GSA's $49M contract for pharmaceutical storage awarded to Metro Logics Inc. shows potential value concerns

Contract Overview

Contract Amount: $49,085,375 ($49.1M)

Contractor: Metro Logics Inc

Awarding Agency: General Services Administration

Start Date: 2011-07-26

End Date: 2022-03-31

Contract Duration: 3,901 days

Daily Burn Rate: $12.6K/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 $49.1 million to METRO LOGICS INC for work described as: MANAGED SERVICES FOR THE STORAGE OF PHARMACEUTICALS AND MEDICAL SUPPLIES Key points: 1. The contract's duration and total value suggest a significant investment in logistics services. 2. Competition was full and open, which typically fosters better pricing, but specific performance data is needed for a full assessment. 3. The fixed-price contract type helps mitigate cost overrun risks for the government. 4. The service is categorized under Refrigerated Warehousing and Storage, a critical but specialized sector. 5. The contract's performance period spans over 10 years, indicating a long-term need for these services. 6. The awarded amount of $49,085,375.3 is substantial for managed logistics services.

Value Assessment

Rating: fair

Benchmarking the value of this $49M contract for pharmaceutical and medical supply storage is challenging without specific performance metrics and detailed service level agreements. While the firm-fixed-price structure is favorable, the extended duration of over 10 years necessitates careful monitoring to ensure continued cost-effectiveness. Comparing this to similar long-term, specialized warehousing contracts would provide a clearer picture of whether the pricing reflects market rates for the scope and duration of services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a moderate level of competition. While full and open competition is generally preferred for achieving competitive pricing, the specific number of bidders (two) warrants further investigation to understand if this level of competition was sufficient to drive optimal market prices or if there were barriers to entry for other potential bidders.

Taxpayer Impact: The full and open competition, despite only two bidders, suggests that taxpayers likely benefited from some price discovery. However, a higher number of bids could have potentially led to even more competitive pricing.

Public Impact

The primary beneficiaries are federal agencies requiring secure and temperature-controlled storage for pharmaceuticals and medical supplies, ensuring the integrity and availability of critical health resources. The services delivered include managed warehousing and storage, likely encompassing inventory management, distribution support, and adherence to strict regulatory requirements for medical goods. The geographic impact is centered in Georgia (SN: GEORGIA), serving as a key logistical hub for these essential supplies. Workforce implications may include specialized roles in logistics, warehousing, and compliance within the contractor's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price creep over the long contract duration if not actively managed.
Dependence on a single contractor for critical supply chain functions could pose a risk.
Ensuring consistent adherence to stringent pharmaceutical storage regulations over 10+ years requires robust oversight.

Positive Signals

Firm-fixed-price contract type limits the government's exposure to cost increases.
Full and open competition, even with two bidders, provides a baseline for competitive pricing.
The contract addresses a critical need for specialized storage of sensitive medical supplies.

Sector Analysis

The contract falls within the broader logistics and warehousing sector, specifically focusing on specialized cold chain storage for pharmaceuticals and medical supplies. This is a critical niche within the supply chain, requiring adherence to strict regulatory standards (e.g., FDA, DEA). The market for such services is competitive, with established players offering specialized infrastructure and compliance expertise. Comparable spending benchmarks would involve analyzing other government contracts for similar temperature-controlled warehousing and logistics services, considering factors like volume, duration, and specific handling requirements.

Small Business Impact

This contract was not set aside for small businesses (SB: false) and there is no indication of specific subcontracting requirements for small businesses. The primary contractor, Metro Logics Inc., is likely a larger entity capable of managing such a significant contract. This means the direct economic impact on the small business ecosystem through this specific contract is likely minimal, unless Metro Logics Inc. actively engages small businesses for specialized support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service. Mechanisms likely include regular performance reviews, audits, and adherence to contract terms and conditions. Transparency is generally facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Supply Schedule (FSS) contracts for logistics and storage
Department of Defense (DoD) medical supply chain management
Strategic National Stockpile logistics
GSA Public Buildings Service (PBS) facility management contracts

Risk Flags

Long contract duration increases risk of performance degradation or evolving needs.
Specialized nature of pharmaceutical storage requires strict regulatory compliance.
Limited competition (2 bidders) may indicate potential barriers to entry or market concentration.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $49.1 million to METRO LOGICS INC. MANAGED SERVICES FOR THE STORAGE OF PHARMACEUTICALS AND MEDICAL SUPPLIES

Who is the contractor on this award?

The obligated recipient is METRO LOGICS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $49.1 million.

What is the period of performance?

Start: 2011-07-26. End: 2022-03-31.

What is the track record of Metro Logics Inc. in managing similar large-scale, long-term government contracts, particularly those involving sensitive materials like pharmaceuticals?

Information regarding Metro Logics Inc.'s specific track record with large-scale, long-term government contracts, especially those involving pharmaceuticals, is not detailed in the provided data. A thorough analysis would require examining their past performance evaluations, any reported contract disputes or terminations, and their experience with regulatory compliance in pharmaceutical storage. Understanding their history with similar contracts would help assess their capability to fulfill the requirements of this GSA agreement effectively and reliably over its extended duration.

How does the awarded price of $49,085,375.3 for over 10 years of pharmaceutical storage compare to industry benchmarks for similar services?

Directly comparing the total awarded price of $49,085,375.3 for over 10 years of pharmaceutical storage to industry benchmarks is difficult without granular data on the specific services rendered, storage volume, temperature requirements, and geographic location. However, the firm-fixed-price nature suggests an attempt to lock in costs. To assess value, one would need to break down the annual cost and compare it to market rates for comparable refrigerated warehousing and logistics services, considering the specialized nature of pharmaceutical handling which typically commands a premium due to stringent regulatory and quality control demands.

What are the key performance indicators (KPIs) used to measure the success of this contract, and what has been Metro Logics Inc.'s performance against these KPIs?

The provided data does not specify the key performance indicators (KPIs) for this contract. Typically, for pharmaceutical storage, KPIs would include metrics such as on-time delivery, inventory accuracy, temperature excursion rates, compliance with regulatory standards, and response times to emergencies. Assessing Metro Logics Inc.'s performance would require access to contract performance reports, quality assurance reviews, and any documented instances of non-compliance or exceptional service. Without this information, a definitive judgment on the contractor's success is not possible.

Given the contract's duration (2011-2022), what was the historical spending pattern for this service, and were there significant fluctuations or increases in cost over time?

The contract's performance period spanned from July 26, 2011, to March 31, 2022, covering approximately 10 years and 7 months. The total awarded amount is $49,085,375.3. To understand historical spending patterns and fluctuations, one would need to examine the annual or quarterly disbursement data associated with this contract. This would reveal if the spending was consistent, if there were periods of higher or lower expenditure, and whether the total amount was fully utilized. Such analysis is crucial for understanding the long-term cost trajectory and budget predictability for this service.

What specific risks were identified during the procurement process or are inherent in a long-term contract for specialized logistics services like pharmaceutical storage?

Inherent risks in a long-term contract for specialized logistics services like pharmaceutical storage include potential changes in regulatory requirements, technological obsolescence in storage and tracking, supply chain disruptions (e.g., pandemics, natural disasters), contractor performance degradation over time, and market price fluctuations that could make the fixed price less competitive. During procurement, risks might include insufficient competition, inadequate vetting of the contractor's capabilities, and poorly defined service level agreements. The long duration also increases the risk of the government's needs evolving beyond the original scope.

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

Address: 10635 MARINA DR, OLIVE BRANCH, MS, 38654

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

Financial Breakdown

Contract Ceiling: $85,799,947

Exercised Options: $80,602,120

Current Obligation: $49,085,375

Actual Outlays: $3,057,066

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline