DoD's $29.6M protective goggles contract awarded to Federal Resources Supply Company, LLC, lacked competition

Contract Overview

Contract Amount: $29,030,246 ($29.0M)

Contractor: Federal Resources Supply Company, LLC

Awarding Agency: Department of Defense

Start Date: 2020-06-09

End Date: 2020-09-15

Contract Duration: 98 days

Daily Burn Rate: $296.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 4550171950!PROTECTIVE MEDICAL GOGGLES

Place of Performance

Location: STEVENSVILLE, QUEEN ANNES County, MARYLAND, 21666

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $29.0 million to FEDERAL RESOURCES SUPPLY COMPANY, LLC for work described as: 4550171950!PROTECTIVE MEDICAL GOGGLES Key points: 1. The contract for protective medical goggles was awarded without competition, raising concerns about potential overpricing and limited value for money. 2. The sole-source nature of this award limits opportunities for price discovery and may not reflect the best market value. 3. A short performance period of 98 days suggests an urgent need, but the lack of competition is a persistent risk indicator. 4. The contract falls under the 'Service Establishment Equipment and Supplies Merchant Wholesalers' category, indicating a focus on procurement and distribution. 5. The award to a single vendor, Federal Resources Supply Company, LLC, warrants scrutiny regarding their capacity and pricing strategy.

Value Assessment

Rating: questionable

The contract's value of $29.6 million for protective medical goggles, awarded on a firm-fixed-price basis, is difficult to benchmark due to the sole-source nature of the procurement. Without competitive bids, it's challenging to ascertain if the pricing reflects fair market value or if taxpayers received the best possible deal. The absence of comparison data from other vendors makes a definitive value-for-money assessment problematic. Further analysis would be needed to compare unit costs against similar government or commercial purchases, if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source procurement method, meaning only one vendor, Federal Resources Supply Company, LLC, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means there was no opportunity for price negotiation or comparison among different suppliers, potentially leading to higher costs for the government.

Taxpayer Impact: The sole-source award means taxpayers did not benefit from the cost savings that typically arise from a competitive bidding process. This could result in a higher overall expenditure for the required protective equipment.

Public Impact

The primary beneficiaries of this contract are likely military personnel and other Department of Defense (DoD) entities requiring protective medical goggles. The contract ensures the supply of essential personal protective equipment (PPE) to safeguard personnel health and safety. The geographic impact is primarily within the United States, supporting DoD operations and readiness. Workforce implications are minimal, as this contract focuses on the supply of goods rather than services requiring significant labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for taxpayer dollars.
Sole-source awards can indicate potential issues with market research or vendor lock-in.
The short duration of the contract (98 days) might suggest a reactive procurement rather than strategic planning.

Positive Signals

The contract ensures the timely provision of critical protective equipment, addressing an immediate need.
Firm-fixed-price contracts offer cost certainty to the government, assuming the initial price is fair.
The award to a single, established supplier could indicate confidence in their ability to meet urgent requirements.

Sector Analysis

The procurement of protective medical goggles falls within the broader healthcare and defense supply chain sectors. The market for personal protective equipment (PPE) saw significant fluctuations and increased demand, particularly around the contract award date in 2020. While specific market size data for medical goggles is not provided, the overall PPE market is substantial. This contract represents a direct procurement by the Department of Defense to meet its operational needs, rather than a broader healthcare system purchase.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to Federal Resources Supply Company, LLC, a single entity, does not appear to directly benefit the small business ecosystem in this instance. Further investigation would be needed to determine if the prime contractor has a history of engaging small businesses for subcontracting opportunities on other contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. The Defense Contract Management Agency (DCMA) likely plays a role in contract administration. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process more challenging. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Medical Supplies
Personal Protective Equipment Procurement
Federal Supply Schedule Contracts
Emergency Procurement Procedures

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited value for money assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.0 million to FEDERAL RESOURCES SUPPLY COMPANY, LLC. 4550171950!PROTECTIVE MEDICAL GOGGLES

Who is the contractor on this award?

The obligated recipient is FEDERAL RESOURCES SUPPLY COMPANY, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.0 million.

What is the period of performance?

Start: 2020-06-09. End: 2020-09-15.

What is the track record of Federal Resources Supply Company, LLC with the Department of Defense?

Federal Resources Supply Company, LLC has a history of receiving contracts from various government agencies, including the Department of Defense. Their contract portfolio often includes medical supplies, equipment, and logistical support. Analyzing their past performance, including on-time delivery, quality of goods, and adherence to contract terms, is crucial for assessing their reliability. While this specific contract was sole-source, their broader contract history with the DoD can provide insights into their capabilities and pricing patterns on competitively awarded contracts, if any exist. A review of their performance ratings and any past disputes or corrective actions would offer a more comprehensive understanding of their track record.

How does the unit cost of these protective goggles compare to similar government or commercial purchases?

Direct comparison of the unit cost for these protective goggles is challenging due to the sole-source nature of this $29.6 million contract awarded to Federal Resources Supply Company, LLC. Without competitive bids, there is no benchmark price established through a bidding process. To assess value, one would need to research historical government purchases of similar goggles, consult commercial market prices from other suppliers, or examine pricing data from contracts awarded under competitive solicitations. Factors such as specific technical requirements, quantity, and delivery timelines can influence unit costs, making precise comparisons difficult without detailed product specifications and market intelligence.

What are the primary risks associated with awarding a contract of this magnitude without competition?

The primary risks associated with awarding a $29.6 million contract without competition include potential overpayment due to the lack of price negotiation, reduced incentive for the contractor to offer the best value, and the possibility of receiving substandard quality if vendor vetting was insufficient. It also raises concerns about market transparency and fairness, potentially discouraging other capable vendors from participating in future solicitations. Furthermore, sole-source awards can sometimes indicate a lack of adequate market research or an over-reliance on a single supplier, which can create vulnerabilities in the supply chain. The government may miss out on innovative solutions or cost-saving opportunities that a competitive process would likely uncover.

What was the specific need or justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. Typically, sole-source procurements require a justification, often citing reasons such as urgency of need where competition is not feasible, unique capabilities of a single vendor, or specific national security requirements. For a contract awarded in mid-2020 for protective medical goggles, the justification likely relates to the unprecedented demand and supply chain disruptions caused by the COVID-19 pandemic, necessitating rapid acquisition of essential personal protective equipment. However, without the official justification document, the precise rationale remains speculative.

How does this spending compare to historical federal spending on protective medical equipment?

Historical federal spending on protective medical equipment, particularly goggles, can vary significantly year over year, influenced by global health events, military readiness requirements, and specific agency needs. Prior to 2020, spending on such items might have been relatively stable and predictable. However, the onset of the COVID-19 pandemic in 2020 led to an exponential surge in demand and spending across all federal agencies, including the Department of Defense. This $29.6 million contract, awarded in June 2020, likely represents a fraction of the overall surge in federal PPE spending during that period. A comprehensive analysis would require examining historical spending data for relevant PSC codes (Product and Service Codes) across multiple agencies over several fiscal years.

Industry Classification

NAICS: Wholesale Trade › Machinery, Equipment, and Supplies Merchant Wholesalers › Service Establishment Equipment and Supplies Merchant Wholesalers

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: FRS Holdings, Inc. (UEI: 091235377)

Address: 235-G LOG CANOE CIR, STEVENSVILLE, MD, 21666

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,030,246

Exercised Options: $29,030,246

Current Obligation: $29,030,246

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE8EJ20D0013

IDV Type: IDC

Timeline