DoD's $43M Facilities Support Services contract awarded to Chugach McKinley, Inc. lacked competition

Contract Overview

Contract Amount: $43,026,200 ($43.0M)

Contractor: Chugach Mckinley, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-10-29

End Date: 2009-03-31

Contract Duration: 1,980 days

Daily Burn Rate: $21.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: KING GEORGE, KING GEORGE County, VIRGINIA, 22485

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $43.0 million to CHUGACH MCKINLEY, INC. for work described as: Key points: 1. The contract's value of $43 million over its duration suggests a significant investment in facilities support. 2. The lack of competition raises concerns about potential overpayment and reduced incentive for cost efficiency. 3. Performance context is limited without specific metrics, but the duration implies a sustained need for these services. 4. The contract falls within the facilities support services sector, a common area for government outsourcing. 5. The award to a single entity without a competitive process warrants scrutiny regarding best value for taxpayers.

Value Assessment

Rating: questionable

Benchmarking the value of this $43 million contract is challenging without detailed performance data and comparison to similar facilities support services contracts. The lack of competition suggests that the government may not have secured the most competitive pricing. Without a competitive bidding process, it's difficult to assess if the price paid represents fair market value or if alternative, more cost-effective solutions were overlooked. The fixed-price nature of the contract provides some cost certainty, but the absence of competition limits the ability to definitively state it represents excellent value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This indicates that the Department of Defense identified a specific contractor, Chugach McKinley, Inc., deemed uniquely capable or necessary for these facilities support services. The absence of multiple bidders means there was no direct price comparison or negotiation driven by market forces. This approach can be justified in certain circumstances, such as when a contractor possesses unique expertise or is the incumbent with critical institutional knowledge, but it bypasses the standard competitive process designed to foster price discovery.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions and innovations typically driven by a competitive bidding environment. This can lead to higher costs than might be achieved through open competition.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel, who receive essential facilities support services. Services delivered likely include maintenance, repair, operations, and potentially other facility management functions. The geographic impact is tied to the specific military installations or facilities managed by Chugach McKinley, Inc. within Virginia. Workforce implications include employment opportunities for individuals working for Chugach McKinley, Inc. in facility management and support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Absence of competitive pressure could reduce contractor incentive for efficiency.
Limited transparency into the justification for sole-source award.
Potential for vendor lock-in if contractor's expertise is highly specialized.

Positive Signals

Contract awarded to a single entity, potentially indicating specialized capabilities.
Long contract duration suggests a stable and ongoing need for services.
Fixed-price contract provides some cost predictability.

Sector Analysis

Facilities Support Services is a broad category encompassing a wide range of services essential for the operation and maintenance of government and commercial buildings. This sector is characterized by numerous providers, ranging from small local businesses to large multinational corporations. Government spending in this area is substantial, reflecting the vast real estate holdings of federal agencies. Contracts can include everything from janitorial services and landscaping to complex building systems maintenance and energy management. Benchmarking requires comparing specific service scopes and contract values within this diverse industry.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of subcontracting requirements for small businesses (sb: false). This suggests that the primary awardee, Chugach McKinley, Inc., is likely a larger entity, and the contract did not include specific provisions to ensure small business participation. Consequently, the direct impact on the small business ecosystem through this particular award appears minimal, unless the prime contractor voluntarily engages small businesses as subcontractors without a formal set-aside requirement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award, making it harder for the public to scrutinize the decision-making process. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise concerning the contract's execution.

Related Government Programs

Base Operations Support Services
Facilities Maintenance Contracts
Government Property Management
Logistics and Support Services

Risk Flags

Lack of Competition
Sole-Source Award Justification Unclear

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.0 million to CHUGACH MCKINLEY, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is CHUGACH MCKINLEY, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $43.0 million.

What is the period of performance?

Start: 2003-10-29. End: 2009-03-31.

What specific facilities support services were included in this contract?

The contract NAICS code 561210, Facilities Support Services, indicates a broad scope of potential services. While the specific details are not provided in the abbreviated data, these services typically encompass a wide range of activities necessary for the operation and maintenance of physical facilities. This can include, but is not limited to, routine maintenance and repair of buildings and grounds, custodial services, pest control, refuse collection, security services, mail services, and potentially specialized functions like energy management or environmental services. The duration of the contract (1980 days, approximately 5.4 years) suggests a comprehensive and ongoing requirement for these support functions at the designated Department of Defense locations.

What is the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' (ct: NOT COMPETED), which is synonymous with a sole-source award. The specific justification for this determination is not included in the abbreviated data. Typically, sole-source awards are made when only one responsible source is available or capable of providing the required services. This could be due to unique capabilities, proprietary technology, critical infrastructure needs, or situations where a follow-on contract is awarded to the incumbent contractor under specific regulatory exceptions. Without the official justification document (e.g., a Justification and Approval for Other Than Full and Open Competition), it is impossible to ascertain the precise reasons why this contract was not competed.

How does the contract value of $43 million compare to similar facilities support contracts?

Comparing the $43 million contract value to similar facilities support contracts requires access to a broader dataset of government procurements and detailed knowledge of the specific services rendered. Facilities support services can vary significantly in scope and complexity, making direct comparisons difficult. However, for a contract spanning approximately 5.4 years (1980 days), $43 million translates to an average annual value of roughly $8 million. This figure is substantial and suggests a significant scope of services, likely encompassing multiple facilities or a large, complex installation. Without knowing the specific locations, the types of services (e.g., basic janitorial vs. comprehensive facility management), and the performance period, it's hard to definitively benchmark this value. However, it falls within the range of significant federal facilities support contracts.

What are the potential risks associated with a sole-source award for facilities support?

The primary risk associated with a sole-source award for facilities support is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the most favorable pricing. There's also a risk of reduced contractor performance incentives, as the contractor may feel less compelled to innovate or improve efficiency when their position is guaranteed. Furthermore, a sole-source award can limit the government's access to new technologies or service delivery models that might be offered by other potential providers. Finally, it raises questions about the thoroughness of market research and the justification for bypassing the standard competitive procurement process, potentially indicating a missed opportunity for better value.

What is the track record of Chugach McKinley, Inc. in performing facilities support services?

The provided data identifies Chugach McKinley, Inc. as the contractor for this $43 million facilities support services contract with the Department of Defense. To assess their track record, one would need to examine their past performance on this and other government contracts. Key indicators would include past performance evaluations, any history of contract disputes, timely delivery of services, and adherence to quality standards. The fact that they were awarded this significant contract, even on a sole-source basis, suggests they possess certain capabilities deemed necessary by the agency. However, a comprehensive understanding of their track record would require accessing detailed performance reports and potentially other contract awards they have received.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Alaska Corporation (UEI: 071844021)

Address: 560 EAST 34TH AVENUE, ANCHORAGE, AK, 00

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline