include historical spending patterns for OCONUS storage services by the Defense Logistics Agency (DLA). To analyze this, one would need to examine DLA's procurement history over several fiscal years, identifying all contracts related to warehousing and storage in overseas locations. This would involve looking at contract values, durations, award types, and the number of bidders over time. Understanding historical spending can reveal trends, identify periods of increased or decreased reliance on contracted services, and help contextualize the current contract's value and scope within the agency's broader logistics strategy.
Given only two bidders, what is the likelihood that the government secured the best possible price for these services?
With only two bidders in a full and open competition, the likelihood that the government secured the absolute best possible price is reduced compared to a scenario with numerous competitive offers. While two bidders indicate some level of competition, it suggests a potentially limited market or high barriers to entry for this specific OCONUS storage service. The government may have received a fair price, but the lack of broader competition means there's a higher probability that a more aggressive pricing strategy from additional bidders could have driven the cost down further. This scenario warrants careful review of the awarded price against any available benchmarks.
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
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: SP060000R0518
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: OFFICE 404B, BUILDING 1, EAST WING, DUBAI AIRPORT FREEZ, DUBAI
Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $23,697,761
Exercised Options: $23,697,761
Current Obligation: $23,697,761
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2024-02-14
Current End Date: 2026-05-09
Potential End Date: 2026-05-09 00:00:00
Last Modified: 2025-10-21
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