DoD's $228M Facilities Support Contract with Chugach McKinley Raises Questions on Value and Competition
Contract Overview
Contract Amount: $227,990,216 ($228.0M)
Contractor: Chugach Mckinley, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-04-04
End Date: 2013-09-30
Contract Duration: 3,101 days
Daily Burn Rate: $73.5K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Place of Performance
Location: ELMENDORF AFB, ANCHORAGE County, ALASKA, 99506
State: Alaska Government Spending
Plain-Language Summary
Department of Defense obligated $228.0 million to CHUGACH MCKINLEY, INC. for work described as: Key points: 1. Significant contract value ($228M) for facilities support services. 2. Competition method ('FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES') warrants scrutiny for potential limitations. 3. Risk of inflated costs due to 'COST PLUS AWARD FEE' structure. 4. Sector: Facilities Support Services, a common area for government spending.
Value Assessment
Rating: questionable
The 'COST PLUS AWARD FEE' contract type can incentivize cost overruns if not carefully managed. Without specific performance metrics and award fee criteria, it's difficult to assess if the $228M represents excellent value for the services rendered.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. This method can limit the pool of potential bidders and may impact price discovery.
Taxpayer Impact: The total award value of $228M represents a substantial taxpayer investment. The effectiveness of the competition and the cost-plus structure will determine the ultimate value for taxpayers.
Public Impact
Taxpayers may be paying a premium due to the 'COST PLUS AWARD FEE' structure, which can lead to higher overall costs compared to fixed-price contracts. The exclusion of certain sources in the competition process could mean that the government did not receive the most competitive pricing available. Long contract duration (2005-2013) suggests a need for ongoing, potentially critical, facilities support services for the Air Force. The contract's focus on facilities support impacts the operational readiness and living conditions for military personnel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee structure
- Limited competition (exclusion of sources)
- Lack of clear performance benchmarks for award fee
Positive Signals
- Awarded to a specific entity (Chugach McKinley, Inc.) potentially supporting a particular mission.
- Long-term contract indicates sustained need and potential for stable service delivery.
Sector Analysis
Facilities Support Services contracts are crucial for maintaining government infrastructure and operational capabilities. Benchmarks for similar contracts vary widely based on scope, location, and service complexity, but $228M over 8 years is a significant investment.
Small Business Impact
The data indicates this contract was not awarded to small businesses (sb: false). Analysis of subcontracting opportunities for small businesses is not provided but would be a key area for oversight.
Oversight & Accountability
The 'COST PLUS AWARD FEE' structure requires robust oversight to ensure performance targets are met and costs are controlled. The exclusion of sources in the competition also warrants review to ensure fairness and maximize competition.
Related Government Programs
- Facilities Support Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns due to 'COST PLUS AWARD FEE'.
- Limited competition due to exclusion of sources.
- Lack of transparency on award fee criteria and impact.
- Significant taxpayer investment without clear value-for-money demonstration.
Tags
facilities-support-services, department-of-defense, ak, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $228.0 million to CHUGACH MCKINLEY, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is CHUGACH MCKINLEY, 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 $228.0 million.
What is the period of performance?
Start: 2005-04-04. End: 2013-09-30.
What were the specific criteria for the award fee, and how effectively did they incentivize cost control and performance?
The effectiveness of the award fee hinges on clearly defined, measurable performance metrics directly tied to cost efficiency and service quality. Without access to these specific criteria and the resulting award fee payouts, it's challenging to definitively assess if the structure truly optimized value or simply increased costs without commensurate performance gains.
What was the justification for excluding specific sources from the full and open competition?
Excluding sources from a 'full and open' competition typically requires a strong justification, such as specific technical capabilities, past performance, or national security concerns. Understanding this rationale is critical to determining if the exclusion was necessary and if it ultimately limited competitive pricing and innovation for the government.
How did the final contract cost compare to initial estimates, and what was the overall return on investment for the services provided?
Assessing the final cost against initial estimates and calculating the return on investment requires detailed financial data and performance reports. The 'COST PLUS AWARD FEE' model inherently allows for costs to exceed initial estimates if performance warrants higher fees, making a direct ROI calculation complex without further analysis.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Chugach Alaska Corporation (UEI: 071844021)
Address: 560 E 34TH AVE, ANCHORAGE, AK, 00
Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $229,398,660
Exercised Options: $133,547,511
Current Obligation: $227,990,216
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2005-04-04
Current End Date: 2013-09-30
Potential End Date: 2013-09-30 00:00:00
Last Modified: 2013-10-26
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