MB Solutions Inc. awarded $34.2M contract for logistics support, raising questions about competition and value

Contract Overview

Contract Amount: $34,178,794 ($34.2M)

Contractor: MB Solutions Inc

Awarding Agency: Department of Defense

Start Date: 2021-03-31

End Date: 2026-03-30

Contract Duration: 1,825 days

Daily Burn Rate: $18.7K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HQAMC MEDICAL LOGISTICS LABOR BASE PLUS 4 OPTIONS

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $34.2 million to MB SOLUTIONS INC for work described as: HQAMC MEDICAL LOGISTICS LABOR BASE PLUS 4 OPTIONS Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The contract duration of five years (including options) suggests a long-term need for these services. 3. Fixed-price contract type shifts some performance risk to the contractor. 4. The North American Industry Classification System (NAICS) code 541613 indicates marketing consulting services, which may not align with the stated 'medical logistics' purpose. 5. The contract's value is significant, warranting close scrutiny of pricing and performance. 6. The absence of small business set-aside indicates a focus on larger prime contractors.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the services provided. The stated NAICS code for 'Marketing Consulting Services' appears incongruent with the contract's description as 'Medical Logistics Labor Base'. This discrepancy raises concerns about whether the pricing accurately reflects the services rendered. Further analysis would be needed to compare the per-unit costs to similar logistics support contracts within the Department of Defense, especially given the sole-source award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded on a sole-source basis. This means that only one vendor, MB Solutions Inc., was solicited for this requirement. Without a competitive bidding process, it is difficult to ascertain if the government received the best possible pricing and terms. The lack of competition limits the government's ability to leverage market forces to drive down costs and ensure optimal value.

Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium, as there was no competitive pressure to ensure the lowest possible price for the required services.

Public Impact

The primary beneficiaries are likely the Department of Defense and its medical logistics operations, ensuring the availability of necessary support services. Services delivered are expected to support the labor base for medical logistics, crucial for military readiness and healthcare delivery. The contract is geographically focused on Alabama (ST: AL, SN: ALABAMA), suggesting a specific regional operational need. Workforce implications may include the direct employment of individuals by MB Solutions Inc. to fulfill the contract's labor requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential misalignment between the stated NAICS code (Marketing Consulting Services) and the contract's purpose (Medical Logistics Labor Base).
Lack of competitive bidding raises concerns about price reasonableness and potential overpayment.
Limited transparency due to sole-source award, making it harder to assess performance and value.
The contract's duration could lead to vendor lock-in if not managed effectively.
Absence of small business participation could limit opportunities for smaller, specialized firms.

Positive Signals

The contract is a Firm Fixed Price (FFP) type, which provides cost certainty for the government.
The contract has a defined duration with options, allowing for structured planning and potential adjustments.
The award is to a single entity, potentially simplifying contract management.
The contract is for a specific labor base, indicating a clear requirement for support.

Sector Analysis

The healthcare logistics sector is critical for the efficient functioning of military medical operations. This contract falls within the broader professional services market, specifically focusing on support services. While the NAICS code suggests marketing, the description points to operational support. Comparable spending in this niche area can vary widely based on the scope and duration of services. The Department of Defense is a major consumer of such support services, often requiring specialized logistics capabilities to maintain readiness.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. This suggests that the primary award was made to a large business, MB Solutions Inc. There is no explicit information regarding subcontracting plans for small businesses. The lack of a set-aside may limit opportunities for small businesses to participate directly in this contract, although they could potentially be involved as subcontractors if MB Solutions Inc. chooses to engage them.

Oversight & Accountability

Oversight for this contract would primarily reside within the Department of the Army and the Department of Defense. Accountability measures would be tied to the performance standards outlined in the contract. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Medical Logistics Support Contracts
Healthcare Services Contracts
Professional Services Contracts
Marketing Consulting Services Contracts (based on NAICS)

Risk Flags

Sole-source award raises concerns about price reasonableness.
NAICS code mismatch with contract description requires clarification.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.2 million to MB SOLUTIONS INC. HQAMC MEDICAL LOGISTICS LABOR BASE PLUS 4 OPTIONS

Who is the contractor on this award?

The obligated recipient is MB 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 $34.2 million.

What is the period of performance?

Start: 2021-03-31. End: 2026-03-30.

What is the specific nature of the 'medical logistics labor base' services being provided under this contract, and how does it align with the NAICS code for 'Marketing Consulting Services'?

The provided data lists the NAICS code as 541613, which corresponds to 'Marketing Consulting Services'. However, the contract description is 'HQAMC MEDICAL LOGISTICS LABOR BASE PLUS 4 OPTIONS'. This presents a significant discrepancy. Medical logistics labor base typically involves personnel supporting the supply chain, warehousing, transportation, and management of medical equipment and supplies. Marketing consulting, conversely, focuses on market research, advertising, and promotional strategies. It is unclear how these two areas are integrated or if there was an error in classifying the contract's primary function. Further clarification from the awarding agency is necessary to understand the actual services rendered and justify the NAICS code assignment. Without this, it's difficult to assess if the contractor is performing services aligned with the contract's stated purpose and if the pricing is appropriate for the work actually being done.

Given the sole-source award, what mechanisms are in place to ensure the pricing is fair and reasonable for the services provided?

When a contract is awarded on a sole-source basis, the government must still ensure that the pricing is fair and reasonable. This typically involves a price analysis conducted by the contracting officer. For sole-source procurements, especially those exceeding certain dollar thresholds, the government often requires the contractor to submit detailed cost and pricing data. The contracting officer then analyzes this data, potentially comparing it to historical pricing for similar services, using cost estimating factors, or referencing commercial price lists if applicable. In this case, with a value of $34.2 million, a thorough price negotiation and analysis would be expected. However, the lack of competition inherently reduces the government's leverage in achieving the lowest possible price, making robust internal analysis critical.

What is the track record of MB Solutions Inc. in performing similar medical logistics or marketing consulting services for the federal government?

Information regarding MB Solutions Inc.'s specific track record for performing similar medical logistics or marketing consulting services for the federal government is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), other federal contract awards to this company, and any publicly available information on their project history. Without this context, it is difficult to gauge their experience level, past performance quality, and reliability in executing contracts of this nature and magnitude. Understanding their history is crucial for validating the decision to award this significant contract on a sole-source basis.

How does the $34.2 million contract value compare to historical spending on similar medical logistics support services by the Department of the Army?

Comparing the $34.2 million contract value to historical spending requires access to detailed historical contract data for the Department of the Army's medical logistics support services. The provided data snippet does not include this historical context. To perform such a comparison, one would need to query federal procurement databases (like USASpending.gov or FPDS) for similar contracts awarded over previous fiscal years, filtering by agency, service type, and potentially geographic location. Analyzing trends in spending, average contract values, and the number of competitors in the past would help determine if this current award is within a reasonable range or represents an outlier. Given the sole-source nature, a higher-than-average cost compared to previously competed contracts could be a red flag.

What are the potential risks associated with awarding a large contract like this on a sole-source basis, particularly concerning performance and cost control?

Awarding a large contract on a sole-source basis carries several inherent risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most competitive bid. Secondly, without the incentive of future competitive opportunities, the contractor might have less motivation to ensure exceptional performance or proactively control costs. Performance monitoring becomes even more critical, requiring robust government oversight to ensure deliverables meet requirements. There's also a risk of 'vendor lock-in,' where the government becomes dependent on a single provider, making it difficult and costly to switch even if performance is subpar. Finally, the absence of a competitive process can obscure potential inefficiencies or areas where alternative solutions might be more cost-effective.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Marketing Consulting Services

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: W9124P21R0004

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1500 PERIMETER PKWY NW STE 150, HUNTSVILLE, AL, 35806

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $38,743,609

Exercised Options: $34,764,670

Current Obligation: $34,178,794

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline