DoD awards $10.4M for logistics support, raising questions on value and competition

Contract Overview

Contract Amount: $10,370,147 ($10.4M)

Contractor: Eleit Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-07-22

End Date: 2026-01-20

Contract Duration: 2,374 days

Daily Burn Rate: $4.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: TASK ORDER AWARD FOR LOGISTICS SERVICES FOR TORFQ 2017L-5, SECURITY ASSISTANCE MANAGEMENT DIRECTORATE (SAMD)

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $10.4 million to ELEIT TECHNOLOGY, INC. for work described as: TASK ORDER AWARD FOR LOGISTICS SERVICES FOR TORFQ 2017L-5, SECURITY ASSISTANCE MANAGEMENT DIRECTORATE (SAMD) Key points: 1. Contract value appears reasonable given the duration and scope of logistics support. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. Risk indicators are moderate, with potential for cost overruns in time and materials contracts. 4. Performance context is within administrative and management consulting services. 5. Sector positioning is within defense logistics and support services.

Value Assessment

Rating: fair

The contract value of $10.4 million over approximately 6.5 years suggests an average annual spend of around $1.6 million. Benchmarking against similar logistics support contracts is difficult without more specific service details. However, the time and materials pricing model introduces inherent risk for cost control, as actual labor hours and material costs directly impact the total price. Without detailed performance metrics or comparison to industry standards for similar logistics functions, assessing the true value-for-money is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows 4 bids were received. A competitive process generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios. The presence of multiple bidders suggests a healthy market for these types of services.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it fosters a competitive environment, driving down prices and ensuring the government receives services at a fair market value.

Public Impact

The primary beneficiaries are the Department of the Army's Security Assistance Management Directorate (SAMD), receiving essential logistics support. Services delivered include administrative management and general management consulting related to logistics. The geographic impact is primarily within Alabama, where the contractor is located. Workforce implications may include the creation or maintenance of jobs within the contractor's organization, supporting the logistics sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and materials contract type can lead to cost overruns if not closely monitored.
Limited public information on specific performance metrics makes value assessment difficult.
The duration of the contract (over 6 years) requires sustained oversight to ensure continued value.

Positive Signals

Awarded under full and open competition, indicating a competitive process.
Contractor is based in Alabama, potentially supporting local employment.
The contract supports critical defense logistics functions.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, specifically supporting defense logistics. The market for such services is substantial, driven by government needs for operational efficiency and specialized support. Comparable spending benchmarks would typically involve analyzing other contracts for logistics management, supply chain support, and administrative services within the Department of Defense and other federal agencies. The size of this award is moderate within the broader context of federal contracting.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures would be tied to the contract's performance work statement and delivery schedules. Transparency is facilitated through contract award databases, but detailed performance reports and cost breakdowns are often not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Support Contracts
Security Assistance Program Management
Administrative and Management Consulting Services
Department of Defense Logistics Modernization

Risk Flags

Time and Materials contract type
Potential for cost overruns
Limited public performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.4 million to ELEIT TECHNOLOGY, INC.. TASK ORDER AWARD FOR LOGISTICS SERVICES FOR TORFQ 2017L-5, SECURITY ASSISTANCE MANAGEMENT DIRECTORATE (SAMD)

Who is the contractor on this award?

The obligated recipient is ELEIT TECHNOLOGY, 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 $10.4 million.

What is the period of performance?

Start: 2019-07-22. End: 2026-01-20.

What is the specific nature of the logistics services provided under this contract?

The contract is categorized under NAICS code 541611 (Administrative Management and General Management Consulting Services) and is described as 'TASK ORDER AWARD FOR LOGISTICS SERVICES FOR TORFQ 2017L-5, SECURITY ASSISTANCE MANAGEMENT DIRECTORATE (SAMD)'. While the broad category is logistics services, the specific tasks likely involve planning, coordinating, and managing the flow of goods, information, and resources for the Security Assistance Management Directorate. This could encompass supply chain management, inventory control, transportation coordination, and related administrative support functions critical to the directorate's operations. The exact deliverables and scope would be detailed in the task order's performance work statement, which is not publicly available in this data snippet.

How does the $10.4 million contract value compare to similar logistics support contracts for the Department of the Army?

Direct comparison of the $10.4 million contract value is challenging without knowing the precise scope and duration of services rendered. However, considering the contract's duration from July 2019 to January 2026 (approximately 6.5 years), the average annual expenditure is around $1.6 million. This figure is within a common range for specialized support services within large federal agencies like the Department of the Army. Contracts for broader logistics support or those involving extensive material management can range from hundreds of thousands to tens of millions annually. The 'fair' value assessment is contingent on the complexity and criticality of the specific logistics functions managed for the SAMD.

What are the primary risks associated with a Time and Materials (T&M) contract for logistics services?

The primary risk with Time and Materials (T&M) contracts, like this one, is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fee or profit. If labor hours are not diligently tracked and managed, or if material costs escalate unexpectedly, the total contract cost can exceed initial estimates. For the government, this necessitates robust oversight, detailed record-keeping, and strong management to ensure efficiency and prevent contractor inefficiencies from driving up costs. The absence of a ceiling on labor hours or material costs in a pure T&M structure heightens this risk.

What does the fact that 4 bids were received under full and open competition imply for price discovery?

Receiving 4 bids under a full and open competition signifies a healthy level of market interest and competition for the logistics services required by the Security Assistance Management Directorate. This implies that multiple companies possess the capability and are willing to compete for this type of work. From a price discovery perspective, having multiple bidders generally leads to more competitive pricing as each offeror seeks to win the contract. It suggests that the government is likely to receive offers that reflect a reasonable range of market prices, and the selection process can identify the best value proposition, balancing cost and technical factors, rather than being limited by a lack of viable alternatives.

What is the historical spending pattern for logistics services by the Security Assistance Management Directorate?

The provided data snippet does not include historical spending patterns for the Security Assistance Management Directorate (SAMD) or for this specific contract prior to its award in 2019. To analyze historical spending, one would need to access contract databases (like FPDS or USASpending) and search for previous contracts awarded to SAMD or its predecessors for similar logistics and administrative support services. Understanding past spending levels, contract types, and competition dynamics would provide crucial context for evaluating the current $10.4 million award, identifying trends, and assessing whether spending has increased, decreased, or remained consistent over time.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 2225 DRAKE AVE SUITE 7, HUNTSVILLE, AL, 35805

Business Categories: American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $63,369,365

Exercised Options: $10,370,147

Current Obligation: $10,370,147

Actual Outlays: $2,666

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS10F0310P

IDV Type: FSS

Timeline