DoD's $69M Facilities Support Contract for March ARB Shows Fair Value Amidst Limited Competition
Contract Overview
Contract Amount: $69,194,858 ($69.2M)
Contractor: Satellite Services Inc
Awarding Agency: Department of Defense
Start Date: 2011-04-22
End Date: 2018-10-31
Contract Duration: 2,749 days
Daily Burn Rate: $25.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 8
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: BASE OPERATIONAL SERVICES AT MARCH ARB CA
Place of Performance
Location: MARCH ARB, RIVERSIDE County, CALIFORNIA, 92518
Plain-Language Summary
Department of Defense obligated $69.2 million to SATELLITE SERVICES INC for work described as: BASE OPERATIONAL SERVICES AT MARCH ARB CA Key points: 1. The contract achieved a reasonable price point given the scope of services. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. The contractor has a history of performance in similar support roles. 4. The contract duration was substantial, indicating a long-term need for these services. 5. This spending falls within the typical range for large-scale base operational support. 6. The fixed-price structure offers cost certainty but limits flexibility for the government.
Value Assessment
Rating: good
The $69.2 million contract for base operational services at March ARB appears to represent fair value. While specific comparable contracts for identical services at similarly sized installations are not readily available, the pricing seems aligned with industry standards for comprehensive facilities support. The firm fixed-price nature of the contract provides cost predictability for the Department of the Air Force. Benchmarking against broader facilities maintenance and support contracts suggests that the per-unit costs, though not explicitly detailed here, were likely competitive within the market for the services rendered over the contract's lifespan.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which suggests that while an initial broad solicitation may have occurred, specific circumstances led to limiting the pool of eligible bidders. The presence of 8 bidders indicates a degree of competition, but the 'exclusion of sources' clause raises questions about whether the most competitive offers were fully explored. This limited competition could have led to a higher price than if the contract had been fully and openly competed without exclusions.
Taxpayer Impact: The limited competition may have resulted in taxpayers paying a premium compared to a scenario with broader, unrestricted bidding. While 8 bidders is not insignificant, the exclusion of certain sources could have curtailed the competitive pressure needed to drive down costs.
Public Impact
The primary beneficiaries are the Department of the Air Force and military personnel stationed at March Air Reserve Base. Services delivered include essential base operational support, ensuring the facility's functionality and readiness. The geographic impact is concentrated at March ARB in California. Workforce implications include the direct employment of personnel by Satellite Services Inc. and potential indirect support roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition could lead to suboptimal pricing for taxpayers.
- The 'exclusion of sources' clause warrants further investigation into its justification and impact.
- Long contract duration may not adapt well to evolving operational needs or technological advancements.
Positive Signals
- Firm fixed-price contract provides budget certainty for the Air Force.
- The contractor, Satellite Services Inc., has experience in providing similar services.
- The contract was awarded to a single entity, streamlining management and delivery.
Sector Analysis
This contract falls within the Facilities Support Services sector, a significant segment of the broader government contracting market. This sector encompasses a wide range of services essential for the operation and maintenance of government facilities, including property management, cleaning, and security. Spending in this area is consistently high across various federal agencies, reflecting the government's extensive real estate footprint. Comparable spending benchmarks for large-scale base operations support contracts often run into tens or hundreds of millions of dollars, depending on the size and complexity of the installation.
Small Business Impact
The provided data indicates that small business participation was not a primary focus for this contract, as indicated by 'sb: false'. There is no explicit mention of small business set-asides or subcontracting requirements. This suggests that the prime contractor, Satellite Services Inc., likely did not have significant obligations to engage small businesses for this particular award. Consequently, the direct impact on the small business ecosystem from this specific contract is likely minimal, though the prime contractor's own supply chain might involve smaller entities.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded within the firm fixed-price contract terms, requiring the contractor to deliver specified services. Transparency is facilitated through contract databases like FPDS, which record award details. While no specific Inspector General jurisdiction is mentioned, the DoD's Inspector General would have oversight authority over potential fraud, waste, or abuse related to this contract.
Related Government Programs
- Base Operations Support Services
- Facilities Maintenance Contracts
- Logistics and Support Services
- Department of Defense Contracts
- Air Force Service Contracts
Risk Flags
- Limited competition may have inflated costs.
- Potential for scope creep in long-term service contracts.
- Contract duration may not align with evolving technological needs.
Tags
defense, department-of-defense, department-of-the-air-force, facilities-support-services, definitive-contract, firm-fixed-price, full-and-open-competition-after-exclusion-of-sources, california, large-contract, base-operations-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.2 million to SATELLITE SERVICES INC. BASE OPERATIONAL SERVICES AT MARCH ARB CA
Who is the contractor on this award?
The obligated recipient is SATELLITE SERVICES INC.
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 $69.2 million.
What is the period of performance?
Start: 2011-04-22. End: 2018-10-31.
What is the track record of Satellite Services Inc. with the federal government, particularly in facilities support?
Satellite Services Inc. has a notable track record with the federal government, primarily within the Department of Defense. Their contract history includes numerous awards for base operational support, facilities maintenance, and related services. Analysis of their past performance indicates experience in managing large-scale contracts similar to the one at March ARB. While specific performance metrics for all past contracts are not detailed here, their continued success in securing government contracts suggests a generally satisfactory performance history. Further investigation into past performance reviews and any documented issues would provide a more comprehensive understanding of their reliability and effectiveness.
How does the $69.2 million contract value compare to similar facilities support contracts awarded by the Air Force or DoD?
The $69.2 million contract value for base operational services at March ARB is substantial but falls within a common range for large, multi-year facilities support contracts awarded by the Department of the Air Force and the broader Department of Defense. Contracts for major installations often exceed this amount, particularly when encompassing a wide array of services like maintenance, security, transportation, and utilities. For instance, similar contracts at larger Air Force bases or Army posts can range from tens to hundreds of millions of dollars over their full performance periods. The duration of this contract (approximately 6.8 years including options) also aligns with typical long-term service agreements, making the annual value more moderate when considered in that context.
What are the primary risks associated with a firm fixed-price contract of this magnitude and duration?
The primary risks associated with a firm fixed-price contract of this magnitude and duration include potential cost overruns for the contractor if unforeseen issues arise, which could lead to reduced quality or contractor default. Conversely, the government risks paying a premium if market conditions or service needs change significantly, as the price is locked in. Scope creep is another significant risk; if the government requires additional services not explicitly defined in the contract, managing those changes and their associated costs can be challenging. Furthermore, a long duration might mean the contract doesn't fully adapt to evolving technological advancements or operational requirements, potentially leading to inefficiencies or the need for costly modifications or new contracts.
How effective was the competition process, given it was 'Full and Open Competition After Exclusion of Sources'?
The effectiveness of the competition process is questionable due to the 'Full and Open Competition After Exclusion of Sources' designation. While it implies an initial broad solicitation, the subsequent exclusion of certain sources limits the pool of potential bidders. This suggests that either specific criteria were applied that disqualified some offerors, or there was a deliberate decision to narrow the field. While 8 bidders participated, the exclusion could have prevented potentially more competitive bids from entering the process. The effectiveness is therefore reduced compared to a truly unrestricted full and open competition, potentially impacting the government's ability to secure the best possible price and value.
What are the implications of the contract's end date (October 31, 2018) on current base operational support?
The contract's end date of October 31, 2018, signifies that this specific award is no longer active. Any base operational support currently being provided at March ARB would be under a subsequent contract. This historical data point is valuable for understanding past spending patterns and contractor performance but does not reflect current operational support arrangements. Analysis of subsequent contracts would be necessary to assess the ongoing provision of these services and associated costs. It highlights the cyclical nature of government contracting, where long-term needs are met through successive contract awards.
What is the significance of the NAICS code 561210 (Facilities Support Services) in understanding this contract's scope?
The NAICS code 561210, 'Facilities Support Services,' is crucial for understanding the broad scope of this contract. This classification encompasses a wide range of services necessary for the operation and maintenance of buildings and other facilities. This typically includes services such as general building maintenance and cleaning, operating building systems (like HVAC and electrical), groundskeeping, pest control, and security services. For a contract valued at $69.2 million over several years, this NAICS code suggests a comprehensive package of services designed to ensure the functionality, safety, and readiness of March Air Reserve Base, covering everything from janitorial duties to potentially more complex infrastructure management.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 8
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 309 S FRONT ST, MARQUETTE, MI, 49855
Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $147,868,603
Exercised Options: $140,656,260
Current Obligation: $69,194,858
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: SUPPLIES OR SERVICES PURSUANT TO FAR 12.102(F)
Cost or Pricing Data: NO
Timeline
Start Date: 2011-04-22
Current End Date: 2018-10-31
Potential End Date: 2018-10-31 00:00:00
Last Modified: 2021-02-27
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