Department of Defense awards $17.4M for DVM tank repair, highlighting infrastructure needs

Contract Overview

Contract Amount: $17,456,682 ($17.5M)

Contractor: Reliable Contracting Group, LLC

Awarding Agency: Department of Defense

Start Date: 2024-05-14

End Date: 2027-12-01

Contract Duration: 1,296 days

Daily Burn Rate: $13.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: SP-POL-CMP-REPAIR-FY22 DVM TANKS 23 & 24

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85707

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to RELIABLE CONTRACTING GROUP, LLC for work described as: SP-POL-CMP-REPAIR-FY22 DVM TANKS 23 & 24 Key points: 1. Contract value appears reasonable given the scope of infrastructure repair. 2. Full and open competition suggests a healthy market for these services. 3. Long contract duration may introduce performance and cost risks. 4. Fixed-price contract shifts risk to the contractor. 5. Focus on critical infrastructure repair aligns with defense readiness priorities.

Value Assessment

Rating: good

The contract value of approximately $17.4 million for DVM tank repair and maintenance over several years seems aligned with typical infrastructure projects of this nature. Benchmarking against similar large-scale repair contracts for military equipment or facilities would provide a more precise value-for-money assessment. The firm fixed-price structure indicates a clear understanding of costs by the government, but also places the onus on the contractor to manage expenses effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. The presence of a competitive process is generally positive for price discovery and ensuring the government receives fair market value. The number of bids received and the spread of pricing would offer further insight into the competitiveness of this specific procurement.

Taxpayer Impact: Full and open competition typically leads to more favorable pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

Benefits the Department of Defense by ensuring the operational readiness of critical DVM tanks. Services delivered include repair and maintenance, crucial for extending equipment lifespan. Geographic impact is primarily in Arizona, where the work will be performed. Workforce implications include potential job creation for skilled construction and repair personnel in the local area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 3 years) could lead to cost overruns if market conditions change significantly.
Potential for scope creep if unforeseen issues arise during the repair process.
Reliance on a single contractor for a critical repair task could pose a risk if performance issues emerge.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust market and potential for competitive pricing.
Focus on repair and maintenance extends the life of existing assets, potentially saving future procurement costs.

Sector Analysis

This contract falls within the construction and maintenance sector, specifically related to specialized infrastructure for defense assets. The market for such services involves contractors with specific expertise in heavy equipment repair and construction. Comparable spending benchmarks would involve looking at other large-scale repair and maintenance contracts for military vehicles or fixed installations, which can range from millions to hundreds of millions of dollars depending on complexity and scale.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While this specific award may not directly benefit small businesses through a set-aside, the prime contractor, RELIABLE CONTRACTING GROUP, LLC, may engage small businesses as subcontractors. Further analysis of subcontracting plans would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight will likely be managed by the contracting officer and the relevant Department of the Army contracting command. Accountability measures are embedded in the firm fixed-price contract terms, with performance expectations tied to payment. Transparency is facilitated through public contract databases, though detailed performance metrics and inspection reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Vehicle Maintenance Contracts
Military Infrastructure Repair Programs
Heavy Equipment Construction Services
Defense Logistics Agency Support Contracts

Risk Flags

Long contract duration
Firm Fixed Price risk for contractor
Potential for specialized labor shortages

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to RELIABLE CONTRACTING GROUP, LLC. SP-POL-CMP-REPAIR-FY22 DVM TANKS 23 & 24

Who is the contractor on this award?

The obligated recipient is RELIABLE CONTRACTING GROUP, 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 $17.5 million.

What is the period of performance?

Start: 2024-05-14. End: 2027-12-01.

What is the track record of RELIABLE CONTRACTING GROUP, LLC with the Department of Defense?

Reliable Contracting Group, LLC has a history of securing contracts with the Department of Defense, primarily in construction and repair services. Their past performance data, often available through federal procurement databases, would detail the types of projects awarded, their value, and any reported performance issues or successes. Analyzing their award history can indicate their capacity and experience in handling large-scale, complex projects like the DVM tank repair. A review of past performance ratings and any contract disputes or terminations would provide a clearer picture of their reliability as a contractor for critical defense infrastructure.

How does the awarded price compare to similar DVM tank repair contracts?

Direct comparison of the $17.4 million award for DVM tanks 23 & 24 is challenging without access to specific, contemporaneous contract data for identical or highly similar repairs. However, the price can be benchmarked against the average cost per tank or per repair task if such data were available. Factors influencing price include the specific model of DVM tanks, the extent of damage or required upgrades, the duration of the contract, and prevailing market rates for specialized labor and materials in Arizona. A comprehensive value analysis would require a detailed breakdown of the contract's scope of work and comparison with industry cost standards for similar heavy equipment repair.

What are the primary risks associated with this firm fixed-price contract?

The primary risks associated with this firm fixed-price contract, despite offering cost certainty to the government, lie with the contractor, RELIABLE CONTRACTING GROUP, LLC. If the contractor underestimates the costs of labor, materials, or unforeseen complications during the repair of DVM tanks 23 & 24, they could face reduced profit margins or even incur a loss. Conversely, if the contractor significantly overestimates costs, the government may be paying a premium. The long duration of the contract (ending December 2027) also introduces risks related to market fluctuations in material costs and potential changes in labor availability or regulations over the performance period.

How effective is the full and open competition process in ensuring value for this type of specialized repair?

The full and open competition process is generally effective in ensuring value for specialized repair contracts by maximizing the pool of potential bidders and fostering price competition. For DVM tank repair, this means that numerous qualified companies have the opportunity to bid, driving down prices as contractors compete for the award. This process helps the Department of the Army identify the most capable contractor at the most reasonable price. However, the effectiveness can be influenced by the specificity of the requirement; if the technical requirements are overly complex or niche, the number of truly competitive bids might be limited, potentially reducing the price discovery benefits.

What is the historical spending trend for DVM tank maintenance and repair within the Department of the Army?

Analyzing historical spending trends for DVM tank maintenance and repair within the Department of the Army would reveal patterns in investment for this specific asset class. This includes tracking the total annual expenditure on such services, the number and value of contracts awarded over time, and the primary contractors involved. Significant year-over-year increases or decreases in spending could indicate shifts in maintenance strategies, budget allocations, or the aging of the DVM tank fleet. Understanding these trends provides context for the current $17.4 million award, helping to determine if it represents a typical investment or a deviation from historical patterns.

What are the potential performance implications of the contract duration?

The contract duration of approximately 3.5 years (from May 2024 to December 2027) for DVM tank repair and maintenance presents both opportunities and challenges for performance. On the positive side, it allows for a sustained focus on the required repairs and potentially builds a stronger working relationship between the contractor and the agency. However, such a long period also increases the risk of performance degradation if contractor motivation wanes, or if key personnel leave. It also means that any initial underestimation of the work's complexity or cost by the contractor could become more pronounced over time, potentially impacting the quality of the final repairs or leading to disputes if the contractor seeks adjustments.

Industry Classification

NAICS: Construction › Utility System Construction › Oil and Gas Pipeline and Related Structures Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9128F21R0008

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13035 B MIDDLETOWN INDUSTRIAL BLVD, LOUISVILLE, KY, 40223

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,518,142

Exercised Options: $17,456,682

Current Obligation: $17,456,682

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9128F22D0018

IDV Type: IDC

Timeline