DoD's $16.8M container contract with Choctaw Manufacturing shows limited competition and fair value

Contract Overview

Contract Amount: $16,820,473 ($16.8M)

Contractor: Choctaw Manufacturing and Development Corporation

Awarding Agency: Department of Defense

Start Date: 2008-05-28

End Date: 2013-04-12

Contract Duration: 1,780 days

Daily Burn Rate: $9.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CNU332 A/E CONTAINER

Place of Performance

Location: HUGO, CHOCTAW County, OKLAHOMA, 74743

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to CHOCTAW MANUFACTURING AND DEVELOPMENT CORPORATION for work described as: CNU332 A/E CONTAINER Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pressure on pricing. 2. While the contract duration was substantial, the per-unit cost appears reasonable given the specialized nature of the product. 3. The firm-fixed-price structure shifts some risk to the contractor. 4. The award to a single entity suggests potential consolidation or specific capabilities required. 5. Performance context is limited without specific delivery or quality metrics. 6. The contract falls within the 'Other Metal Container Manufacturing' NAICS code, indicating a niche industrial product.

Value Assessment

Rating: fair

The contract's value of $16.8 million over approximately five years represents a significant investment in specialized containers. Benchmarking against similar sole-source contracts is challenging due to the lack of publicly available comparable data. However, the firm-fixed-price award suggests that the government sought to control costs upfront. Without detailed specifications or market analysis, a definitive value-for-money assessment is difficult, but the price does not appear exorbitant for a specialized defense-related item.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one responsible source can fulfill the requirement, or in cases of urgent need. The lack of competition means that potential cost savings from a bidding process were not realized. The government likely relied on pre-existing relationships, unique capabilities, or specific certifications held by Choctaw Manufacturing and Development Corporation to justify the sole-source award.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher costs for taxpayers compared to an open competition scenario.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Army, receiving specialized containers for operational needs. The services delivered involve the manufacturing and supply of 'Other Metal Containers'. The geographic impact is primarily centered around the contractor's location in Oklahoma, with potential downstream effects on local employment and supply chains. Workforce implications include direct employment at Choctaw Manufacturing and potentially within its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings for taxpayers.
Lack of competition may indicate a lack of market availability or a reliance on a single supplier.
Limited public data on performance metrics makes it difficult to assess overall effectiveness and efficiency.
The long contract duration without clear performance checkpoints could pose a risk if needs change or performance falters.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Award to a single entity may indicate specialized capabilities or a strategic supplier relationship.
The contract was awarded to a business located in Oklahoma, potentially supporting regional economic development.

Sector Analysis

The contract falls under the 'Other Metal Container Manufacturing' sector, a niche within the broader manufacturing industry. This sector often involves specialized production for specific industrial or defense applications. The market size for such specialized containers is likely limited, often driven by government procurement or specific industrial demands. This contract represents a significant portion of spending within this specific sub-sector for the awarding agency.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit information regarding subcontracting plans for small businesses. The award to a single entity, Choctaw Manufacturing and Development Corporation, does not inherently preclude subcontracting, but without specific requirements or reporting, its impact on the small business ecosystem is unclear. Further investigation into subcontracting goals would be needed for a comprehensive analysis.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver goods at the agreed-upon price. Transparency is limited due to the sole-source nature and the lack of detailed public performance data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency (DLA) procurements
Army Ammunition Plant support contracts
Specialized container manufacturing
Industrial base support contracts

Risk Flags

Sole-source award
Limited performance data available
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to CHOCTAW MANUFACTURING AND DEVELOPMENT CORPORATION. CNU332 A/E CONTAINER

Who is the contractor on this award?

The obligated recipient is CHOCTAW MANUFACTURING AND DEVELOPMENT CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2008-05-28. End: 2013-04-12.

What is the track record of Choctaw Manufacturing and Development Corporation with federal contracts?

Choctaw Manufacturing and Development Corporation (CMDC) has a history of federal contracting, primarily with the Department of Defense. Data indicates they have received multiple awards, including this significant sole-source contract for containers. Their performance history, as reflected in contract databases, suggests they are a capable supplier for specific defense needs. However, a deeper dive into past performance reviews, on-time delivery rates, and quality compliance would be necessary for a comprehensive assessment of their track record. The nature of their awards, often sole-source, might suggest a specialized niche or a long-standing relationship with the government.

How does the pricing of this contract compare to similar procurements?

Direct price comparison for this contract is challenging due to its sole-source nature and the specific 'Other Metal Container Manufacturing' classification. Without publicly available data on identical or highly similar container specifications procured competitively, establishing a precise benchmark is difficult. However, the firm-fixed-price (FFP) award indicates that the government aimed to lock in a price upfront, shifting cost-risk to the contractor. If comparable sole-source awards exist, they would be the most relevant benchmark, but these are often not as readily accessible. The absence of a competitive bidding process inherently limits the ability to ascertain if the price achieved represents the best possible value.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract include a lack of price competition, which could lead to higher costs for the government than if the contract were competed. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility or innovation. Furthermore, without robust performance metrics publicly available, assessing the contractor's adherence to quality standards and delivery schedules poses a challenge. The long duration of the contract (approximately five years) also introduces risks related to potential changes in government requirements or technological obsolescence.

How effective has this contract been in meeting the Department of the Army's needs for specialized containers?

Assessing the effectiveness of this contract in meeting the Department of the Army's needs is difficult without specific performance data. The contract was awarded in 2008 and completed in 2013, indicating a substantial period of supply. The fact that it was a sole-source award suggests a specific capability or requirement that Choctaw Manufacturing and Development Corporation was uniquely positioned to fulfill. However, the effectiveness is ultimately measured by whether the containers met the Army's operational specifications, were delivered on time, and performed as expected in their intended use. Publicly available information does not detail these specific outcomes.

What are the historical spending patterns for 'Other Metal Container Manufacturing' by the Department of Defense?

Historical spending patterns for 'Other Metal Container Manufacturing' by the Department of Defense can vary significantly based on specific military needs, technological advancements, and global operational requirements. This category, under NAICS code 332439, encompasses a range of metal containers, from small parts bins to large industrial or specialized transport containers. Spending in this area is often project-driven, tied to new equipment fielding, logistical support upgrades, or specific operational deployments. While this $16.8 million contract represents a notable investment, it needs to be viewed within the broader context of the DoD's overall procurement budget, which runs into hundreds of billions annually. Trends might show shifts towards lighter, more durable, or technologically integrated containers over time.

What is the significance of the 'firm fixed price' contract type in this context?

The 'firm fixed price' (FFP) contract type is significant because it establishes a ceiling price that the contractor must adhere to, regardless of their actual costs. This structure places the primary responsibility for managing costs and potential overruns on the contractor, Choctaw Manufacturing and Development Corporation. For the government, it offers budget certainty and protection against cost increases. This is particularly advantageous for procurements where the scope of work is well-defined and risks are manageable. In the context of this sole-source award, the FFP structure was likely chosen to ensure cost control in the absence of competitive pressure, making the government's financial exposure predictable.

Industry Classification

NAICS: Manufacturing › Boiler, Tank, and Shipping Container Manufacturing › Other Metal Container Manufacturing

Product/Service Code: CONTAINERS/PACKAGING/PACKING SUPPL

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J08R0051

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Choctaw Nation of Oklahoma (UEI: 080735806)

Address: 203 CHOCTAW INDUSTRIAL DR, HUGO, OK, 02

Business Categories: American Indian Owned Business, Category Business, Government, HUBZone Firm, Native American Tribal Government, Manufacturer of Goods, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,820,473

Exercised Options: $16,820,473

Current Obligation: $16,820,473

Contract Characteristics

Cost or Pricing Data: YES

Timeline