DoD's $70M Freight Forwarding Contract with Vinnell Arabia Faces Scrutiny for Lack of Competition
Contract Overview
Contract Amount: $69,760,857 ($69.8M)
Contractor: Vinnell Arabia, LLC
Awarding Agency: Department of Defense
Start Date: 2014-12-21
End Date: 2021-12-31
Contract Duration: 2,567 days
Daily Burn Rate: $27.2K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: FREIGHT FORWARDING SUPPORT
Plain-Language Summary
Department of Defense obligated $69.8 million to VINNELL ARABIA, LLC for work described as: FREIGHT FORWARDING SUPPORT Key points: 1. Significant spending of $69.8M on freight forwarding services. 2. Sole-source award to Vinnell Arabia, LLC raises competition concerns. 3. Contract duration of 2567 days (approx. 7 years) indicates long-term reliance. 4. Services fall under Facilities Support, a broad category. 5. Lack of available competition data hinders detailed analysis.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly. Without competitive benchmarks, assessing the fairness of the fixed fee is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating no competition was sought. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a substantial contract value likely results in a higher cost to taxpayers than a competitively awarded contract.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long-term nature of the contract limits opportunities for other businesses to provide these services. Lack of transparency in the sole-source justification raises accountability questions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- CPFF contract type
- Long contract duration
Positive Signals
- Services provided by a known entity (Vinnell Arabia)
Sector Analysis
Freight forwarding is a critical component of logistics and supply chain management, often outsourced by government agencies. Spending benchmarks for this specific service are highly variable based on volume, routes, and complexity, but $70M over 7 years suggests significant operational scale.
Small Business Impact
The sole-source nature of this contract provides no opportunity for small businesses to compete for these freight forwarding services. There is no indication that small businesses were considered as subcontractors.
Oversight & Accountability
The sole-source justification for this contract requires rigorous oversight to ensure the price is fair and reasonable and that the services are essential. Transparency regarding the rationale for not competing the award is crucial for accountability.
Related Government Programs
- Facilities Support Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks transparency.
- Potential for inflated costs due to CPFF and no competition.
- Limited opportunity for market innovation and cost savings.
- Long contract duration may not reflect current market needs or pricing.
Tags
facilities-support-services, department-of-defense, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.8 million to VINNELL ARABIA, LLC. FREIGHT FORWARDING SUPPORT
Who is the contractor on this award?
The obligated recipient is VINNELL ARABIA, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $69.8 million.
What is the period of performance?
Start: 2014-12-21. End: 2021-12-31.
What was the specific justification for awarding this freight forwarding contract on a sole-source basis, and were any market research efforts conducted to explore competitive options?
The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' which is a strong indicator of a sole-source justification. However, the specific details of this justification, such as national security concerns, unique capabilities, or lack of market availability, are not detailed. Standard government procurement requires market research to determine if competition is feasible before resorting to sole-source awards. Without this information, it's impossible to fully assess the necessity of the sole-source approach.
How does the Cost Plus Fixed Fee (CPFF) structure impact the overall cost-effectiveness of this long-term freight forwarding contract, especially given the lack of competition?
The CPFF structure incentivizes the contractor to incur costs, as a portion of the profit is tied to the cost base. When combined with a sole-source award, this structure presents a heightened risk of cost escalation and reduced cost-consciousness. The government bears the risk of cost overruns, and without competitive pressure, Vinnell Arabia may have less incentive to aggressively manage expenses. This necessitates robust government oversight to scrutinize costs and ensure the fixed fee remains reasonable.
What is the estimated taxpayer impact of awarding this $70M contract without competition over its 7-year duration?
Estimating the precise taxpayer impact of a sole-source award is challenging without a competitive baseline. However, it is widely accepted that competitive contracting typically yields savings of 10-30% compared to sole-source procurements. For a $70M contract, this could translate to potential overspending ranging from $7M to over $21M for taxpayers over the contract's life. This highlights the importance of exploring competition whenever feasible.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: CONTAINERS/PACKAGING/PACKING SUPPL
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W90BRJ14R0009
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: HAI AL JANADEREYAH, RIYADH
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $73,184,356
Exercised Options: $73,184,356
Current Obligation: $69,760,857
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-12-21
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2025-09-25
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