DoD's $12M Warehousing Contract with Chugach Government Services Raises Concerns Over Competition and Value

Contract Overview

Contract Amount: $11,984,624 ($12.0M)

Contractor: Chugach Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-07-31

End Date: 2012-07-31

Contract Duration: 1,827 days

Daily Burn Rate: $6.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Other

Official Description: WAREHOUSE AND EQUIPMENT OPERATING EXPENSES

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to CHUGACH GOVERNMENT SERVICES, INC. for work described as: WAREHOUSE AND EQUIPMENT OPERATING EXPENSES Key points: 1. The contract awarded to Chugach Government Services, Inc. for warehousing and equipment operating expenses totals $11.98 million. 2. Lack of competition is a significant concern, potentially leading to inflated costs and reduced value for taxpayers. 3. The contract's duration of 1827 days (approx. 5 years) spans a considerable period, requiring ongoing scrutiny. 4. The sector is 'Other Warehousing and Storage,' with a PSC code of 493190, indicating specialized services.

Value Assessment

Rating: questionable

Pricing is difficult to assess without comparable contracts due to the 'NOT AVAILABLE FOR COMPETITION' status. The 'COST NO FEE' contract type suggests costs are reimbursed, but without competitive benchmarks, it's hard to determine if these costs are reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a limited or sole-source award. This significantly restricts price discovery and may prevent the government from securing the best possible pricing.

Taxpayer Impact: The lack of competition raises concerns about potential overspending, meaning taxpayers may not be receiving the best value for the $11.98 million allocated.

Public Impact

Taxpayers may be paying more than necessary due to the absence of competitive bidding. The long contract duration could mask inefficiencies or price increases over time. Limited transparency in pricing makes it difficult for the public to assess the fairness of the expenditure. The specific nature of warehousing and equipment operations means this spending directly supports military readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Cost Reimbursement Contract Type
Long Contract Duration
Limited Transparency

Positive Signals

Essential Service Provided
Established Contractor

Sector Analysis

This contract falls under the 'Other Warehousing and Storage' sector, which is crucial for logistical support within the Department of Defense. Benchmarks for such specialized services are often difficult to establish, especially in remote locations like Alaska, making competitive bidding even more important.

Small Business Impact

There is no indication in the provided data whether small businesses were involved in subcontracting opportunities for this contract. Further investigation would be needed to determine any small business participation.

Oversight & Accountability

The 'COST NO FEE' contract type requires robust oversight to ensure that all claimed expenses are legitimate and necessary. Without competitive pressure, the Defense Contract Management Agency must diligently audit expenditures to prevent waste.

Related Government Programs

Other Warehousing and Storage
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns
Limited transparency in pricing
Long contract duration without re-evaluation
Reliance on contractor's cost reporting

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to CHUGACH GOVERNMENT SERVICES, INC.. WAREHOUSE AND EQUIPMENT OPERATING EXPENSES

Who is the contractor on this award?

The obligated recipient is CHUGACH GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $12.0 million.

What is the period of performance?

Start: 2007-07-31. End: 2012-07-31.

What specific warehousing and equipment operating services are covered under this contract, and how were these services valued without competition?

The data indicates the contract covers 'WAREHOUSE AND EQUIPMENT OPERATING EXPENSES' with a Public Service Code (PSC) of 493190. However, the specific breakdown of services and the methodology for valuing them in the absence of competition are not provided. The 'COST NO FEE' structure implies reimbursement of actual costs, but the lack of competitive bidding makes it challenging to ascertain if these costs represent fair market value or if they are potentially inflated.

What are the primary risks associated with a limited competition contract of this magnitude and duration for essential logistical support?

The primary risks include potential cost overruns, reduced service quality, and a lack of innovation. Without competitive pressure, the contractor may have less incentive to control costs or improve efficiency. Furthermore, the government is locked into a single provider for five years, limiting its ability to adapt to changing needs or leverage better offers from other potential suppliers.

How effectively does the 'COST NO FEE' contract type, combined with limited competition, ensure value for taxpayer money in this warehousing context?

The 'COST NO FEE' structure, while covering necessary expenses, inherently relies on the contractor's cost management and the government's oversight. When combined with limited competition, the effectiveness in ensuring taxpayer value is significantly diminished. The government lacks the leverage of competitive pricing, making robust auditing and cost verification by the Defense Contract Management Agency paramount to mitigate risks of overpayment and ensure essential services are procured at reasonable rates.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › Other Warehousing and Storage

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Alaska Corporation (UEI: 071844021)

Address: 560 E 34TH AVE, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Category Business, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $12,027,655

Exercised Options: $12,027,655

Current Obligation: $11,984,624

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline