Department of Defense contract for warehousing services awarded to Peckham Vocational Industries, Inc. for over $20 million

Contract Overview

Contract Amount: $20,409,412 ($20.4M)

Contractor: Peckham Vocational Industries, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-06-01

End Date: 2015-06-30

Contract Duration: 394 days

Daily Burn Rate: $51.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF OCIE REPAIR, LAUNDRY, STORAGE AND SHIPPING.

Place of Performance

Location: LANSING, INGHAM County, MICHIGAN, 48906

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $20.4 million to PECKHAM VOCATIONAL INDUSTRIES, INC. for work described as: IGF::OT::IGF OCIE REPAIR, LAUNDRY, STORAGE AND SHIPPING. Key points: 1. The contract value of over $20 million for warehousing and storage services warrants a detailed examination of value for money. 2. Awarded on a non-competitive basis, the dynamics of competition are absent, potentially impacting price discovery. 3. The contract duration of approximately 13 months presents a moderate-term commitment for the agency. 4. The fixed-price contract type suggests a defined scope and cost structure, though potential for cost overruns exists. 5. The services provided fall under the 'Other Warehousing and Storage' NAICS code, indicating a specific niche within logistics. 6. The contract was awarded as a Delivery Order, suggesting it may be part of a larger indefinite-delivery contract.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards or detailed cost breakdowns. The total award amount of over $20 million for a 13-month period suggests a significant investment in warehousing and storage. Without competitive bidding, it is difficult to ascertain if this price represents optimal value for the Department of Defense. Further analysis would require understanding the specific services rendered and the market rates for similar specialized warehousing in Michigan.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific circumstances like emergency procurements. The lack of competition means that the Department of Defense did not benefit from the price reductions and innovation that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no market pressure to drive down prices. This necessitates a thorough justification for the sole-source determination to ensure public funds are used efficiently.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential warehousing and storage services. The contract supports the logistical needs of military operations, ensuring proper storage and handling of materials. Services are geographically focused in Michigan, potentially impacting local employment and businesses within that region. The contract may indirectly support a workforce skilled in warehousing, logistics, and potentially specialized handling depending on the stored items.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars.
Sole-source awards require strong justification to ensure they are not a result of convenience or lack of market research.
The specific nature of the 'Other Warehousing and Storage' services needs further clarification to assess performance risks.
Limited transparency due to sole-source nature makes independent performance and cost evaluation more difficult.

Positive Signals

The award to Peckham Vocational Industries, Inc. may indicate a specialized capability or a long-standing relationship with the agency.
The firm fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined.
The contract duration of over a year suggests a stable, ongoing need for these services.

Sector Analysis

The contract falls within the Warehousing and Storage sector, a critical component of the broader logistics and supply chain industry. This sector is characterized by a wide range of services, from general storage to specialized handling and distribution. The market size for warehousing services is substantial, driven by e-commerce growth and the need for efficient inventory management across various industries. Comparable spending benchmarks for similar government warehousing contracts are difficult to establish without more specific details on the type of goods stored and the level of service required.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly provided in the data. As this was a sole-source award, it is less likely to have included standard small business subcontracting goals unless the sole-source provider has a specific mandate or partnership. Further investigation would be needed to determine if Peckham Vocational Industries, Inc. has any small business subcontracting obligations or if this award impacts the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management offices. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award, making public oversight more challenging. Accountability would be measured by the contractor's adherence to the contract terms and delivery schedules.

Related Government Programs

Department of Defense Logistics Contracts
General Services Administration (GSA) Warehousing Schedules
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts
Supply Chain Management Services

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for higher costs due to lack of competition.
Limited transparency in contract justification and performance.
Need for detailed justification for sole-source procurement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.4 million to PECKHAM VOCATIONAL INDUSTRIES, INC.. IGF::OT::IGF OCIE REPAIR, LAUNDRY, STORAGE AND SHIPPING.

Who is the contractor on this award?

The obligated recipient is PECKHAM VOCATIONAL INDUSTRIES, 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 $20.4 million.

What is the period of performance?

Start: 2014-06-01. End: 2015-06-30.

What is the specific nature of the 'Other Warehousing and Storage' services provided under this contract?

The provided data indicates the NAICS code 493190, which covers 'Other Warehousing and Storage.' This category typically includes establishments primarily engaged in operating refrigerated and dry warehousing and storage facilities. It can encompass services like storing goods, operating refrigerated storage, and providing space for storing goods. However, without more specific contract details, it's unclear if this involves specialized storage for sensitive materials, hazardous goods, or if it includes additional services like inventory management, distribution, or transportation coordination. The 'IGF::OT::IGF OCIE REPAIR, LAUNDRY, STORAGE AND SHIPPING' description suggests a focus on military operational clothing and equipment (OCIE), implying storage and potentially related services like repair and shipping.

What is the justification for awarding this contract on a sole-source basis?

The data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. Government contracts are typically competed to ensure fair pricing and maximize value for taxpayers. Sole-source awards are exceptions, usually justified when only one responsible source can provide the required supplies or services. Reasons can include urgent and compelling needs, unique capabilities of a specific contractor, or when a follow-on contract is awarded to the original source under specific conditions. Without the official justification documentation, the precise reason for this sole-source award remains unknown, but it implies a determination that competition was not feasible or advantageous.

How does the $20.4 million contract value compare to typical spending for similar warehousing services by the Department of Defense?

Comparing the $20.4 million contract value requires context regarding the duration and scope of services. This contract spans approximately 13 months (June 1, 2014, to June 30, 2015). Annualized, this represents roughly $18.8 million per year. This figure is substantial for warehousing services. However, the Department of Defense operates globally and has diverse logistical needs. Without knowing the specific type of goods stored (e.g., standard supplies vs. specialized equipment), the level of service (e.g., basic storage vs. climate-controlled, security-intensive storage), and the geographic location's market rates, a direct comparison to 'typical' spending is difficult. Sole-source awards can also inflate costs compared to competitive contracts.

What are the potential risks associated with a sole-source contract of this magnitude?

Sole-source contracts carry inherent risks, primarily related to cost and performance. Without competition, there is less pressure on the contractor to offer the lowest possible price, potentially leading to overspending by the government. There's also a risk that the contractor may not be as motivated to innovate or provide exceptional service as they might be in a competitive environment. Furthermore, the lack of a competitive process can obscure potential performance issues or inefficiencies that might have been identified and addressed by alternative bidders. For a contract of over $20 million, these risks are amplified, necessitating robust oversight and clear performance metrics.

What is the track record of Peckham Vocational Industries, Inc. with federal contracts, particularly with the Department of Defense?

The provided data indicates Peckham Vocational Industries, Inc. (PVI) received this specific contract. To assess their track record, a broader search of federal procurement databases (like FPDS or SAM.gov) would be necessary. This would reveal the number of contracts PVI has held, their total value, the agencies they've served, and their performance history. Given this is a sole-source award, it might suggest a pre-existing relationship or a specific capability that the Department of Defense relies upon. However, without access to comprehensive historical data, it's impossible to definitively assess PVI's overall track record beyond this single award.

What are the implications of the 'Delivery Order' (AW: DELIVERY ORDER) designation for this contract?

The designation 'DELIVERY ORDER' suggests that this contract is likely a task order issued under a larger, pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar type of basic ordering agreement. IDIQ contracts allow agencies to procure supplies or services over a period of time up to a certain maximum amount, with specific quantities and delivery dates defined by individual delivery orders. This approach provides flexibility for the agency to order what they need, when they need it. However, it also means that the initial competition (if any) might have occurred at the IDIQ level, and this specific delivery order might have been awarded non-competitively based on the terms of that overarching agreement.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › Other Warehousing and Storage

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › INSPECTION SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3510 CAPITAL CITY BLVD, LANSING, MI, 48906

Business Categories: AbilityOne Program Participant, Category Business, Corporate Entity Tax Exempt, Manufacturer of Goods, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,409,412

Exercised Options: $20,409,412

Current Obligation: $20,409,412

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV12D0064

IDV Type: IDC

Timeline