DoD's $128M logistics support contract to CACI, Inc. shows fair competition and potential value concerns

Contract Overview

Contract Amount: $128,233,737 ($128.2M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2004-12-10

End Date: 2009-12-31

Contract Duration: 1,847 days

Daily Burn Rate: $69.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: 200504!053000!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014005C0016 !A!N! !Y! ! !20041210!20051231!114896066!094107844!045534641!N!CACI, INC - FEDERAL !14151 PARK MEADOW DRIVE !CHANTILLY !VA!20151!14744!059!51!CHANTILLY !FAIRFAX !VIRGINIA !+000000682193!N!N!000015916472!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !541614!E! !3! ! ! ! ! !20200930!B! ! !A! !A!N!U!2!002!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!D!N! ! ! ! !1700!N00023!0001! !

Place of Performance

Location: MECHANICSBURG, CUMBERLAND County, PENNSYLVANIA, 17055

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $128.2 million to CACI, INC. - FEDERAL for work described as: 200504!053000!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014005C0016 !A!N! !Y! ! !20041210!20051231!114896066!094107844!045534641!N!CACI, INC - FEDERAL !14151 PARK MEADOW DRIVE !CHANTILLY !VA!20151!14744!059!51!CHANTILLY !FAIR… Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize increased spending. 2. Competition was robust, with multiple bids received, suggesting a competitive market. 3. The contract duration of nearly five years raises questions about long-term necessity and potential for cost escalation. 4. Performance context is limited, making it difficult to assess the true value delivered. 5. Sector positioning is within a critical defense logistics support area, vital for operational readiness. 6. The contract's value, while substantial, needs benchmarking against similar services to confirm cost-effectiveness.

Value Assessment

Rating: fair

The awarded amount of $128.2 million over nearly five years for logistics support services appears within a reasonable range for large-scale defense contracts. However, the cost-plus-fixed-fee (CPFF) contract type, while common for complex services where costs are uncertain, can lead to higher overall expenditures compared to fixed-price contracts if not managed tightly. Benchmarking against similar contracts for logistics support is crucial to determine if CACI's pricing reflects fair market value and efficient resource utilization. Without detailed performance metrics and cost breakdowns, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows two bids were received, which suggests a moderate level of competition. While two bidders are better than one, a higher number of bids typically leads to more aggressive pricing and a clearer indication of market rates. The limited number of bidders could mean that the market for this specific type of specialized logistics support is concentrated among a few large firms.

Taxpayer Impact: The full and open competition is positive for taxpayers, as it theoretically allows for the best possible pricing. However, with only two bids, there's a risk that the price may not be as competitive as it could be with broader participation.

Public Impact

The Department of the Navy benefits from enhanced fleet and industrial supply chain management. Services delivered include critical logistics support, ensuring operational readiness for naval forces. Geographic impact is likely nationwide, supporting various naval installations and operations. Workforce implications include employment opportunities within CACI and potentially its subcontractors, supporting specialized logistics roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type may lead to cost overruns if not closely monitored.
Limited number of bidders (2) could indicate a lack of robust competition, potentially inflating prices.
Long contract duration (nearly 5 years) increases the risk of scope creep and price adjustments.
Lack of detailed performance data makes it difficult to assess the true value for money.
The specific nature of logistics support can be complex, making oversight challenging.

Positive Signals

Awarded under full and open competition, maximizing potential for competitive pricing.
Contractor (CACI, Inc.) is a known entity in federal contracting, suggesting some level of established capability.
The contract addresses a critical need for defense logistics, supporting national security objectives.
The fixed fee component of the CPFF contract provides some cost certainty for the government.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, specifically focusing on logistics consulting and support. This sector is crucial for government operations, particularly in defense, where efficient supply chain management is paramount. The market for defense logistics services is substantial, dominated by a few large contractors capable of handling complex, long-term requirements. Spending benchmarks for similar logistics support contracts within the DoD can vary widely based on scope, duration, and specific services, but contracts in the tens to hundreds of millions of dollars are not uncommon for major support functions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-value contract likely requiring extensive resources and specialized expertise, it is typical for such awards to go to large businesses. There is no explicit information on subcontracting plans, but for contracts of this magnitude, it is common practice for prime contractors to engage small businesses for specific components or services, which could offer some opportunities within the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. The cost-plus-fixed-fee structure necessitates rigorous oversight of costs incurred and the justification for the fixed fee. Transparency is facilitated through contract reporting mechanisms, but detailed performance and cost data may not always be publicly accessible. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse, with the DoD IG likely having oversight.

Related Government Programs

Defense Logistics Agency (DLA) contracts
Naval Sea Systems Command (NAVSEA) support contracts
Department of Defense IT and professional services contracts
Supply Chain Management services for federal agencies
Fleet readiness support contracts

Risk Flags

Cost-Plus-Fixed-Fee contract type
Limited number of bidders
Long contract duration
Potential for cost escalation
Lack of detailed performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $128.2 million to CACI, INC. - FEDERAL. 200504!053000!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014005C0016 !A!N! !Y! ! !20041210!20051231!114896066!094107844!045534641!N!CACI, INC - FEDERAL !14151 PARK MEADOW DRIVE !CHANTILLY !VA!20151!14744!059!51!CHANTILLY !FAIRFAX !VIRGINIA !+000000682193!N!N!000015916472!R706!LOGISTICS SUPPORT SERVICES !S1 !SERVICES !000 !* !541614!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $128.2 million.

What is the period of performance?

Start: 2004-12-10. End: 2009-12-31.

What is CACI, Inc.'s track record with similar large-scale DoD logistics contracts?

CACI, Inc. is a well-established federal contractor with a significant history of performing IT and professional services for the Department of Defense and other federal agencies. They frequently win large, complex contracts, including those related to logistics, C4ISR, and enterprise IT. Their track record includes numerous awards for services similar in nature to this contract, often involving extensive support operations, system integration, and program management. While their overall performance history is extensive, a detailed review of past performance on specific, comparable logistics contracts would be necessary to fully assess their capabilities and reliability in this particular domain. Past performance evaluations, if available through federal procurement data systems, would provide deeper insights into their success rates, adherence to schedules, and cost control.

How does the $128.2 million value compare to similar logistics support contracts awarded by the Navy or DoD?

The $128.2 million value over approximately five years places this contract in the mid-to-large tier for specialized logistics support services within the Department of Defense. Contracts of this nature, especially those supporting fleet readiness and industrial supply chains, can range significantly. For instance, larger, more comprehensive support contracts might exceed several hundred million dollars, while smaller, more focused engagements could be in the tens of millions. Benchmarking this specific contract against others with similar scopes (e.g., fleet-wide support, specific system logistics, or depot-level maintenance coordination) awarded by the Naval Sea Systems Command (NAVSEA) or the Defense Logistics Agency (DLA) would be essential. Without direct comparisons, it's difficult to definitively state if this represents exceptional value, a fair market price, or a potentially inflated cost, though the CPFF structure warrants careful scrutiny.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for logistics support?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for logistics support is the potential for cost overruns and reduced incentive for the contractor to control expenses. In a CPFF structure, the government agrees to pay the contractor's allowable costs plus a predetermined fixed fee representing profit. While the fixed fee provides some cost certainty regarding profit, the contractor is reimbursed for all legitimate costs incurred. This can incentivize the contractor to incur higher costs, as their profit remains constant regardless of the total cost. For complex logistics operations, where costs can be variable and difficult to predict precisely, this structure requires robust government oversight to ensure costs are reasonable, allocable, and necessary. Without stringent monitoring and clear performance metrics, the government may end up paying more than necessary for the services rendered.

How effective is 'full and open competition' when only two bids are received for a contract of this size?

When 'full and open competition' results in only two bids for a contract of this magnitude ($128.2 million), its effectiveness in driving down prices and ensuring the best value is diminished compared to scenarios with numerous bidders. While it signifies that the opportunity was broadly advertised and multiple firms were eligible, the limited number of actual bids suggests potential market concentration, high barriers to entry for potential competitors, or perhaps a highly specialized niche service. With only two offers, the government has less leverage to negotiate aggressively on price, and the risk increases that the chosen contractor's price may not be as competitive as it would be in a more crowded field. It necessitates careful evaluation of the proposals received to ensure the selected offer represents the best value, even with limited options.

What are the historical spending patterns for logistics support services within the Department of the Navy?

Historical spending patterns for logistics support services within the Department of the Navy are substantial and have consistently represented a significant portion of the Navy's overall budget. The Navy relies heavily on complex logistics networks to maintain its global presence, manage vast inventories of parts and equipment, and ensure the operational readiness of its fleet. Spending in this category typically includes services such as supply chain management, inventory control, transportation, maintenance support, and depot operations. Over the years, the Navy has increasingly contracted out these services to private industry, leading to multi-billion dollar annual expenditures across various contracts. Factors influencing these patterns include geopolitical events, fleet modernization programs, and shifts in defense strategy, all of which can drive demand and funding for logistics support.

What are the implications of the contract's duration (nearly 5 years) on long-term cost efficiency and contractor performance?

A contract duration of nearly five years for logistics support services has several implications for long-term cost efficiency and contractor performance. On the positive side, a longer duration can provide stability and predictability for both the government and the contractor, potentially leading to economies of scale and reduced transition costs. It allows the contractor to invest in specialized resources and personnel, fostering deeper expertise. However, a long contract also increases the risk of complacency, potential cost escalation over time (especially with CPFF), and the possibility that the contracted services may become outdated or less efficient compared to evolving market solutions. It necessitates robust performance management and periodic reviews to ensure the contractor remains incentivized to perform optimally and that the services continue to meet the government's needs effectively and affordably throughout the contract period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14151 PARK MEADOW DRIVE, CHANTILLY, VA, 20151

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline