STRATEGIX MANAGEMENT LLC awarded $41M contract for Laredo JCC operations, raising value-for-money questions

Contract Overview

Contract Amount: $41,038,705 ($41.0M)

Contractor: Strategix Management LLC

Awarding Agency: Department of Labor

Start Date: 2021-05-19

End Date: 2026-07-31

Contract Duration: 1,899 days

Daily Burn Rate: $21.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OPERATIONS FOR LAREDO JCC AND OA/CTS

Place of Performance

Location: LAREDO, WEBB County, TEXAS, 78041

State: Texas Government Spending

Plain-Language Summary

Department of Labor obligated $41.0 million to STRATEGIX MANAGEMENT LLC for work described as: OPERATIONS FOR LAREDO JCC AND OA/CTS Key points: 1. Contract value of $41M over 5 years suggests a significant investment in operational support. 2. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a potentially complex procurement history. 3. A single awardee for a large operational contract warrants scrutiny of performance and potential risks. 4. The contract's duration of 1899 days (approx. 5 years) requires ongoing performance monitoring. 5. The NAICS code 611519 (Other Technical and Trade Schools) seems unusual for 'OPERATIONS FOR LAREDO JCC AND OA/CTS', suggesting a potential misclassification or specialized service. 6. The contract's fixed price nature aims to control costs but may limit flexibility for unforeseen operational changes.

Value Assessment

Rating: fair

The contract value of $41,038,705.47 over approximately five years averages to roughly $8.2 million annually. Without specific benchmarks for Laredo JCC operations or comparable contracts for similar facilities, assessing value-for-money is challenging. The fixed-price contract type suggests an attempt to control costs, but the absence of detailed performance metrics or cost breakdowns makes a definitive value assessment difficult. Further analysis would require understanding the scope of services provided and comparing them to industry standards for facility operations and management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This procurement method suggests that while the competition was intended to be open, certain sources were excluded, possibly due to prior performance issues, specific qualifications, or a phased approach. With 6 bidders, the competition level appears moderate, but the exclusion of sources could limit the range of competitive offers and potentially impact price discovery. The specific reasons for excluding sources would be critical to understanding the true level of competition.

Taxpayer Impact: The moderate number of bidders, coupled with the exclusion of certain sources, may have led to a less competitive pricing environment than a truly open competition, potentially costing taxpayers more than necessary.

Public Impact

The primary beneficiaries are likely the Department of Labor and potentially other federal agencies utilizing the Laredo JCC facilities. The contract delivers operational support services for the Laredo JCC and OA/CTS, ensuring facility functionality and administrative continuity. The geographic impact is localized to Laredo, Texas, where the JCC and OA/CTS are situated. Workforce implications may include direct employment by STRATEGIX MANAGEMENT LLC and potential indirect impacts on local service providers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' raises concerns about the initial procurement process and potential limitations on competitive offers.
The NAICS code 611519 (Other Technical and Trade Schools) appears mismatched with the contract description ('OPERATIONS FOR LAREDO JCC AND OA/CTS'), suggesting potential misclassification or a highly specialized, non-standard service offering.
Lack of detailed performance metrics or cost breakdowns makes it difficult to assess the true value for money.
The contract's long duration (1899 days) necessitates robust oversight to ensure continued performance and prevent complacency.
The exclusion of sources in the competition process warrants investigation into the rationale and its impact on overall cost-effectiveness.

Positive Signals

The contract was awarded to a single entity, STRATEGIX MANAGEMENT LLC, implying they met the required qualifications.
The fixed-price contract type provides cost certainty for the government, assuming the scope of work is well-defined.
A moderate number of bidders (6) suggests some level of market interest and capability.
The contract is managed by the Office of the Assistant Secretary for Administration and Management (OASAM), a key administrative body within the Department of Labor, indicating a degree of internal oversight.
The contract duration allows for stability in operations and potentially fosters a strong working relationship between the contractor and the agency.

Sector Analysis

The contract falls within the broader professional, scientific, and technical services sector, specifically focusing on operational support and facility management. The NAICS code 611519, typically associated with vocational and trade schools, is an outlier for this type of service, suggesting a niche or specialized requirement. Comparable spending benchmarks for facility operations and management contracts within federal agencies vary widely based on facility size, services required, and geographic location. Without more specific details on the services rendered, direct comparisons are difficult, but the $41M value over five years indicates a substantial contract.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus was on full and open competition (after exclusions) to secure the best offer, rather than specifically promoting small business involvement. The impact on the small business ecosystem is likely minimal unless STRATEGIX MANAGEMENT LLC voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of Labor's Office of the Assistant Secretary for Administration and Management (OASAM), which awarded the contract. Accountability measures would typically be embedded within the contract's performance work statement, including reporting requirements, service level agreements, and potential penalties for non-performance. Transparency is facilitated through contract databases like FPDS, but detailed operational performance data is often not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Facility Operations and Maintenance Contracts
Government Administrative Support Services
Department of Labor Operational Budgets
JCC (Job Corps Center) Management Contracts
OA/CTS (Office of Apprenticeship and Training Support) Services

Risk Flags

Potential NAICS Code Mismatch
Limited Competition Due to Source Exclusions
Long Contract Duration Increases Risk of Complacency
Lack of Publicly Available Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $41.0 million to STRATEGIX MANAGEMENT LLC. OPERATIONS FOR LAREDO JCC AND OA/CTS

Who is the contractor on this award?

The obligated recipient is STRATEGIX MANAGEMENT LLC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $41.0 million.

What is the period of performance?

Start: 2021-05-19. End: 2026-07-31.

What specific services are included under 'OPERATIONS FOR LAREDO JCC AND OA/CTS'?

The provided data does not detail the specific services encompassed by 'OPERATIONS FOR LAREDO JCC AND OA/CTS'. Typically, such operational contracts for facilities like Job Corps Centers (JCC) and related administrative offices (OA/CTS) would include a range of services such as facility maintenance and repair, groundskeeping, security, custodial services, utilities management, logistical support, and potentially administrative assistance. The unusual NAICS code (611519 - Other Technical and Trade Schools) might imply specialized training-related operational support or a unique interpretation of 'operations' by the contracting agency. A thorough review of the contract's Performance Work Statement (PWS) would be necessary to ascertain the precise scope of services.

Why was the competition conducted as 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', and which sources were excluded?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates that the procurement was initially intended to be fully open, but specific potential offerors were excluded prior to the solicitation. The reasons for exclusion can vary widely, including past performance issues, failure to meet mandatory pre-qualification criteria, or specific agency decisions based on prior contract experiences. Without access to the contract file or agency justifications, it is impossible to identify which sources were excluded or the precise rationale. This procurement method can sometimes limit the breadth of competition and potentially impact the final price achieved, suggesting a need for careful review of the justification for exclusions.

How does the $41M contract value compare to historical spending on Laredo JCC and OA/CTS operations?

The provided data only includes information for this specific $41,038,705.47 contract awarded to STRATEGIX MANAGEMENT LLC. To compare this to historical spending, one would need to access historical contract data for the Laredo JCC and OA/CTS operations. This would involve searching federal procurement databases (like FPDS or USASpending.gov) for previous contracts related to these facilities and services, noting their values, durations, and awardees. Without this historical context, it's impossible to determine if $41M represents an increase, decrease, or stable level of spending for these operations over time. Analyzing trends would reveal if operational costs are escalating or remaining consistent.

What is the significance of the NAICS code 611519 (Other Technical and Trade Schools) for this contract?

The assignment of NAICS code 611519, 'Other Technical and Trade Schools,' to a contract described as 'OPERATIONS FOR LAREDO JCC AND OA/CTS' is highly unusual and warrants further investigation. This code typically applies to establishments primarily engaged in providing vocational or technical training and skills development outside of the formal academic system. Its use here suggests either a misclassification by the agency, or that the 'operations' involve a significant component of training delivery or support for training programs within the JCC or OA/CTS context. It's possible the JCC itself functions partly as a trade school, and the contract covers its operational and training support. Clarification from the Department of Labor would be needed to resolve this discrepancy.

What are the potential risks associated with a single awardee managing these operations for over five years?

A single awardee managing complex operations for over five years presents several potential risks. Firstly, there's a risk of contractor complacency, where performance may decline over time due to a lack of competitive pressure. Secondly, institutional knowledge becomes concentrated within the contractor, potentially making it difficult for the government to transition to a new provider or bring services in-house if desired. Thirdly, if the contractor experiences financial difficulties or significant operational issues, it could lead to disruptions in essential services, given the lack of immediate alternatives. Robust contract management, performance monitoring, and contingency planning are crucial to mitigate these risks.

Industry Classification

NAICS: Educational Services › Technical and Trade Schools › Other Technical and Trade Schools

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 1605JW-20-R-00011

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2101 L ST NW STE 400, WASHINGTON, DC, 20037

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $44,226,171

Exercised Options: $44,151,171

Current Obligation: $41,038,705

Actual Outlays: $37,146,764

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline