DoD's $25.4M Logistics Support Contract with Integrated Logistics Solutions Raises Questions on Value and Competition

Contract Overview

Contract Amount: $25,388,283 ($25.4M)

Contractor: Integrated Logistics Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-05-31

End Date: 2021-09-10

Contract Duration: 3,389 days

Daily Burn Rate: $7.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: AMCOM FLEET MANAGEMENT CENTER CENTRALIZED DISTRIBUTION ACTIVITIES TO PROVIDE RESPONSIVE OPERATIONAL LOGISTICS SUPPORT TO AMC MANAGED SYSTEMS. THIS CONSISTS OF THE FULL SPECTRUM OF MATERIEL MANAGEMENT TASKS ASSOCIATED WITH THE MANAGEMENT, OPERATION, AND OVERSIGHT OF FORWARD WHOLESALE DEPOT ACTIVITIES.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35805

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $25.4 million to INTEGRATED LOGISTICS SOLUTIONS, INC. for work described as: AMCOM FLEET MANAGEMENT CENTER CENTRALIZED DISTRIBUTION ACTIVITIES TO PROVIDE RESPONSIVE OPERATIONAL LOGISTICS SUPPORT TO AMC MANAGED SYSTEMS. THIS CONSISTS OF THE FULL SPECTRUM OF MATERIEL MANAGEMENT TASKS ASSOCIATED WITH THE MANAGEMENT, OPERATION, AND OVERSIGHT OF FORWARD WHOLE… Key points: 1. The contract awarded to Integrated Logistics Solutions, Inc. for $25.4M covers extensive materiel management and operational logistics support for Army systems. 2. The procurement method, 'Full and Open Competition After Exclusion of Sources,' suggests potential limitations in the competitive landscape. 3. The contract type, Cost Plus Fixed Fee (CPFF), can lead to cost overruns if not closely monitored, posing a risk to taxpayer funds. 4. The duration of the contract (over 9 years) and its significant value warrant scrutiny regarding ongoing necessity and market competitiveness.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee structure for a contract of this duration and value requires rigorous oversight to ensure costs remain reasonable and aligned with performance. Without detailed cost breakdowns and benchmarks, assessing the true value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The 'Full and Open Competition After Exclusion of Sources' indicates that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders and impacting price discovery. This method needs justification to ensure it served the government's best interest.

Taxpayer Impact: The extended duration and CPFF structure of this contract, coupled with potentially limited competition, could result in higher costs for taxpayers than a more competitively bid, fixed-price contract.

Public Impact

Taxpayers may be paying more than necessary due to the contract's structure and limited competition. The long-term nature of the contract could stifle innovation and prevent the adoption of more efficient logistics solutions. Operational readiness of Army systems may be impacted if the logistics support is not cost-effective or if the contractor faces challenges.

Waste & Efficiency Indicators

Waste Risk Score: 70 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Limited competition indicated by procurement method
Long contract duration (over 9 years)
Lack of clear performance metrics in provided data

Positive Signals

Provides essential operational logistics support
Awarded to a single contractor, potentially simplifying management
Contractor has a significant history with the agency (implied by duration)

Sector Analysis

This contract falls within the General Warehousing and Storage sector, which is critical for defense logistics. Spending in this area is substantial, and efficiency is paramount. Benchmarks for similar long-term, comprehensive logistics support contracts are essential for evaluating this award.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). Analysis should explore if opportunities were missed to engage small businesses in subcontracting or if the scope inherently favored larger, established providers.

Oversight & Accountability

The long duration and CPFF nature of this contract necessitate robust oversight from the Department of Defense to ensure cost control, performance standards, and adherence to contract terms. Regular audits and performance reviews are crucial.

Related Government Programs

General Warehousing and Storage
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Limited competition may have inflated costs
Long contract duration raises questions about sustained value
Lack of transparency on specific performance metrics
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.4 million to INTEGRATED LOGISTICS SOLUTIONS, INC.. AMCOM FLEET MANAGEMENT CENTER CENTRALIZED DISTRIBUTION ACTIVITIES TO PROVIDE RESPONSIVE OPERATIONAL LOGISTICS SUPPORT TO AMC MANAGED SYSTEMS. THIS CONSISTS OF THE FULL SPECTRUM OF MATERIEL MANAGEMENT TASKS ASSOCIATED WITH THE MANAGEMENT, OPERATION, AND OVERSIGHT OF FORWARD WHOLESALE DEPOT ACTIVITIES.

Who is the contractor on this award?

The obligated recipient is INTEGRATED LOGISTICS SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $25.4 million.

What is the period of performance?

Start: 2012-05-31. End: 2021-09-10.

What specific justifications were provided for excluding certain sources from the 'Full and Open Competition' and how did this impact the final price?

The justification for excluding sources in a 'Full and Open Competition After Exclusion of Sources' typically relates to specific technical requirements, existing infrastructure, or unique capabilities that only a limited number of contractors possess. This exclusion can reduce competition, potentially leading to higher prices than if a broader range of bidders were involved. A thorough review would examine the documented rationale and compare the awarded price against market rates for similar services.

How does the Cost Plus Fixed Fee structure for this extensive logistics support contract ensure cost efficiency and prevent potential overruns over its multi-year duration?

The CPFF structure inherently carries a risk of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. Ensuring cost efficiency requires stringent government oversight, detailed cost tracking, and clear performance metrics. Regular audits and negotiations are vital to manage the 'cost' portion effectively. The 'fixed fee' provides some incentive for the contractor to control costs, but the overall effectiveness depends heavily on the government's management and the clarity of the contract's scope.

What are the key performance indicators (KPIs) for this contract, and how has Integrated Logistics Solutions, Inc. performed against them over the contract's lifespan?

Key performance indicators for a contract of this nature would likely include metrics related to delivery timeliness, inventory accuracy, equipment readiness support, cost control, and overall customer satisfaction within the AMCOM Fleet Management Center. Without access to performance reports and specific KPIs, it's impossible to definitively assess the contractor's effectiveness. A review of past performance evaluations and any incurred penalties or awards would provide insight into their track record.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › General 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: W31P4Q10R0197

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3317 TRIANA BLVD SW, HUNTSVILLE, AL, 35805

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $38,098,715

Exercised Options: $25,388,283

Current Obligation: $25,388,283

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline