DoD awards $13.2M for temporary hangars, raising questions about competition and value

Contract Overview

Contract Amount: $13,240,703 ($13.2M)

Contractor: PCI Support Services LLC

Awarding Agency: Department of Defense

Start Date: 2023-09-30

End Date: 2025-08-31

Contract Duration: 701 days

Daily Burn Rate: $18.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TEMPORARY HANGARS

Place of Performance

Location: FORT SMITH, SEBASTIAN County, ARKANSAS, 72903

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $13.2 million to PCI SUPPORT SERVICES LLC for work described as: TEMPORARY HANGARS Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 701 days suggests a significant need for these temporary structures. 3. Lack of competition raises concerns about whether the government secured the best possible value. 4. The fixed-price contract type shifts some risk to the contractor, but oversight is crucial. 5. The specific need for temporary hangars warrants further investigation into the underlying requirements. 6. The award to PCI SUPPORT SERVICES LLC lacks a clear justification for sole-source procurement.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of comparable bids. The awarded amount of $13.2 million for temporary hangars over approximately two years suggests a significant investment. Without competitive bids, it's difficult to ascertain if this price reflects fair market value or if taxpayers are overpaying. Further analysis of the specific requirements and the contractor's pricing structure would be needed to provide a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, PCI SUPPORT SERVICES LLC, was solicited. The justification for this limited competition is not provided in the data. Typically, sole-source awards occur when only one responsible source can satisfy the agency's needs. However, the absence of a competitive process means there was no opportunity for other qualified vendors to bid, potentially leading to higher prices and less innovation.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through a competitive bidding process.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving the temporary hangar facilities. These hangars will likely support military operations or logistical needs within Arkansas. The contract duration of over 23 months indicates a sustained operational requirement. The specific use of the hangars could impact personnel and equipment readiness for the Air Force.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and suboptimal value for taxpayer funds.
The sole-source justification needs to be thoroughly reviewed to ensure it was appropriate.
The long duration of the contract (701 days) warrants scrutiny to ensure continued necessity and cost-effectiveness.

Positive Signals

The contract is firm-fixed-price, which generally provides cost certainty for the government.
The contract is being performed in Arkansas, potentially supporting local economic activity.
The award is for essential temporary infrastructure, addressing a specific operational need.

Sector Analysis

The market for industrial machinery and equipment rental and leasing is diverse, encompassing a wide range of assets. This contract falls under the 'Other Commercial and Industrial Machinery and Equipment Rental and Leasing' category (NAICS 532490). While specific benchmarks for temporary military hangar rentals are not readily available, the overall sector involves significant capital investment and specialized services. The DoD is a major consumer of such services, often requiring unique solutions for operational and logistical support.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The sole-source nature of the award limits the potential for broader participation by small businesses in the prime contract. Further investigation would be needed to determine if PCI SUPPORT SERVICES LLC has any small business subcontracting plans in place.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The Inspector General's office for the Department of Defense may conduct audits or investigations if concerns regarding waste, fraud, or abuse arise. Transparency regarding the sole-source justification and performance monitoring will be key accountability measures.

Related Government Programs

Military Construction
Base Operations Support
Equipment Leasing Services
Logistics and Support Services

Risk Flags

Sole-source award lacks transparency and competitive justification.
Potential for overpayment due to lack of competition.
Need for detailed justification of temporary structure requirement.
Limited data on contractor's past performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.2 million to PCI SUPPORT SERVICES LLC. TEMPORARY HANGARS

Who is the contractor on this award?

The obligated recipient is PCI SUPPORT SERVICES 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 $13.2 million.

What is the period of performance?

Start: 2023-09-30. End: 2025-08-31.

What is the specific operational requirement driving the need for these temporary hangars?

The provided data does not specify the exact operational requirement necessitating these temporary hangars. However, such structures are typically used to provide immediate, short-to-medium term shelter for aircraft, equipment, or personnel during construction, repair, or surge operations. Given the Department of the Air Force as the agency and Arkansas as the location, potential uses could include supporting training exercises, accommodating aircraft during base infrastructure upgrades, or providing temporary storage for sensitive equipment. Understanding the precise need is crucial for validating the contract's necessity and duration.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The data indicates this contract was awarded on a sole-source basis ('NOT COMPETED'). Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required goods or services, or in cases of urgent and compelling need where competition is not feasible. Without the specific justification cited by the Department of the Air Force, it is impossible to definitively state the reason. However, the lack of competition raises concerns about whether the government explored all viable options and obtained the best possible value for taxpayers.

How does the $13.2 million cost compare to similar temporary hangar rental contracts?

Direct comparison of the $13.2 million cost for temporary hangars is difficult without access to a database of similar sole-source or competitively awarded contracts for comparable facilities. The price is for a 701-day period (approximately 23 months) and includes rental of 'Other Commercial and Industrial Machinery and Equipment'. Factors influencing cost include size, specifications, location, duration, and included services. Given the sole-source nature, it is challenging to benchmark against market rates that would typically be established through competition. A thorough value analysis would require detailed specifications of the hangars and comparison with industry pricing for similar rental agreements.

What are the potential risks associated with a sole-source award for temporary hangars?

The primary risk associated with a sole-source award is the potential for inflated pricing, as the government does not benefit from the competitive pressure that drives down costs. There's also a risk that the chosen contractor may not offer the most innovative or suitable solution available in the market. Furthermore, without a competitive process, it can be harder to ensure the contractor has the most robust track record for performance and reliability. Oversight becomes even more critical to mitigate these risks and ensure the government receives adequate value and performance.

What is the track record of PCI SUPPORT SERVICES LLC in fulfilling government contracts, particularly for equipment rental?

The provided data does not include information on the track record of PCI SUPPORT SERVICES LLC. To assess their reliability and past performance, one would need to consult federal procurement databases (like SAM.gov or FPDS) for contract history, past performance reviews, and any reported issues or disputes. A strong track record of successful contract completion, timely delivery, and adherence to quality standards would increase confidence in this sole-source award. Conversely, a history of performance problems could indicate a higher risk for this contract.

What is the expected lifespan and purpose of these 'temporary' hangars, and could they transition to permanent use?

The term 'temporary' suggests these hangars are intended for use over the contract duration of 701 days (approximately 23 months) and are not meant to be permanent structures. Their purpose is likely to fulfill an immediate or short-to-medium term need for shelter or operational space. While they are designated as temporary, the specific materials and construction methods could potentially allow for disassembly and relocation or, in some cases, adaptation for longer-term use if requirements change. However, without detailed specifications, it's difficult to ascertain their exact lifespan beyond the contract term or their potential for repurposing.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Other Commercial and Industrial Machinery and Equipment Rental and Leasing

Product/Service Code: TEXTILE/LEATHER/FUR; TENT; FLAG

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: 3480 HIGHWAY 21 N, ATMORE, AL, 36502

Business Categories: 8(a) Program Participant, Category Business, Government, HUBZone Firm, Native American Tribal Government, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,537,103

Exercised Options: $13,240,703

Current Obligation: $13,240,703

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline