GSA's $175.6M contract for pharmaceutical storage awarded to Life Science Logistics LLC shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $175,646,493 ($175.6M)

Contractor: Life Science Logistics LLC

Awarding Agency: General Services Administration

Start Date: 2011-07-26

End Date: 2021-07-25

Contract Duration: 3,652 days

Daily Burn Rate: $48.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MANAGED SERVICES FOR THE STORAGE OF PHARMACEUTICALS AND MEDICAL SUPPLIES

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30333

State: Georgia Government Spending

Plain-Language Summary

General Services Administration obligated $175.6 million to LIFE SCIENCE LOGISTICS LLC for work described as: MANAGED SERVICES FOR THE STORAGE OF PHARMACEUTICALS AND MEDICAL SUPPLIES Key points: 1. Contract value of $175.6M over 10 years suggests a significant need for pharmaceutical and medical supply storage. 2. The contract was awarded under 'full and open competition after exclusion of sources,' indicating a specific reason for limiting the pool. 3. The firm-fixed-price contract type provides cost certainty for the government. 4. The duration of 3652 days (10 years) is substantial, allowing for long-term planning and relationship building. 5. The North American Industry Classification System (NAICS) code 493120 points to specialized refrigerated warehousing and storage services. 6. The contract's performance period spans from 2011 to 2021, reflecting a past need for these services.

Value Assessment

Rating: fair

The contract's total value of $175.6 million over 10 years averages to approximately $17.56 million per year. Without specific benchmarks for pharmaceutical and medical supply storage services, it's difficult to definitively assess value for money. However, the firm-fixed-price nature of the contract suggests predictable costs for the government. Further analysis would require comparing this rate to similar contracts for comparable services, considering factors like storage capacity, temperature control requirements, and geographic coverage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This designation implies that while the competition was intended to be open, certain sources were excluded, potentially due to specific requirements or prior performance issues. The number of bidders is not explicitly stated, but the 'exclusion of sources' suggests a potentially smaller pool than a truly 'full and open' competition. This could impact the degree of price discovery and potentially lead to higher costs if the remaining bidders had limited incentive to aggressively price their offers.

Taxpayer Impact: The limited competition may have resulted in less aggressive pricing than a broader competition would have achieved, potentially costing taxpayers more. It also raises questions about whether all qualified vendors had a fair opportunity to bid.

Public Impact

Federal agencies requiring secure, temperature-controlled storage for pharmaceuticals and medical supplies benefit from this contract. The services delivered include warehousing and storage, ensuring the integrity and availability of critical medical resources. The contract's performance location in Georgia (st) indicates a primary operational base, potentially serving regional needs. The contract supports the logistics and supply chain infrastructure essential for public health and emergency preparedness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition raises questions about the breadth of market engagement and potential impact on pricing.
The long contract duration could lead to vendor lock-in and reduced flexibility for the government to adapt to changing needs or market conditions.
Lack of detailed performance metrics makes it difficult to assess the contractor's efficiency and effectiveness beyond basic service delivery.

Positive Signals

The firm-fixed-price contract type provides budget certainty for the procuring agency.
The contract's substantial value suggests a critical and ongoing need for these specialized logistics services.
The long-term nature of the contract allows for a stable and reliable supply chain for essential medical materials.

Sector Analysis

This contract falls within the broader logistics and warehousing sector, specifically focusing on specialized refrigerated storage for sensitive materials like pharmaceuticals and medical supplies. The market for such services is driven by stringent regulatory requirements, demand for temperature control, and the need for secure handling of high-value goods. Comparable spending benchmarks would typically be based on per-square-foot storage costs, temperature-controlled unit rates, and value-added services like inventory management and distribution, adjusted for geographic location and service level agreements.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'small business' flag is false (sb: false). There is no explicit mention of small business set-asides or subcontracting requirements. This suggests that the primary awardee, Life Science Logistics LLC, is likely a larger entity, and the contract did not prioritize opportunities for small businesses within its structure. Consequently, the impact on the small business ecosystem for specialized pharmaceutical logistics may be limited unless the prime contractor actively engages small businesses for subcontracting roles, which is not indicated here.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the General Services Administration (GSA), specifically its Federal Acquisition Service. As a definitive contract issued under a GSA schedule, it is subject to GSA's contract administration policies and procedures. Transparency is generally facilitated through contract databases like FPDS. Accountability measures would be tied to the contract's performance clauses and the firm-fixed-price structure, which incentivizes the contractor to meet agreed-upon terms. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

GSA Federal Supply Schedule Contracts
Pharmaceutical and Medical Supply Chain Management
Government Warehousing and Storage Services
Logistics and Distribution Contracts

Risk Flags

Limited Competition
Potential for higher costs due to reduced competition
Lack of detailed performance metrics in summary data

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $175.6 million to LIFE SCIENCE LOGISTICS LLC. MANAGED SERVICES FOR THE STORAGE OF PHARMACEUTICALS AND MEDICAL SUPPLIES

Who is the contractor on this award?

The obligated recipient is LIFE SCIENCE LOGISTICS LLC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $175.6 million.

What is the period of performance?

Start: 2011-07-26. End: 2021-07-25.

What is the track record of Life Science Logistics LLC with government contracts prior to and during this award period?

Analyzing the track record of Life Science Logistics LLC requires accessing historical contract data. Prior to this $175.6 million contract, the company may have held smaller contracts or contracts with different agencies. During the period of this contract (2011-2021), its performance would be evaluated based on delivery, quality, and adherence to terms. Without specific performance reviews or data on past performance ratings, it's challenging to provide a detailed assessment. However, the award of such a substantial contract suggests a level of capability and reliability deemed sufficient by the GSA at the time of award. Further investigation into past performance metrics and any documented issues or commendations would be necessary for a comprehensive understanding.

How does the average annual cost of this contract compare to industry benchmarks for similar refrigerated warehousing and storage services?

The contract's average annual cost is approximately $17.56 million ($175.6M / 10 years). To benchmark this against industry standards, one would need to compare it with per-square-foot rental rates for temperature-controlled warehouse space, costs associated with inventory management, handling fees, and other value-added services. Factors such as the specific temperature ranges required (e.g., frozen, refrigerated), security measures, geographic location, and the volume of goods stored significantly influence pricing. Without access to detailed service level agreements and specific market data for pharmaceutical logistics warehousing in Georgia, a precise comparison is difficult. However, the scale of the contract suggests it likely encompasses significant capacity and potentially complex operational requirements.

What were the specific reasons for excluding certain sources during the competition process?

The contract was awarded under 'full and open competition after exclusion of sources.' This specific procurement method implies that while the competition was intended to be open to all responsible sources, certain vendors were intentionally excluded. The reasons for exclusion typically stem from specific technical requirements, past performance issues with certain contractors, or unique capabilities that only a limited number of firms possess. For instance, if the contract required highly specialized temperature-controlled facilities, advanced inventory tracking systems, or specific security clearances that only a subset of the market could meet, those without these qualifications would be excluded. The GSA would have documented these exclusion criteria, likely related to ensuring the highest quality and most suitable provider for critical pharmaceutical storage.

What is the estimated impact of this contract on the overall federal spending for pharmaceutical and medical supply logistics?

This contract represents a significant portion of federal spending dedicated to the storage of pharmaceuticals and medical supplies, totaling $175.6 million over a decade. While it is a substantial figure for a single contract, it needs to be viewed within the broader context of federal healthcare and defense logistics spending. The government procures a vast array of goods and services, and this contract specifically addresses the critical need for secure, temperature-controlled warehousing. Its impact on overall federal spending is significant in the niche of pharmaceutical storage but likely represents a smaller fraction of the total federal budget or even the total federal logistics expenditure, which includes transportation, distribution, and other supply chain elements.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract that indicate its effectiveness?

The provided data does not explicitly detail the performance metrics or Key Performance Indicators (KPIs) associated with this contract. Typically, government contracts include clauses outlining expected performance standards, such as on-time delivery, inventory accuracy, temperature compliance, and response times for emergencies. The effectiveness of this contract would be measured against these KPIs. A firm-fixed-price contract generally incentivizes the contractor to meet these standards to avoid penalties or contract breaches. Without access to the contract's statement of work or performance reports, assessing its effectiveness beyond the basic fulfillment of storage services is not possible from the given information.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › Refrigerated Warehousing and Storage

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Life Science Logistics, LLC

Address: 2600 REGENT BLVD, DALLAS, TX, 75261

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $194,831,782

Exercised Options: $185,876,461

Current Obligation: $175,646,493

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline