DoD's $102M container leasing contract with Textainer Equipment Management raises questions about value and competition

Contract Overview

Contract Amount: $10,254,831 ($10.3M)

Contractor: Textainer Equipment Management (U.S.) Limited

Awarding Agency: Department of Defense

Start Date: 2007-01-31

End Date: 2008-01-26

Contract Duration: 360 days

Daily Burn Rate: $28.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: TEXTAINER CONTAINERS

Place of Performance

Location: HACKENSACK, BERGEN County, NEW JERSEY, 07601

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $10.3 million to TEXTAINER EQUIPMENT MANAGEMENT (U.S.) LIMITED for work described as: TEXTAINER CONTAINERS Key points: 1. The contract awarded to Textainer Equipment Management for container leasing represents a significant expenditure. 2. Competition details are unclear, with 'Full and Open Competition' listed, but the award value is substantial. 3. Potential risks include overpricing and lack of sustained competition, impacting taxpayer value. 4. The sector involves transportation equipment rental and leasing, crucial for logistics operations.

Value Assessment

Rating: questionable

The contract value of $102.5 million over approximately one year is substantial. Without specific unit cost data or benchmarks for similar container leasing agreements, it's difficult to definitively assess if this represents excellent value. Further analysis of market rates for comparable leasing services is needed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' suggesting multiple bidders were considered. However, the single award to Textainer Equipment Management for a large sum warrants scrutiny to ensure the pricing reflects competitive market dynamics and not just the lowest compliant bid.

Taxpayer Impact: The significant expenditure of over $100 million necessitates careful oversight to ensure taxpayer funds are used efficiently and that the leasing terms provide the best possible value.

Public Impact

Taxpayers are funding the leasing of essential transportation equipment for military logistics. The efficiency of this leasing arrangement directly impacts the operational readiness and cost-effectiveness of the Defense Logistics Agency. Transparency in the bidding process and contract terms is crucial for public trust and accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed unit cost data for value assessment.
Potential for price escalation in subsequent contracts.
Limited visibility into the competitive landscape beyond the initial award.

Positive Signals

Awarded under Full and Open Competition.
Contract supports critical defense logistics operations.

Sector Analysis

The Defense Logistics Agency's procurement of container leasing services falls within the broader transportation and equipment rental sector. Benchmarking this contract's value against industry standards for similar leasing agreements is essential for assessing cost-effectiveness.

Small Business Impact

The provided data does not indicate whether small businesses participated in or benefited from this contract. Further investigation would be needed to determine the extent of small business involvement.

Oversight & Accountability

Oversight of this contract should focus on ensuring adherence to the terms, monitoring performance, and verifying that the pricing remains competitive throughout the contract duration. Regular reviews by the Defense Contract Audit Agency could provide additional assurance.

Related Government Programs

Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

High contract value.
Limited transparency on unit pricing.
Potential for unexercised competition.
Lack of detailed performance metrics in provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.3 million to TEXTAINER EQUIPMENT MANAGEMENT (U.S.) LIMITED. TEXTAINER CONTAINERS

Who is the contractor on this award?

The obligated recipient is TEXTAINER EQUIPMENT MANAGEMENT (U.S.) LIMITED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $10.3 million.

What is the period of performance?

Start: 2007-01-31. End: 2008-01-26.

What was the average monthly lease cost per container, and how does it compare to industry benchmarks for similar container types and lease durations?

The provided data does not include the average monthly lease cost per container. To assess value, this information is critical. Comparing it to industry benchmarks for similar container types (e.g., standard dry, reefer) and lease durations (360 days) would reveal if the $102.5 million award represents a competitive market rate or if potential savings were missed.

Were there any specific performance metrics or service level agreements tied to this lease contract, and how were they monitored to ensure effective service delivery?

The data does not specify performance metrics or service level agreements (SLAs) for this contract. Effective oversight would require clearly defined SLAs related to container availability, condition, and delivery/pickup timeliness. Monitoring these metrics is crucial to ensure the leased equipment meets operational needs and that the contractor is held accountable for service quality.

What was the rationale for awarding a single contract for this significant value, even under 'Full and Open Competition,' and were there opportunities for future competition or contract consolidation?

The rationale for a single award under 'Full and Open Competition' is not detailed. While competition was sought, the large value suggests a potential for market concentration. Agencies should consider strategies for fostering broader competition in future procurements, potentially through contract bundling or segmentation, to maximize value and encourage innovation.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing

Product/Service Code: CONTAINERS/PACKAGING/PACKING SUPPL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textainer Equipment Management (UEI: 855465977)

Address: 1 UNIVERSITY PLZ STE 301, HACKENSACK, NJ, 05

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,254,831

Exercised Options: $10,254,831

Current Obligation: $10,254,831

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAMT0103D0173

IDV Type: IDC

Timeline