GSA awards $109M contract for pharmaceutical storage, with 2,807 days duration

Contract Overview

Contract Amount: $109,331,075 ($109.3M)

Contractor: Life Science Logistics LLC

Awarding Agency: General Services Administration

Start Date: 2011-12-05

End Date: 2022-08-04

Contract Duration: 3,895 days

Daily Burn Rate: $28.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MANAGED SERVICES FOR THE STORAGE OF PHARMACEUTICLES

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30333

State: Georgia Government Spending

Plain-Language Summary

General Services Administration obligated $109.3 million to LIFE SCIENCE LOGISTICS LLC for work described as: MANAGED SERVICES FOR THE STORAGE OF PHARMACEUTICLES Key points: 1. Contract value of $109.3M over nearly 11 years suggests a significant, long-term need for pharmaceutical storage services. 2. The contract was awarded under 'full and open competition after exclusion of sources,' indicating a specific reason for excluding certain sources, which warrants further investigation. 3. The duration of 3,895 days (over 10 years) is substantial and may present risks related to technological obsolescence or changing market conditions. 4. The contract type is 'firm fixed price,' which shifts cost risk to the contractor but could lead to higher initial pricing. 5. The North American Industry Classification System (NAICS) code 493120 points to 'Refrigerated Warehousing and Storage,' a specialized service. 6. The awardee, Life Science Logistics LLC, is positioned as a key provider in this niche sector. 7. The contract was awarded by the General Services Administration (GSA), a major federal procurement agency.

Value Assessment

Rating: fair

The contract value of $109.3 million over nearly 11 years averages to approximately $9.9 million per year. Benchmarking this against similar large-scale, long-term refrigerated warehousing contracts for pharmaceuticals is challenging without more specific service details. However, the extended duration suggests a potentially stable, albeit high, annual cost. The firm fixed-price nature implies that the contractor bears the risk of cost overruns, which is generally favorable for the government, but the overall value proposition depends heavily on the specific service levels and market conditions at the time of award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This specific procurement method indicates that while the competition was intended to be broad, certain sources were intentionally excluded. The reasons for this exclusion are not detailed in the provided data but could stem from specific technical requirements, past performance issues with certain vendors, or national security considerations. The number of bidders is not specified, but the 'exclusion of sources' suggests a potentially narrower competitive pool than a standard 'full and open' competition.

Taxpayer Impact: The exclusion of sources, even with an intent for open competition, may limit the number of potential bidders, potentially impacting the government's ability to secure the most competitive pricing. Taxpayers may benefit from specialized services if the excluded sources were unable to meet unique requirements, but a reduced competition could also mean higher costs than if all qualified vendors had participated.

Public Impact

Federal agencies requiring secure and temperature-controlled storage for pharmaceuticals are the primary beneficiaries. The contract ensures the availability of specialized warehousing and storage services critical for maintaining the integrity and efficacy of pharmaceutical products. The geographic impact is likely national, given GSA's role, though specific storage locations would be determined by the contract's operational requirements. The contract supports jobs within the logistics and warehousing sector, particularly those requiring specialized skills in handling sensitive materials.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (over 10 years) increases risk of market shifts and technological obsolescence.
The 'exclusion of sources' in the competition method warrants scrutiny to ensure fair and effective procurement.
Firm fixed-price contracts can sometimes lead to higher initial bids to account for contractor risk.
Lack of specific performance metrics or service level details makes it difficult to fully assess value for money.
Reliance on a single awardee for such a critical service could pose supply chain risks if the contractor faces operational issues.

Positive Signals

Long-term contract provides stability and predictability for essential pharmaceutical storage services.
Firm fixed-price structure transfers cost overrun risk to the contractor.
Award by GSA suggests adherence to established procurement standards and processes.
Specialized nature of refrigerated warehousing indicates a focus on critical, high-value goods.
The contract duration implies a significant and ongoing federal requirement for these services.

Sector Analysis

The contract falls within the broader logistics and warehousing sector, specifically focusing on specialized refrigerated storage for pharmaceuticals. This is a critical sub-sector due to the stringent temperature and handling requirements for medicines and vaccines. The market for pharmaceutical logistics is substantial, driven by the global pharmaceutical industry's growth and the increasing complexity of drug supply chains. Comparable spending benchmarks would typically be assessed on a per-cubic-foot or per-pallet-per-month basis for refrigerated storage, factoring in security, compliance, and specialized handling services.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. The awardee, Life Science Logistics LLC, is not explicitly identified as a small business. This suggests the contract was likely awarded to a larger entity capable of handling the scale and complexity of pharmaceutical storage. There is no direct information on subcontracting plans for small businesses, which could be a missed opportunity for engaging the small business ecosystem in this specialized service area.

Oversight & Accountability

The General Services Administration (GSA) typically employs robust oversight mechanisms for its contracts, including performance monitoring, financial audits, and compliance checks. As a 'definitive contract' awarded under GSA's Federal Acquisition Service, it would likely be subject to standard GSA contract administration procedures. Transparency is generally maintained through public contract databases like FPDS. Inspector General oversight would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

Federal Supply Schedule (FSS) Contracts
Department of Defense Medical Logistics
Strategic National Stockpile
Pharmaceutical Supply Chain Management
Government Warehousing and Storage Services

Risk Flags

Long contract duration
Competition method ('exclusion of sources')
Lack of detailed performance metrics
Potential for market obsolescence

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $109.3 million to LIFE SCIENCE LOGISTICS LLC. MANAGED SERVICES FOR THE STORAGE OF PHARMACEUTICLES

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 $109.3 million.

What is the period of performance?

Start: 2011-12-05. End: 2022-08-04.

What were the specific reasons for excluding certain sources during the 'full and open competition after exclusion of sources' process?

The data provided indicates the contract was procured under 'full and open competition after exclusion of sources.' This specific procurement method suggests that while the competition was intended to be open to all responsible sources, certain potential bidders were intentionally excluded. The reasons for such exclusions are typically documented in the contract file and can include factors like unique technical capabilities required, past performance issues with specific contractors, national security concerns, or specific regulatory compliance needs that only a subset of potential vendors could meet. Without access to the contract's Justification and Approval (J&A) document or detailed procurement records, the precise rationale for excluding sources remains unknown. Understanding these reasons is crucial for assessing whether the exclusion limited competition unnecessarily or was justified by essential requirements, impacting the government's ability to achieve the best value.

How does the annual cost of this contract compare to industry benchmarks for pharmaceutical warehousing?

The contract's total value is $109.3 million over 3,895 days (approximately 10.67 years), averaging about $10.24 million per year. To benchmark this against industry standards for pharmaceutical warehousing, several factors must be considered: the volume of goods stored, the specific temperature requirements (e.g., ambient, refrigerated, frozen), security measures, value-added services (like kitting or distribution), and geographic location. General industry benchmarks for refrigerated warehousing can range significantly, but large-scale operations for high-value goods like pharmaceuticals, especially those requiring specialized compliance (e.g., FDA regulations), often command premium pricing. Without detailed metrics on the quantity and type of pharmaceuticals stored, the specific service level agreements (SLAs), and the exact locations of the warehousing facilities, a precise comparison is difficult. However, the annual average suggests a substantial investment, likely reflecting the specialized nature and critical importance of maintaining pharmaceutical integrity.

What are the potential risks associated with the contract's long duration (over 10 years)?

The contract's duration of 3,895 days (over 10 years) presents several potential risks. Firstly, market conditions for warehousing and logistics services can change significantly over such a long period. New technologies, increased competition, or shifts in demand could make the contracted services less cost-effective or technologically outdated. Secondly, the pharmaceutical industry itself is dynamic, with evolving storage requirements, new drug formulations, and changing regulatory landscapes. A long-term contract might not adequately adapt to these changes without costly modifications. Thirdly, there's a risk of contractor performance degradation over time or the contractor facing financial instability, which could disrupt critical pharmaceutical supply chains. Finally, locking in services for such an extended period might prevent the government from capitalizing on potentially better pricing or more innovative solutions that emerge in the market later.

What is the track record of Life Science Logistics LLC in handling federal contracts, particularly for pharmaceutical storage?

Information regarding the specific track record of Life Science Logistics LLC with federal contracts, especially concerning pharmaceutical storage, is not detailed in the provided summary data. To assess their track record, one would need to examine their past performance on similar government contracts, including their adherence to delivery schedules, quality of service, compliance with regulations, and any history of disputes or contract terminations. Databases like the Federal Awardee Performance and Integrity Information System (FAPIIS) could provide insights into past performance issues or positive performance records. Given the critical nature of pharmaceutical storage, a thorough review of their experience, certifications, and past performance with both government and commercial clients would be essential for a comprehensive risk assessment.

How does the firm fixed-price contract type impact the government's exposure to cost overruns versus potential pricing?

A firm fixed-price (FFP) contract type shifts the majority of cost risk from the government to the contractor. This means that the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. For the government, this offers budget certainty and protection against unexpected cost increases. However, contractors typically build a contingency premium into their FFP bids to account for potential risks and uncertainties they might encounter. Consequently, FFP contracts can sometimes result in a higher initial price compared to cost-reimbursement contracts, especially for complex or long-duration projects where future costs are difficult to predict accurately. In this case, the government benefits from predictable spending but may be paying a premium for the contractor's assumption of risk over the nearly 11-year period.

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: 1

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: $112,105,744

Exercised Options: $111,126,013

Current Obligation: $109,331,075

Actual Outlays: $9,486,391

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline