DoD's $20.7M Navy contract for logistics support awarded to McLaughlin Research Corporation

Contract Overview

Contract Amount: $20,674,965 ($20.7M)

Contractor: Mclaughlin Research Corporation

Awarding Agency: Department of Defense

Start Date: 2021-04-01

End Date: 2026-03-31

Contract Duration: 1,825 days

Daily Burn Rate: $11.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: NAVSEALOGCEN WEST CONTRACTOR SHALL PROVIDED SERVICE FOR THE FOLLOWING(BUT NOT LIMITED TO): MATERIAL RECEIPT AND INSPECTION, MATERIAL STORAGE, WAREHOUSING, ISSUING, DISPOSITION SUPPORT, INVENTORY MANAGEMENT, CUSTOMER SERVICE SUPPORT, MATERIAL MOVEMENT

Place of Performance

Location: KEYPORT, KITSAP County, WASHINGTON, 98345

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $20.7 million to MCLAUGHLIN RESEARCH CORPORATION for work described as: NAVSEALOGCEN WEST CONTRACTOR SHALL PROVIDED SERVICE FOR THE FOLLOWING(BUT NOT LIMITED TO): MATERIAL RECEIPT AND INSPECTION, MATERIAL STORAGE, WAREHOUSING, ISSUING, DISPOSITION SUPPORT, INVENTORY MANAGEMENT, CUSTOMER SERVICE SUPPORT, MATERIAL MOVEMENT Key points: 1. Contract provides essential material receipt, inspection, storage, warehousing, issuing, disposition, inventory management, customer service, and material movement. 2. The contract's cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 3. Full and open competition was utilized, suggesting a potentially competitive bidding process. 4. The contract duration of five years indicates a long-term need for these services. 5. The contract is categorized under Engineering Services, aligning with the technical nature of logistics support. 6. The geographic location of service in Washington State may have implications for local workforce and economic impact.

Value Assessment

Rating: good

The contract's total value of $20.7 million over five years averages approximately $4.14 million annually. Benchmarking this against similar logistics support contracts within the Department of Defense is challenging without more specific service details. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, requires diligent oversight to ensure cost efficiency. The fixed fee component provides some predictability, but the cost reimbursement aspect necessitates robust auditing to prevent unnecessary expenditures.

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 presence of 10 offers suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple companies to vie for the contract, driving down prices and improving the quality of services offered.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational readiness, ensuring efficient management of critical materials. Services delivered include comprehensive logistics support, encompassing the entire lifecycle of materials from receipt to disposition. The geographic impact is concentrated in Washington State, where the services will be performed. Workforce implications include the potential for job creation and utilization of skilled logistics and technical personnel in the Washington area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep under the CPFF structure if not rigorously managed.
Dependence on a single contractor for critical logistics functions could pose a risk if performance falters.
Ensuring consistent service quality across the five-year duration requires ongoing performance monitoring.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Long-term contract duration suggests a stable and ongoing need, providing continuity of services.
The contractor, McLaughlin Research Corporation, likely possesses relevant experience for this type of support.

Sector Analysis

This contract falls within the Engineering Services sector, specifically focusing on logistics and material management. The market for defense logistics support is substantial, with numerous companies specializing in these areas. This contract represents a significant portion of spending for the Naval Sea Logistics Command Center West, highlighting the importance of efficient supply chain management for naval operations. Comparable spending benchmarks would typically involve analyzing other large-scale logistics support contracts awarded by the DoD.

Small Business Impact

The data provided does not indicate any specific small business set-aside provisions for this contract. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus was on securing the best overall offer through full and open competition, rather than specifically targeting small business participation. The impact on the small business ecosystem would depend on whether McLaughlin Research Corporation utilizes small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Navy. Performance monitoring, invoice review, and adherence to contract terms are key accountability measures. Transparency is facilitated through contract award databases, but detailed operational oversight specifics are internal to the agency. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Supply Systems Command (NAVSUP)
Defense Logistics Agency (DLA)
Department of Defense Logistics and Supply Chain Management
Naval Sea Systems Command (NAVSEA)

Risk Flags

Cost-Plus-Fixed-Fee (CPFF) pricing structure requires diligent oversight to manage costs.
Long-term contract duration necessitates sustained performance monitoring.
Dependence on contractor for critical logistics functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to MCLAUGHLIN RESEARCH CORPORATION. NAVSEALOGCEN WEST CONTRACTOR SHALL PROVIDED SERVICE FOR THE FOLLOWING(BUT NOT LIMITED TO): MATERIAL RECEIPT AND INSPECTION, MATERIAL STORAGE, WAREHOUSING, ISSUING, DISPOSITION SUPPORT, INVENTORY MANAGEMENT, CUSTOMER SERVICE SUPPORT, MATERIAL MOVEMENT

Who is the contractor on this award?

The obligated recipient is MCLAUGHLIN RESEARCH CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.7 million.

What is the period of performance?

Start: 2021-04-01. End: 2026-03-31.

What is McLaughlin Research Corporation's track record with similar DoD contracts?

McLaughlin Research Corporation has a history of performing various technical and support services for the Department of Defense. While specific details on past logistics contracts of this exact scale are not immediately available in this dataset, their general experience suggests a capability to handle complex requirements. A deeper dive into their contract history, including past performance evaluations and any reported issues on previous awards, would provide a more comprehensive understanding of their reliability and expertise in fulfilling such critical logistics functions. Examining their performance on other cost-plus-fixed-fee contracts would also be informative regarding their ability to manage costs effectively under this pricing structure.

How does the pricing of this contract compare to similar logistics support services?

Directly comparing the pricing of this $20.7 million, five-year contract without detailed service breakdowns and market-specific cost drivers is difficult. The cost-plus-fixed-fee (CPFF) structure means the government reimburses allowable costs plus a fixed fee, making the total cost variable based on actual expenses. To benchmark effectively, one would need to analyze the labor rates, overhead allocations, and the fixed fee percentage against industry standards for comparable services in the Washington State region and within the DoD. Factors like the complexity of inventory, the criticality of materials handled, and the required security clearances can significantly influence costs. A thorough review of the awarded fixed fee relative to the estimated cost would also be crucial.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks include potential cost overruns due to the CPFF structure, contractor performance issues impacting operational readiness, and potential disruptions if the contractor faces financial or operational difficulties. Mitigation strategies typically involve robust contract oversight by the COR, detailed performance work statements, regular progress reviews, and strict adherence to allowable cost principles. The government also retains the right to audit costs and performance. Furthermore, the competitive nature of the initial award suggests a pool of capable contractors, reducing reliance on a single entity in the long term, although this specific award is to one contractor. Contingency planning by the Navy would also address potential service interruptions.

How effective is the current contract in meeting the Navy's logistics needs?

The effectiveness of this contract is primarily measured by the contractor's ability to consistently meet the performance metrics outlined in the Performance Work Statement (PWS). This includes timely material receipt and inspection, accurate inventory management, efficient warehousing, and responsive customer service. Success hinges on the contractor's operational efficiency, adherence to procedures, and the quality of their personnel. Regular performance evaluations, user feedback from Navy personnel interacting with the logistics services, and key performance indicators (KPIs) related to inventory accuracy, order fulfillment times, and material availability would be used to assess effectiveness. The five-year duration suggests the Navy anticipates sustained effectiveness.

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

Historical spending patterns for similar logistics support services within the Department of the Navy are substantial and reflect the vast scale of naval operations. The Navy, like other branches of the DoD, relies heavily on contracted services for supply chain management, warehousing, and material handling to maintain readiness. Annual spending in this category can run into billions of dollars across various commands and installations. Analyzing past contracts awarded by NAVSUP, NAVSEA, and regional commands would reveal trends in contract values, duration, competition levels, and the types of services most frequently outsourced. This specific $20.7 million contract is one component within this larger spending picture.

What is the significance of the 'Engineering Services' classification (NAICS 541330) for this logistics contract?

The classification under NAICS code 541330, 'Engineering Services,' for a logistics support contract might seem unusual at first glance. However, it often signifies that the logistics services require a significant degree of technical expertise, planning, and management that goes beyond simple warehousing or transportation. This could include complex inventory systems management, technical inspection of materials, disposition planning for specialized or hazardous materials, and the integration of logistics operations with broader engineering or maintenance programs. The 'engineering' aspect likely refers to the systematic and technical approach required to manage the flow and storage of materials critical to naval operations, rather than traditional design or development engineering.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6426720R3005

Offers Received: 12

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 130 EUGENE O'NEILL DR, NEW LONDON, CT, 06320

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

Financial Breakdown

Contract Ceiling: $23,789,292

Exercised Options: $23,777,247

Current Obligation: $20,674,965

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8089

IDV Type: IDC

Timeline