DHS awards $24.3M food services contract to Nayyarsons Corp. under full and open competition

Contract Overview

Contract Amount: $24,269,795 ($24.3M)

Contractor: Nayyarsons Corp.

Awarding Agency: Department of Homeland Security

Start Date: 2004-06-01

End Date: 2009-09-30

Contract Duration: 1,947 days

Daily Burn Rate: $12.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: FULL FOOD SERVICES

Place of Performance

Location: CAPE MAY, CAPE MAY County, NEW JERSEY, 08204

State: New Jersey Government Spending

Plain-Language Summary

Department of Homeland Security obligated $24.3 million to NAYYARSONS CORP. for work described as: FULL FOOD SERVICES Key points: 1. Contract value of $24.3M over 5 years suggests a significant need for food services. 2. Full and open competition indicates a potentially competitive bidding process. 3. Fixed Price with Economic Price Adjustment (FP/EPA) contract type may expose the government to price fluctuations. 4. Contract duration of 1947 days (approx. 5.3 years) provides long-term service stability. 5. The North American Industry Classification System (NAICS) code 722310 points to specialized food service operations. 6. Award to Nayyarsons Corp. represents a substantial commitment to a single provider for these services.

Value Assessment

Rating: fair

The contract value of $24.3 million over approximately 5.3 years averages to about $4.58 million annually. Without specific benchmarks for food services at this scale for the U.S. Coast Guard, it's difficult to definitively assess value for money. However, the fixed-price with economic price adjustment structure introduces potential for cost increases beyond initial projections, which warrants careful monitoring. The number of bids received (4) is a moderate indicator of competition, but the final price relative to market rates for similar large-scale food service contracts would be a key determinant of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that all responsible sources were permitted to submit bids. Four bids were received, indicating a moderate level of competition for this requirement. While four bidders is not exceptionally high for a contract of this magnitude, it suggests that the market was engaged and that the government had options to choose from. The competitive process aims to ensure that the government receives fair pricing and quality services.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. The presence of multiple bidders suggests that taxpayer funds are being used efficiently, as the award is likely based on the best value proposition among the competing firms.

Public Impact

Service members and personnel of the U.S. Coast Guard are the primary beneficiaries, receiving essential food services. The contract ensures the provision of food services, contributing to the morale and operational readiness of Coast Guard facilities. Services are likely concentrated in New Jersey, as indicated by the awardee's state (NJ). The contract supports jobs within the food service industry, potentially creating employment opportunities for cooks, servers, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to increased costs for taxpayers if market prices for food and labor rise significantly.
Reliance on a single contractor for a critical service like food provision could create dependency and potential service disruptions if the contractor faces issues.
The fixed-price nature, even with adjustments, may not fully capture the most cost-effective solutions if not managed tightly.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
Contract duration provides stability and predictability for service delivery.
The contract specifies food services, a fundamental requirement for personnel welfare and operational effectiveness.

Sector Analysis

The food service industry is a large and diverse sector encompassing everything from restaurants to institutional catering. This contract falls under the institutional or government catering segment. The NAICS code 722310 specifically covers food service contractors that provide food for events, institutions, and other organizations. Government contracts for food services are common across various agencies to support military bases, federal facilities, and public institutions. Benchmarking would require comparing this contract's per-meal cost or overall value against similar large-scale food service contracts awarded to other government entities or large private organizations.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'ss' (small business set-aside) and 'sb' (small business) flags are both false. This suggests the contract was not specifically set aside for small businesses. Consequently, the prime contractor, Nayyarsons Corp., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this data, which means the extent of small business involvement will depend on Nayyarsons Corp.'s procurement practices and any potential flow-down requirements not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the U.S. Coast Guard's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards, delivery schedules, and quality requirements. Transparency is generally facilitated through contract award databases and reporting requirements. The Inspector General for the Department of Homeland Security would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Food Service Contracts
Department of Homeland Security Procurement
U.S. Coast Guard Operations Support
Institutional Food Service Management
Government Catering Services

Risk Flags

Potential for cost increases due to Economic Price Adjustment clause.
Long contract duration may reduce flexibility.
Moderate competition level (4 bidders) may not yield the lowest possible price.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $24.3 million to NAYYARSONS CORP.. FULL FOOD SERVICES

Who is the contractor on this award?

The obligated recipient is NAYYARSONS CORP..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $24.3 million.

What is the period of performance?

Start: 2004-06-01. End: 2009-09-30.

What is the historical spending pattern for food services by the U.S. Coast Guard?

Analyzing historical spending patterns for food services by the U.S. Coast Guard is crucial for understanding the context of this $24.3 million award. Without access to specific historical data for this agency, a general approach would involve examining past contracts for similar services. This would include looking at the number of contracts awarded, their values, durations, and the contractors involved. Trends in spending could reveal whether this award represents an increase or decrease in overall investment in food services. Furthermore, comparing the average annual spending on food services over several fiscal years can help identify any significant shifts in budget allocation. Understanding historical spending also aids in benchmarking the current contract's value against previous investments and assessing if costs have escalated or remained stable over time.

How does the pricing of this contract compare to similar food service contracts awarded by other federal agencies?

Benchmarking the pricing of this $24.3 million food services contract against similar contracts awarded by other federal agencies is essential for assessing value for money. This comparison would involve identifying contracts with comparable scope, service levels, duration, and geographic location, if possible. Key metrics for comparison could include the cost per meal, cost per person served daily, or the overall contract value relative to the number of personnel supported. For instance, if other agencies are procuring similar large-scale food services at a significantly lower annual cost or per-unit price, it might indicate that this contract is priced above market rates. Conversely, if the pricing aligns with or is lower than comparable contracts, it suggests fair market value. This analysis requires access to a broad dataset of federal procurement information.

What are the specific risks associated with the 'Fixed Price with Economic Price Adjustment' (FP/EPA) contract type for this food service contract?

The 'Fixed Price with Economic Price Adjustment' (FP/EPA) contract type for this food service contract introduces specific risks primarily related to cost volatility. While the base price is fixed, the 'economic price adjustment' clause allows for modifications to the contract price based on fluctuations in specified economic factors, such as the cost of labor, raw food ingredients, fuel, and other operational expenses. The primary risk for the government is that these adjustments could lead to a higher total contract cost than initially anticipated, especially in periods of high inflation or supply chain disruptions. This can impact budget predictability and potentially lead to cost overruns. Conversely, the contractor is protected against unforeseen increases in their input costs, which can incentivize them to bid competitively. Effective risk mitigation involves clearly defining the economic factors subject to adjustment, establishing reasonable adjustment caps, and implementing robust monitoring of market indices.

What is Nayyarsons Corp.'s track record in performing large-scale federal food service contracts?

Assessing Nayyarsons Corp.'s track record in performing large-scale federal food service contracts is vital for understanding their capability and reliability in fulfilling this $24.3 million award. This would involve reviewing their past performance evaluations on similar government contracts, looking for indicators such as on-time delivery, quality of service, adherence to specifications, and client satisfaction. Information on past contract awards, their values, and durations would provide context for their experience. Examining any past disputes, contract terminations, or performance deficiencies would highlight potential risks. A strong track record with positive past performance reviews would suggest a lower risk profile for this contract, while a history of issues might warrant closer scrutiny and more stringent oversight from the U.S. Coast Guard.

How does the competition level (4 bidders) for this contract typically influence pricing and service quality?

A competition level of four bidders for this $24.3 million food services contract generally suggests a moderately competitive market. In a competitive environment, multiple bidders are incentivized to offer the best possible pricing and service quality to win the contract. This typically leads to more favorable terms for the government, including lower prices than might be achieved through a sole-source or limited competition award. The presence of four bidders indicates that the requirement was attractive enough to draw interest from several firms, potentially driving down costs through price competition. Furthermore, competition can spur innovation and encourage higher service standards as contractors strive to differentiate themselves. However, the optimal number of bidders for maximum price reduction can vary; some studies suggest that the most significant price reductions occur with three to five bidders, after which the gains may diminish.

What are the potential implications of awarding a long-term contract (approx. 5.3 years) for food services?

Awarding a long-term contract of approximately 5.3 years (1947 days) for food services has several implications. For the government, it provides service stability and predictability, reducing the administrative burden and costs associated with frequent re-competition. It allows the contractor to make investments in equipment, personnel, and processes, potentially leading to improved efficiency and service quality over time. However, a long-term commitment also carries risks. It can reduce flexibility if the government's needs change significantly during the contract period. Furthermore, if the initial pricing was not sufficiently competitive or if market conditions change unfavorably, the government might be locked into a contract that becomes less cost-effective over its extended duration. The FP/EPA clause in this contract amplifies this risk, as extended periods increase the potential for significant economic adjustments.

Industry Classification

NAICS: Accommodation and Food Services › Special Food Services › Food Service Contractors

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Contractor Details

Address: 3366 HILLSIDE AVENUE, NEW HYDE PARK, NY, 03

Business Categories: 8(a) Program Participant, Category Business, Minority Owned Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business

Financial Breakdown

Contract Ceiling: $28,363,779

Exercised Options: $24,957,156

Current Obligation: $24,269,795

Timeline