Department of Defense awards $13.3M for office and food service supplies to LC Industries Inc

Contract Overview

Contract Amount: $13,288,299 ($13.3M)

Contractor: LC Industries Inc

Awarding Agency: Department of Defense

Start Date: 2008-12-16

End Date: 2009-09-30

Contract Duration: 288 days

Daily Burn Rate: $46.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE

Sector: Other

Official Description: OFFICE AND FOOD SERVICE SUPPLIES

Place of Performance

Location: CAMP PENDLETON, SAN DIEGO County, CALIFORNIA, 92055

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $13.3 million to LC INDUSTRIES INC for work described as: OFFICE AND FOOD SERVICE SUPPLIES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract value of $13.3 million falls within a moderate spending range for office supplies. 3. Delivery order type indicates a specific, time-bound need for supplies. 4. Fixed-price contract type shifts risk to the contractor for cost overruns. 5. The North American Industry Classification System (NAICS) code 424120 points to a specialized wholesale market. 6. Contract duration of 288 days suggests a focused procurement period. 7. No small business set-aside was applied, indicating the primary award was not specifically targeted for small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the exact goods and services procured. However, $13.3 million for office and food service supplies over a 288-day period represents a significant but not extraordinary expenditure. The fixed-price nature of the contract is generally favorable for the government, as it caps potential costs. Further analysis would require comparing the unit prices of specific items against market rates or similar government contracts to determine true value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of two bidders suggests a degree of competition, though the exact number of potential bidders in this specialized market is unknown. A higher number of bidders typically leads to more competitive pricing and better value for the government. The limited number of bidders here might indicate a niche market or specific requirements that narrowed the field.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices. However, with only two bidders, the potential for significant cost savings may have been limited compared to a more robustly contested procurement.

Public Impact

Military personnel and support staff within the Department of the Navy benefit from the availability of necessary office and food service supplies. The contract ensures the provision of stationery, office supplies, and potentially food service items essential for daily operations. The geographic impact is primarily within California, where the contract was administered. Workforce implications are minimal, as this is a supply contract rather than a service contract requiring direct labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bidders could potentially lead to higher prices than a more competitive scenario.
The broad category of 'office and food service supplies' lacks specificity, making it difficult to assess if the best value was obtained.
The contract duration is relatively short (288 days), which might lead to frequent re-procurements and associated administrative costs.

Positive Signals

Awarded under full and open competition, ensuring a fair process.
Fixed-price contract type provides cost certainty for the government.
The contractor, LC Industries Inc., is a known entity in the supply sector.

Sector Analysis

The market for office and food service supplies is a mature and competitive sector, dominated by wholesale distributors and manufacturers. Government spending in this area is substantial, supporting the daily operations of various agencies. NAICS code 424120 specifically covers stationery and office supplies merchant wholesalers. While this contract is for a mix of office and food service supplies, the primary classification points to the office supply segment. Comparable spending benchmarks would typically involve analyzing the total government expenditure on office supplies annually, which runs into billions of dollars.

Small Business Impact

This contract was not awarded as a small business set-aside, and the data indicates no indication of small business subcontracting requirements. LC Industries Inc. is a large business. This means the primary contract value did not directly benefit small businesses through a set-aside program. However, the potential for small businesses to participate as subcontractors to LC Industries Inc. exists, though it is not explicitly mandated by the contract details provided.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Navy's contracting and procurement offices. As a delivery order under a larger contract vehicle, its execution is monitored for compliance with terms and conditions. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's performance or award.

Related Government Programs

General Services Administration (GSA) Schedules
Department of Defense Office Supply Procurement
Federal Supply Schedule (FSS) Contracts

Risk Flags

Limited Competition
Broad Scope of Supplies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.3 million to LC INDUSTRIES INC. OFFICE AND FOOD SERVICE SUPPLIES

Who is the contractor on this award?

The obligated recipient is LC INDUSTRIES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $13.3 million.

What is the period of performance?

Start: 2008-12-16. End: 2009-09-30.

What is the track record of LC Industries Inc. in fulfilling federal contracts, particularly for office and food service supplies?

LC Industries Inc. has a history of receiving federal contracts, primarily through the AbilityOne program, which mandates procurement from non-profit agencies that employ individuals with disabilities. While this specific contract was awarded under full and open competition, the company's broader federal contracting experience suggests familiarity with government procurement processes. Analyzing their past performance on similar supply contracts, including delivery timeliness, quality of goods, and adherence to contract terms, would provide a more comprehensive understanding of their reliability. Data on past contract values, agencies served, and any performance issues or awards would be crucial for a thorough assessment.

How does the $13.3 million contract value compare to typical annual spending on office and food service supplies by the Department of the Navy?

The $13.3 million contract value for office and food service supplies, awarded in late 2008 and expiring in late 2009, represents a significant but not exceptionally large expenditure for a single delivery order. The Department of the Navy, as a major branch of the U.S. military, has substantial and ongoing needs for a wide array of supplies. Annual spending on such items can easily reach hundreds of millions, if not billions, of dollars across all its installations and activities. This particular contract likely addressed a specific, concentrated need or a defined period, rather than representing the entirety of the Navy's annual requirement for these goods. Without access to the Navy's total spending data for office and food service supplies during that fiscal year, a precise comparison is difficult, but it's reasonable to assume this contract was one of many contributing to the overall supply chain.

What are the potential risks associated with a fixed-price contract for office and food service supplies?

The primary risk associated with a fixed-price contract, from the government's perspective, is that the contractor may incur higher costs than anticipated, potentially leading to reduced quality or delivery issues if the contractor attempts to cut corners to maintain profitability. However, for standardized goods like office and food service supplies, where market prices are relatively stable and predictable, the fixed-price structure generally favors the government by providing cost certainty. The risk is largely borne by the contractor (LC Industries Inc. in this case) to manage their procurement and operational costs effectively. Potential risks for the government could arise if unforeseen market fluctuations significantly increase raw material or shipping costs, impacting the contractor's ability or willingness to fulfill the contract at the agreed-upon price, though this is less common with established supply contracts.

Given the NAICS code 424120 (Stationery and Office Supplies Merchant Wholesalers), how does the inclusion of 'food service supplies' affect the contract's scope and potential value assessment?

The inclusion of 'food service supplies' alongside 'stationery and office supplies' broadens the contract's scope beyond the primary classification of NAICS 424120. This suggests that the procuring entity (Department of the Navy) required a vendor capable of supplying a more diverse range of consumables. Assessing the value becomes more complex as it requires evaluating pricing and market competitiveness for two distinct categories of goods. It's possible that LC Industries Inc. has diversified its offerings or partnered with other suppliers to meet this dual requirement. The value assessment should ideally consider benchmarks for both office supplies and food service items separately, or analyze the overall package price against market rates for such combined procurements, if such benchmarks exist.

What does the fact that this was a 'Delivery Order' imply about the overall contract structure and the government's procurement strategy?

A 'Delivery Order' indicates that this $13.3 million award was not a standalone contract but rather a specific order placed against a larger, pre-existing contract vehicle, often referred to as a 'base contract' or 'blanket purchase agreement.' This strategy allows the government to establish terms and conditions, and potentially pricing, upfront with a vendor, and then issue multiple delivery orders over time as specific needs arise. This approach offers flexibility and can streamline the procurement process for recurring needs. It implies that LC Industries Inc. likely had a broader contract in place with the Department of the Navy, and this delivery order represented a specific quantity and delivery schedule for office and food service supplies within the parameters of that larger agreement.

Industry Classification

NAICS: Wholesale Trade › Paper and Paper Product Merchant Wholesalers › Stationery and Office Supplies Merchant Wholesalers

Product/Service Code: OFFICE SUPPLIES AND DEVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M0068108R0002

Offers Received: 2

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4500 EMPEROR BLVD, DURHAM, NC, 27703

Business Categories: AbilityOne Program Participant, Category Business, Corporate Entity Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $13,288,299

Exercised Options: $13,288,299

Current Obligation: $13,288,299

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M0068108D0012

IDV Type: IDC

Timeline