DoD's $41.7M contract for fire station services awarded to Centerra Group, LLC, shows fair value

Contract Overview

Contract Amount: $41,756,083 ($41.8M)

Contractor: Centerra Group, LLC

Awarding Agency: Department of Defense

Start Date: 2012-01-31

End Date: 2016-09-30

Contract Duration: 1,704 days

Daily Burn Rate: $24.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIN&ONE OTHER FIRE STATION

Place of Performance

Location: CANAVERAL AIR STATION, BREVARD County, FLORIDA, 32925

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $41.8 million to CENTERRA GROUP, LLC for work described as: MAIN&ONE OTHER FIRE STATION Key points: 1. Contract value of $41.7M over 4 years suggests a reasonable annual spend for specialized fire services. 2. Full and open competition indicates a healthy market with potential for competitive pricing. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Awarded to a single contractor, Centerra Group, LLC, for services in Florida. 5. The contract's duration of 1704 days (approx. 4.6 years) aligns with typical service contract lengths. 6. No small business set-aside was utilized, suggesting the primary focus was on best value.

Value Assessment

Rating: good

The total contract value of $41.7 million for approximately 4.6 years of service equates to roughly $9 million annually. This figure appears reasonable for comprehensive fire station operations and maintenance, especially considering the specialized nature of such services. Benchmarking against similar contracts for military base fire suppression and emergency response indicates that this pricing falls within an expected range, suggesting fair value was achieved through the competitive bidding process.

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 bids suggests a moderate level of competition for this specialized service. While more bidders could potentially drive prices lower, two offers are sufficient to establish a competitive baseline and allow for meaningful price comparison.

Taxpayer Impact: The full and open competition process likely ensured that taxpayer dollars were used efficiently by fostering a competitive environment that encouraged competitive pricing from the bidders.

Public Impact

The primary beneficiaries are the personnel and operations at the Department of the Air Force facilities in Florida, ensuring their safety and readiness. Services delivered include the operation and maintenance of fire stations, likely encompassing emergency response, fire prevention, and related support functions. The geographic impact is concentrated in Florida, specifically at the Air Force installations where the fire stations are located. This contract supports a specialized workforce of firefighters and support personnel, contributing to local employment in the Florida region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively procured.
Reliance on a single contractor for critical safety services requires robust performance monitoring.
Scope creep could occur if not managed tightly, potentially increasing costs beyond initial projections.

Positive Signals

Firm Fixed Price contract type limits the government's exposure to cost increases.
Full and open competition generally leads to better pricing and service quality.
The contract duration is reasonable for establishing a stable service provision.
Awarded by the Department of Defense, indicating adherence to established procurement standards.

Sector Analysis

This contract falls within the broader support services sector, specifically focusing on emergency response and facility maintenance. The market for specialized fire services, particularly for government installations, is often characterized by a limited number of highly qualified providers. Comparable spending benchmarks for such services can vary significantly based on the scale of operations, geographic location, and specific requirements, but the $41.7M value over nearly five years suggests a substantial, long-term commitment to ensuring safety and operational continuity.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This suggests that the requirement was likely fulfilled by larger companies with the capacity and specialized expertise to meet the demanding service needs. While this may limit direct opportunities for small businesses on this specific prime contract, it does not preclude them from potential subcontracting roles if the prime contractor chooses to engage them.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Air Force. Performance standards and deliverables would be outlined in the contract, with regular reviews and inspections to ensure compliance. Transparency is generally maintained through contract award databases, though specific operational details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Base Operations Support (BOS)
Emergency Services Contracts
Facility Maintenance and Operations
Fire Protection Services

Risk Flags

Critical Service Reliance
Contractor Performance Risk
Market Concentration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.8 million to CENTERRA GROUP, LLC. MAIN&ONE OTHER FIRE STATION

Who is the contractor on this award?

The obligated recipient is CENTERRA GROUP, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $41.8 million.

What is the period of performance?

Start: 2012-01-31. End: 2016-09-30.

What is the track record of Centerra Group, LLC in providing similar fire services to government entities?

Centerra Group, LLC has a significant history of providing a wide range of support services, including emergency response and fire protection, to government agencies, particularly within the Department of Defense and Department of Energy. Their experience often encompasses large-scale operations at federal facilities, requiring adherence to stringent safety and performance standards. While specific performance metrics for this particular $41.7M contract are not detailed in the provided data, Centerra's general profile suggests they are a capable provider for such requirements. A deeper dive into past performance reviews, any documented disputes, or contract modifications related to their fire services would offer a more comprehensive understanding of their track record.

How does the annual cost of this contract compare to industry benchmarks for similar fire station services?

The annual cost for this contract averages approximately $9 million ($41.7M / ~4.6 years). Benchmarking this figure requires considering the specific scope of services, such as the number of fire stations, personnel required, equipment maintenance, and response protocols. For large military installations or federal facilities, this annual expenditure is generally considered within a reasonable range. Industry reports and government cost analyses for base operations support and emergency services indicate that costs can fluctuate widely, but a $9 million annual outlay for comprehensive fire station services at a significant federal site is not unusually high. Factors like geographic location, labor costs, and specific regulatory compliance needs heavily influence these benchmarks.

What are the primary risks associated with a firm-fixed-price contract for fire station services?

The primary risk with a Firm Fixed Price (FFP) contract for fire station services, while generally favorable to the government by capping costs, lies in the potential for the contractor to cut corners on quality or safety to maintain profitability if unforeseen operational challenges arise. For critical services like fire suppression, any compromise in quality could have severe consequences. Another risk is that the contractor may not have sufficient incentive to innovate or improve efficiency beyond what is contractually required. However, the inherent nature of fire services, with strict protocols and safety regulations, often mitigates the risk of quality degradation. Robust performance monitoring by the government remains crucial.

What is the historical spending pattern for fire station services by the Department of the Air Force?

Historical spending patterns for fire station services by the Department of the Air Force, and the DoD more broadly, typically show consistent and significant investment due to the critical nature of these services for base operations and personnel safety. Spending is often tied to the number and size of installations, as well as evolving safety standards and equipment requirements. Contracts for these services are frequently long-term, firm-fixed-price agreements awarded through competitive processes, similar to this one. Analyzing past budgets and contract awards would reveal trends in annual spending, average contract values, and the prevalence of full and open competition versus other methods.

How does the competition level (2 bidders) impact the value for money achieved in this contract?

A competition level of two bidders suggests a moderate degree of market competitiveness. While more bidders generally lead to greater price pressure and potentially better value, two offers are sufficient to establish a competitive baseline and allow the government to compare proposals effectively. The value for money achieved depends heavily on the quality of the proposals submitted and the evaluation criteria used. If both bidders were highly qualified and submitted competitive pricing, the government likely secured fair value. However, a lower number of bidders could indicate barriers to entry or a specialized market, potentially limiting the ultimate price reduction achievable compared to a market with numerous competitors.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Other Support Services › All Other Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA252110R0003

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Constellis Holdings, LLC (UEI: 966133477)

Address: 7121 FAIRWAY DR STE 301, PALM BEACH GARDENS, FL, 33418

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,210,561

Exercised Options: $41,756,083

Current Obligation: $41,756,083

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline