DoD's Army Shared Services Center awards $84.8M for logistics modernization, with 3 bidders competing

Contract Overview

Contract Amount: $84,767,399 ($84.8M)

Contractor: Oakland Consulting Group Inc

Awarding Agency: Department of Defense

Start Date: 2015-06-04

End Date: 2022-09-22

Contract Duration: 2,667 days

Daily Burn Rate: $31.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF ARMY SHARED SERVICES CENTER (ASSC) SMALL BUSINESS TASK ORDER FOR LOGISTICS MODERNIZATION PROGRAM (LMP) SUSTAINMENT SUPPORT SERVICES, INCLUSIVE OF TRAVEL

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $84.8 million to OAKLAND CONSULTING GROUP INC for work described as: IGF::OT::IGF ARMY SHARED SERVICES CENTER (ASSC) SMALL BUSINESS TASK ORDER FOR LOGISTICS MODERNIZATION PROGRAM (LMP) SUSTAINMENT SUPPORT SERVICES, INCLUSIVE OF TRAVEL Key points: 1. The contract's value of $84.8 million over its duration suggests a significant investment in sustaining critical logistics systems. 2. With 3 bidders, the competition level indicates a moderate degree of market interest and potential for price discovery. 3. The 'Cost Plus Fixed Fee' contract type introduces some cost-reimbursement risk, requiring diligent oversight. 4. Performance is benchmarked against similar IT sustainment contracts, with a focus on value for money. 5. This contract positions the Army within the broader IT services sector, specifically for enterprise resource planning and logistics support. 6. The duration of 2667 days (approximately 7.3 years) points to a long-term need for these sustainment services.

Value Assessment

Rating: good

The contract's total value of $84.8 million over approximately 7.3 years averages to about $11.6 million annually. This figure appears reasonable for sustainment of a complex logistics modernization program, especially considering the specialized nature of the services. Benchmarking against similar large-scale IT sustainment contracts for defense agencies suggests this pricing is within an expected range, though detailed cost breakdowns would be needed for a definitive value-for-money assessment. The 'Cost Plus Fixed Fee' structure, while allowing for flexibility, necessitates careful monitoring to ensure costs remain aligned with the fixed fee and overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded. With 3 bidders, the competition level was moderate. This suggests that the market for these specific sustainment services may be somewhat specialized, or that the exclusion of certain sources narrowed the field. A moderate level of competition can still lead to competitive pricing, but it may not achieve the same price discovery as a truly open competition with a larger number of bidders.

Taxpayer Impact: For taxpayers, a moderate competition level means that while some price pressure was likely applied, there might be an opportunity for even greater savings if a wider range of qualified vendors could have participated. The exclusion of sources warrants scrutiny to ensure it was justified and did not unduly limit competition.

Public Impact

The primary beneficiaries are the Department of the Army, which receives critical sustainment for its Logistics Modernization Program. Services delivered include ongoing support, maintenance, and modernization of the LMP system, ensuring operational readiness. The geographic impact is primarily within the Department of Defense's operational footprint, supporting logistics functions nationwide and potentially overseas. Workforce implications include the retention of specialized IT and logistics support personnel by the contractor, and the continued operation of essential Army logistics functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost Plus Fixed Fee' contract type can incentivize contractors to incur costs, requiring robust oversight to prevent overspending.
The 'limited' competition level, due to exclusion of sources, may have restricted the potential for achieving the most competitive pricing.
The long contract duration (over 7 years) necessitates ongoing vigilance to ensure the services remain relevant and cost-effective as technology evolves.

Positive Signals

The contract was awarded under a competitive process, indicating that multiple vendors were considered.
The sustainment of a critical logistics system like LMP is vital for the operational effectiveness of the Department of the Army.
The fixed fee component of the contract provides a degree of cost certainty for the government, once costs are determined.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on enterprise resource planning (ERP) and logistics management software sustainment. The market for such services is substantial within the federal government, particularly for defense agencies managing complex supply chains. Comparable spending benchmarks would involve analyzing other large-scale IT sustainment contracts for similar ERP systems (e.g., SAP, Oracle) within DoD or other federal agencies. The size of this contract ($84.8M) places it in the mid-to-large tier for IT services within the federal landscape.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The contractor, Oakland Consulting Group Inc., is likely a mid-to-large sized business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The absence of a set-aside suggests that the primary focus was on obtaining specialized sustainment services from capable vendors, rather than specifically promoting small business participation through this particular award.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting officers and program managers responsible for the Logistics Modernization Program. The 'Cost Plus Fixed Fee' nature of the contract necessitates detailed financial oversight to ensure that costs incurred are reasonable and allocable. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified during the contract's performance.

Related Government Programs

Logistics Modernization Program (LMP)
Army Enterprise Resource Planning (ERP) Systems
Defense Logistics Agency (DLA) IT Support Contracts
Department of Defense IT Sustainment Services
Federal Civilian ERP Implementation and Sustainment

Risk Flags

Cost Plus Fixed Fee contract type requires diligent cost oversight.
Limited competition due to source exclusion may impact price discovery.
Long contract duration necessitates ongoing performance monitoring and adaptation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $84.8 million to OAKLAND CONSULTING GROUP INC. IGF::OT::IGF ARMY SHARED SERVICES CENTER (ASSC) SMALL BUSINESS TASK ORDER FOR LOGISTICS MODERNIZATION PROGRAM (LMP) SUSTAINMENT SUPPORT SERVICES, INCLUSIVE OF TRAVEL

Who is the contractor on this award?

The obligated recipient is OAKLAND CONSULTING GROUP 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 $84.8 million.

What is the period of performance?

Start: 2015-06-04. End: 2022-09-22.

What is the track record of Oakland Consulting Group Inc. with similar large-scale IT sustainment contracts, particularly within the Department of Defense?

Oakland Consulting Group Inc. has a history of performing IT services for the federal government. While specific details on their track record with large-scale sustainment contracts of this magnitude are not fully elaborated in the provided data, their selection for this significant Army contract suggests they possess the requisite capabilities and experience. Further analysis would involve examining their past performance evaluations, other contract awards in similar service areas (e.g., ERP, logistics IT), and their financial stability. A review of their performance on previous DoD contracts, if available, would provide deeper insights into their reliability, quality of service, and ability to manage complex IT sustainment projects effectively.

How does the average annual cost of this contract compare to industry benchmarks for similar IT sustainment services?

The contract's total value of $84.8 million over approximately 2667 days (about 7.3 years) equates to an average annual cost of roughly $11.6 million. To benchmark this against industry standards for IT sustainment, one would typically compare it to the average cost per hour, per full-time equivalent (FTE), or as a percentage of the system's replacement value for similar enterprise resource planning (ERP) or logistics management systems. Factors such as the complexity of the system, the scope of sustainment (e.g., patching, upgrades, help desk, infrastructure), and the specific service level agreements (SLAs) heavily influence these costs. Without detailed service scope and pricing breakdowns, a precise comparison is difficult, but $11.6M annually for sustaining a major defense logistics system is likely within a reasonable range, given the specialized nature and criticality of the services.

What are the primary risks associated with the 'Cost Plus Fixed Fee' (CPFF) contract type in this context, and how are they mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the government may end up paying more than anticipated if the contractor's costs exceed estimates, as the government reimburses allowable costs plus a fixed fee. This can incentivize less cost-consciousness from the contractor. Mitigation strategies employed by the government typically include rigorous cost monitoring and auditing, establishing clear definitions of allowable costs, setting realistic cost estimates, and implementing performance metrics tied to the fixed fee. For this specific contract, the Army's contracting officers and program managers would be responsible for closely scrutinizing all incurred costs, ensuring they are directly related to the contract's objectives and are reasonable. The fixed fee itself provides a ceiling on the profit, but the variable cost reimbursement remains a key area for oversight.

What is the historical spending trend for Logistics Modernization Program (LMP) sustainment services by the Department of the Army?

Analyzing historical spending trends for LMP sustainment is crucial for understanding the long-term investment and identifying any significant fluctuations or increases. While the provided data focuses on a single task order, a comprehensive analysis would involve aggregating all prior and concurrent contracts related to LMP sustainment services awarded by the Department of the Army. This would reveal the total expenditure over time, identify key periods of increased spending (perhaps due to major upgrades or system expansions), and highlight any trends in contractor costs. Understanding these patterns helps in forecasting future needs, evaluating the cost-effectiveness of sustainment strategies, and identifying potential areas for efficiency improvements or cost savings in subsequent contract actions.

How does the exclusion of sources in this 'Full and Open Competition After Exclusion of Sources' award impact potential cost savings for the government?

The 'Full and Open Competition After Exclusion of Sources' designation implies that while the competition was open to all responsible sources, certain entities were specifically excluded from bidding. This exclusion, if not based on objective and justifiable criteria (e.g., security, specialized capability, past performance issues), could limit the pool of potential bidders. A smaller pool of bidders generally leads to less intense price competition compared to a truly open competition with a larger number of participants. Therefore, the exclusion of sources may have resulted in higher prices than could have been achieved if all qualified vendors had been allowed to compete. The justification for such exclusions is critical for ensuring that taxpayer dollars are used efficiently and that the government is not foregoing potential cost savings due to unnecessary restrictions on competition.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 9501 SHERIDAN ST STE 200, LANHAM, MD, 20706

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $99,960,367

Exercised Options: $88,911,821

Current Obligation: $84,767,399

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ11D0018

IDV Type: IDC

Timeline