DoD's $38.9M logistics support contract for Xator LLC shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $38,933,679 ($38.9M)

Contractor: Xator LLC

Awarding Agency: Department of Defense

Start Date: 2020-02-26

End Date: 2023-04-12

Contract Duration: 1,141 days

Daily Burn Rate: $34.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: FIXED SITE SUSTAINMENT III FOR CONTRACTOR LOGISTIC SUPPORT IN THE CONTINENTAL UNITED STATES

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $38.9 million to XATOR LLC for work described as: FIXED SITE SUSTAINMENT III FOR CONTRACTOR LOGISTIC SUPPORT IN THE CONTINENTAL UNITED STATES Key points: 1. The contract's value appears reasonable when benchmarked against similar services, suggesting adequate pricing. 2. Competition was limited, with only two bids received, potentially impacting price discovery and value for taxpayers. 3. Performance risk seems manageable given the nature of logistics support, but requires ongoing monitoring. 4. This contract supports critical logistical functions for the Air Force, contributing to operational readiness. 5. The security systems services sector is characterized by specialized needs and a mix of large and small providers.

Value Assessment

Rating: good

The total award amount of approximately $38.9 million over its period of performance suggests a moderate investment for the services rendered. Benchmarking against similar logistics support contracts within the Department of Defense indicates that the pricing is within an acceptable range. While specific cost breakdowns are not provided, the overall value appears to be fair, considering the scope of contractor logistic support required for fixed sites.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which is a less common and potentially restrictive method. While it implies some level of competition was sought, the fact that only two bids were received suggests that the pool of qualified and interested contractors may have been limited. This limited competition could lead to less aggressive pricing than a broader, more open competition.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers as the government may not receive the most competitive pricing available in the market.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives essential contractor logistic support. Services delivered include sustainment and support for fixed sites, ensuring operational continuity. The geographic impact is continental United States, supporting various Air Force installations. Workforce implications include the direct employment of personnel by Xator LLC for these support functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may not yield the best possible pricing for the government.
The 'Exclusion of Sources' clause warrants further examination to understand its justification and impact.
Reliance on a single contractor for critical logistics could pose a risk if performance falters.

Positive Signals

The contract duration of over three years indicates a stable and ongoing need for these services.
The award to Xator LLC suggests they met the technical and performance requirements of the Air Force.
The contract type (Cost Plus Fixed Fee) allows for flexibility while maintaining a defined profit margin.

Sector Analysis

The Security Systems Services (except Locksmiths) sector, NAICS 561621, encompasses a range of services related to the installation, maintenance, and monitoring of security systems. This contract falls within the broader defense logistics and support services market, which is a significant area of federal spending. The market includes both specialized security providers and general logistics firms capable of supporting military operations. Benchmarks for similar contracts vary widely based on scope, but logistics support for fixed sites is a recurring requirement across multiple defense agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits to the small business ecosystem stemming from this particular award. The focus appears to be on larger, established providers capable of meeting the extensive logistical requirements.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, which provide basic award information. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency Support Contracts
Air Force Base Operations Support
Contractor Logistics Support Services
Fixed Site Security Services

Risk Flags

Limited competition may lead to suboptimal pricing.
Contract type (CPFF) shifts cost risk to the government.
Justification for 'Exclusion of Sources' requires scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.9 million to XATOR LLC. FIXED SITE SUSTAINMENT III FOR CONTRACTOR LOGISTIC SUPPORT IN THE CONTINENTAL UNITED STATES

Who is the contractor on this award?

The obligated recipient is XATOR 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 $38.9 million.

What is the period of performance?

Start: 2020-02-26. End: 2023-04-12.

What is the specific justification for using 'Full and Open Competition After Exclusion of Sources' for this contract, and what impact did it have on the number of bids received?

The 'Full and Open Competition After Exclusion of Sources' (F&O CAES) is a procurement method that allows for full and open competition but permits the exclusion of specific sources that do not meet certain criteria. The justification for using this method typically relates to ensuring that only contractors with specific capabilities, security clearances, or past performance relevant to the unique requirements of the contract can participate. In this case, the limited number of bids (two) suggests that the exclusion criteria, while intended to ensure suitability, may have significantly narrowed the field of potential bidders. This could indicate a highly specialized requirement or potentially an overly restrictive approach that limited market reach, thereby impacting the government's ability to secure the most competitive pricing.

How does the Cost Plus Fixed Fee (CPFF) contract type influence the risk and cost control for this logistics support service?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts some of the cost risk to the government, as the final cost can exceed initial estimates if actual costs are higher than anticipated. However, the fixed fee provides the contractor with an incentive to control costs, as their profit is not directly tied to the total cost incurred. For logistics support, CPFF can offer flexibility to adapt to changing operational needs, but it requires robust government oversight to ensure costs are reasonable and allocable.

What are the key performance indicators (KPIs) used to measure the success of Xator LLC's contractor logistic support, and how are they monitored?

While specific KPIs are not detailed in the provided data, typical performance indicators for contractor logistic support contracts include metrics related to response times for service requests, equipment uptime and availability, inventory management accuracy, delivery timelines for parts and supplies, and overall customer satisfaction. These KPIs are usually defined in the contract's Performance Work Statement (PWS). Monitoring is typically conducted through regular performance reviews, site visits, analysis of contractor-submitted reports, and feedback from the end-users within the Air Force. Failure to meet KPIs can result in contractual remedies, such as performance incentives or penalties.

What is the historical spending pattern for similar fixed-site sustainment and contractor logistic support services within the Department of Defense?

Historical spending on fixed-site sustainment and contractor logistic support within the DoD is substantial and spans numerous contracts across different branches and agencies. These services are critical for maintaining operational readiness and infrastructure at military installations globally. Spending patterns often reflect evolving threats, technological advancements, and shifts in military strategy, leading to adjustments in the types and scope of support required. Contracts can range from short-term, specialized needs to long-term, comprehensive support agreements like the one awarded to Xator LLC. Analyzing past spending reveals a consistent demand for reliable logistics, often leading to multi-year contracts with significant cumulative values, underscoring the importance of competitive sourcing and value assessment.

Given the nature of security systems services, what are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Primary risks for a contract involving security systems services and contractor logistic support include potential disruptions to service delivery due to contractor performance issues, cybersecurity vulnerabilities within the systems supported, unauthorized access to sensitive information, and failure to maintain equipment, leading to operational downtime. Mitigation strategies likely include rigorous vetting of contractor personnel, strong cybersecurity protocols mandated in the contract, regular audits of security systems and data handling practices, performance-based payment structures tied to uptime and reliability, and clearly defined contingency plans for service continuity in case of contractor failure or emergencies.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Systems Services (except Locksmiths)

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1835 ALEXANDER BELL DR, RESTON, VA, 20191

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

Financial Breakdown

Contract Ceiling: $67,593,875

Exercised Options: $67,593,875

Current Obligation: $38,933,679

Actual Outlays: $24,317

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA873015D0005

IDV Type: IDC

Timeline