DoD's $184M Marine Cargo Handling Contract Awarded to American United Logistics Without Competition

Contract Overview

Contract Amount: $18,446,550 ($18.4M)

Contractor: American United Logistics

Awarding Agency: Department of Defense

Start Date: 2008-09-30

End Date: 2010-03-31

Contract Duration: 547 days

Daily Burn Rate: $33.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 3PL UMM QASR PORT IN IRAQ

Plain-Language Summary

Department of Defense obligated $18.4 million to AMERICAN UNITED LOGISTICS for work described as: 3PL UMM QASR PORT IN IRAQ Key points: 1. Significant contract value awarded through a non-competitive process raises questions about potential cost efficiencies and market fairness. 2. The lack of competition suggests potential limitations in available qualified contractors or a strategic decision to sole-source. 3. The contract's duration of 547 days indicates a substantial, ongoing need for these services. 4. Fixed-price contract type aims to control costs, but without competition, the baseline for 'fixed' is less certain. 5. The award to a single contractor, American United Logistics, warrants scrutiny of their capacity and past performance. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to boost small business participation.

Value Assessment

Rating: questionable

The contract's total value of $184.4 million over approximately 18 months is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The firm fixed-price structure provides some cost certainty, but the absence of competition means there's no direct market validation of whether this price represents the best value achievable. Further analysis would require comparing the scope of services and unit rates to other logistics support contracts, particularly those awarded competitively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically justified when only one responsible source is available or when urgent and compelling circumstances prevent a competitive solicitation. The specific justification for this sole-source award is not detailed here, but it implies that the Department of the Army determined that American United Logistics was the only viable option or that the need was too immediate for a competitive process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to secure government contracts.

Public Impact

The primary beneficiaries are the U.S. Marines and other Department of Defense personnel who rely on efficient cargo handling operations. The contract delivers essential services for the movement and management of military cargo, crucial for operational readiness. The geographic impact is focused on deployment locations, specifically noted as 'PORT IN IRAQ', indicating support for overseas operations. Workforce implications include employment opportunities for personnel involved in logistics and cargo handling, both directly by the contractor and potentially through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for the government.
Sole-source awards can stifle innovation and limit market entry for potential competitors.
Dependence on a single contractor for critical logistics functions poses a risk if performance falters.
The specific justification for the sole-source award needs further examination to ensure it was appropriate.

Positive Signals

Firm fixed-price contract type helps to establish cost certainty.
The contractor, American United Logistics, was selected, implying they met the government's requirements.
The contract duration suggests a stable, ongoing need that the contractor is expected to fulfill.

Sector Analysis

The defense logistics sector is a critical component of military operations, encompassing a wide range of services from transportation and warehousing to cargo handling and supply chain management. This contract falls within the broader category of logistics and support services, which are essential for maintaining operational readiness in various theaters. The market for these services can be substantial, with numerous companies vying for contracts, though specialized capabilities like overseas port operations may have fewer qualified providers. Benchmarking would involve comparing this contract's value and scope to other large-scale logistics support contracts awarded by the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was either open to all responsible sources, or the specific requirements led to the selection of larger, established firms. Consequently, there are no direct subcontracting implications for small businesses mandated by a set-aside provision in this particular award. The absence of a small business focus in this large contract means that opportunities for small business participation would likely depend on the prime contractor's voluntary subcontracting efforts.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards, reporting requirements, and payment schedules tied to satisfactory performance. Transparency is generally facilitated through contract award databases like FPDS, where basic information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or reported.

Related Government Programs

Defense Logistics Agency (DLA) Contracts
Military Sealift Command Contracts
Army Materiel Command Contracts
Global Contingency Logistics Support

Risk Flags

Sole-source award without clear justification
Potential for inflated pricing due to lack of competition
Contract performance in a high-risk operational environment
Limited transparency on contractor past performance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.4 million to AMERICAN UNITED LOGISTICS. 3PL UMM QASR PORT IN IRAQ

Who is the contractor on this award?

The obligated recipient is AMERICAN UNITED LOGISTICS.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.4 million.

What is the period of performance?

Start: 2008-09-30. End: 2010-03-31.

What was the specific justification for awarding this $184M contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded as a 'SOLE-SOURCE'. While the specific justification is not detailed in the abbreviated data, sole-source awards are typically made under circumstances where only one responsible source can satisfy the agency's needs, or when there is an urgent and compelling need that prevents competition. For a contract of this magnitude, the justification would likely involve factors such as highly specialized capabilities possessed exclusively by American United Logistics, critical operational requirements in a specific theater (like 'PORT IN IRAQ'), or a time-sensitive situation where a competitive process would be impractical or detrimental to national security. A full review of the contract file and associated Justification and Approval (J&A) document would be necessary to ascertain the precise rationale.

How does the $184.4 million value compare to similar cargo handling contracts in the defense sector?

Benchmarking the $184.4 million value requires comparing it to similar large-scale, long-term cargo handling and port operations contracts within the Department of Defense. Contracts for services in operational theaters, especially those involving complex logistics and potentially hazardous conditions, often command higher values. Without access to a broader dataset of comparable contracts, it's challenging to definitively state whether this value is high, low, or average. However, given the duration (547 days) and the operational context ('PORT IN IRAQ'), the value suggests a significant scope of work. A detailed comparison would involve analyzing contract scope, geographic location, duration, specific services rendered (e.g., vessel loading/unloading, warehousing, inventory management), and the level of risk involved.

What are the potential risks associated with awarding a contract of this size without competition?

The primary risk of awarding a contract of this size without competition is the potential for paying a higher price than would be achieved through a competitive process. Without competing bids, the government lacks market validation to ensure it is receiving the best possible value. Other risks include a potential reduction in contractor incentive to innovate or improve efficiency over time, as there is no direct competitive pressure. Furthermore, a sole-source award can limit opportunities for other capable businesses to enter or expand their presence in the government contracting market. There's also the risk that the government may become overly reliant on a single provider for critical services, potentially impacting continuity if performance issues arise.

What is the track record of American United Logistics in handling large defense logistics contracts?

Information on American United Logistics' track record with large defense logistics contracts is not fully detailed in the provided data snippet. However, the fact that they were awarded this $184.4 million definitive contract suggests they possess the necessary qualifications, experience, and capacity to meet the Department of the Army's requirements for Marine Cargo Handling. To fully assess their track record, one would need to examine their past performance on similar government contracts, including client feedback, any past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and their history of successful contract execution, particularly in challenging operational environments like Iraq.

How does the firm fixed-price (FFP) contract type mitigate risks in this context?

The Firm Fixed-Price (FFP) contract type is generally considered the preferred method for acquiring supplies and services when the risks can be reasonably predicted and controlled. In this context, an FFP contract shifts the risk of cost overruns from the government to the contractor, American United Logistics. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This structure provides the government with cost certainty and incentivizes the contractor to manage its own costs efficiently. However, the benefit of cost certainty is somewhat diminished in a sole-source award, as the 'fixed' price is not validated by market competition.

What is the significance of the contract being for 'Marine Cargo Handling' in 'IRAQ'?

The designation 'Marine Cargo Handling' indicates the contract involves the loading, unloading, and management of cargo for maritime operations. Specifying 'PORT IN IRAQ' places this contract within a specific, often complex and high-risk, operational theater. Such operations are critical for military logistics, ensuring that supplies, equipment, and personnel can be effectively moved into and out of the region. Contracts in active or post-active theaters like Iraq often require specialized expertise, robust security protocols, and the ability to operate under challenging conditions, which can influence contractor selection and pricing. The nature of the work implies a direct support role for military deployments and sustainment efforts.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Water Transportation › Marine Cargo Handling

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: PLOT NO. A 26, KUWAIT FREE ZONE, SHUWAIKH

Business Categories: Category Business, Foreign Government, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,446,550

Exercised Options: $18,446,550

Current Obligation: $18,446,550

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline