Project XYZ, Inc. awarded $8.1M contract for administrative management consulting services by the Department of the Army

Contract Overview

Contract Amount: $8,128,706 ($8.1M)

Contractor: Projectxyz, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-01

End Date: 2026-02-28

Contract Duration: 729 days

Daily Burn Rate: $11.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: NEW TO

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $8.1 million to PROJECTXYZ, INC. for work described as: NEW TO Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. The duration of 729 days suggests a significant scope of work requiring sustained effort. 4. The North American Industry Classification System (NAICS) code 541611 indicates a focus on general management consulting. 5. The contract is being performed in Alabama, potentially impacting the local economy and workforce. 6. The absence of small business set-aside provisions may limit opportunities for smaller firms in this contract.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source engagements for administrative management consulting services. The cost-plus-fixed-fee structure necessitates close oversight to ensure costs remain reasonable and aligned with the fixed fee. Without competitive bidding, it's difficult to ascertain if the pricing reflects market rates or if there's an opportunity for better value through competition. Further analysis of the contractor's historical performance and pricing on similar contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential bidders. This approach is typically used when only one source is capable of meeting the government's needs, or in specific emergency situations. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from a competitive bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is less pressure on the contractor to offer the most competitive pricing. It also limits the government's ability to explore a wider range of solutions and service providers.

Public Impact

The Department of the Army is the primary beneficiary, receiving administrative management and general management consulting services. The services delivered are expected to support the operational efficiency and management functions within the Army. The geographic impact is concentrated in Alabama, where the contract is being performed. Workforce implications may include the engagement of specialized consultants and potential indirect impacts on Army personnel involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee structure requires diligent cost monitoring to prevent overruns.
Lack of transparency in the sole-source justification process.
Potential for contractor lock-in due to the absence of competition.
Limited opportunities for small businesses due to no set-aside.

Positive Signals

Contract awarded to a specific entity, Project XYZ, Inc., suggesting a perceived capability.
The contract duration indicates a commitment to addressing a defined set of needs.
The fixed fee component provides some level of cost predictability for the government.
The administrative management focus suggests support for essential government functions.

Sector Analysis

The administrative management and general management consulting services sector is a significant part of the federal procurement landscape, supporting various government functions. This contract falls within the professional services category, which often sees a mix of competitive and sole-source awards depending on the specialized nature of the requirements. Comparable spending benchmarks for similar consulting services can vary widely based on scope, duration, and contractor expertise. The market for these services is robust, with numerous firms capable of providing such support.

Small Business Impact

This contract does not appear to include any small business set-aside provisions, nor is there an indication of subcontracting goals for small businesses. This means that opportunities for small businesses to participate in this specific contract are likely limited. The absence of set-asides in sole-source awards is common, but it does reduce the overall ecosystem of opportunities for smaller firms within the federal contracting space for this particular engagement.

Oversight & Accountability

Oversight for this contract will primarily rest with the contracting officer and the Department of the Army's program management team. Accountability measures will be tied to the performance standards outlined in the contract and the cost-plus-fixed-fee structure. Transparency may be limited due to the sole-source nature of the award, with public access to detailed justifications potentially restricted. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Management and Financial Consulting, Acquisition and Technology Services
Professional Services Contracts
Department of Defense Consulting Services
Administrative Support Services

Risk Flags

Sole-source award lacks competitive justification.
Cost-plus-fixed-fee structure carries inherent cost overrun risk.
Limited transparency in the procurement process.
Potential for suboptimal value due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.1 million to PROJECTXYZ, INC.. NEW TO

Who is the contractor on this award?

The obligated recipient is PROJECTXYZ, 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 $8.1 million.

What is the period of performance?

Start: 2024-03-01. End: 2026-02-28.

What is the track record of Project XYZ, Inc. in performing similar administrative management consulting services for the federal government?

A thorough review of Project XYZ, Inc.'s past performance is crucial for assessing their suitability for this contract. This would involve examining their contract history, including the types of services rendered, contract values, performance ratings, and any past issues or disputes. Specifically, looking at their experience with cost-plus-fixed-fee contracts and their ability to manage costs effectively would be highly relevant. Without access to detailed performance data or past performance evaluations, it is difficult to definitively assess their track record. However, the fact that they were awarded a sole-source contract suggests that the agency may have had prior positive experience or identified them as uniquely qualified.

How does the awarded amount of $8.1 million compare to similar administrative management consulting contracts awarded by the Department of the Army or other federal agencies?

Comparing the $8.1 million award requires context regarding the contract's scope, duration, and specific deliverables. Sole-source contracts are inherently difficult to benchmark against competitively awarded ones due to the absence of market-driven pricing. However, general industry data for administrative management consulting services can provide a rough estimate. For a 729-day contract (approximately two years), $8.1 million suggests an average annual value of around $4 million. This figure needs to be evaluated against the complexity of the tasks, the level of expertise required, and the number of personnel involved. Without specific details on the services to be rendered, a precise comparison is not feasible, but this amount indicates a substantial engagement.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for administrative management consulting?

The primary risks associated with this contract type are multifaceted. For a sole-source award, the main risk is the potential for inflated pricing due to the lack of competitive pressure, and the missed opportunity to explore potentially better solutions or more cost-effective providers. For a cost-plus-fixed-fee (CPFF) structure, the risk lies in cost overruns. While the fixed fee provides some predictability, the 'cost' portion can escalate if not rigorously managed, potentially exceeding initial estimates. This necessitates robust oversight from the government to scrutinize all allowable costs and ensure they are reasonable and necessary. Contractor performance and adherence to the statement of work are also critical risks that need continuous monitoring.

What is the expected effectiveness of Project XYZ, Inc. in delivering administrative management consulting services based on the contract details?

The expected effectiveness hinges on the clarity of the contract's statement of work and the contractor's ability to meet those defined objectives. As a sole-source award, the agency presumably believes Project XYZ, Inc. possesses the unique capabilities or specific knowledge required for this engagement. The effectiveness will be measured against the performance metrics and deliverables outlined in the contract. The cost-plus-fixed-fee structure incentivizes the contractor to complete the work, but the government must actively manage the project to ensure the services provided are of high quality and contribute to the intended administrative improvements within the Department of the Army. Regular progress reviews and performance evaluations will be key indicators of effectiveness.

How does historical spending on administrative management consulting services by the Department of the Army compare to this specific award?

Analyzing historical spending patterns for administrative management consulting services by the Department of the Army is essential for context. This contract's $8.1 million value over approximately two years needs to be viewed within the broader spending trends. If the Army consistently spends similar amounts on such services, this award might be considered within the normal range. Conversely, if this represents a significant increase or decrease compared to historical averages for comparable services, it warrants further investigation. Understanding the volume and value of past sole-source versus competitively awarded contracts in this category would also provide valuable insight into the agency's procurement strategies and potential cost efficiencies.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1500 PERIMETER PKWY NW STE 426, HUNTSVILLE, AL, 35806

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $8,128,706

Exercised Options: $8,128,706

Current Obligation: $8,128,706

Actual Outlays: $78,894

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB24D0017

IDV Type: IDC

Timeline