DoD's $49.9M apparel contract to Peckham Vocational Industries shows questionable value and limited competition

Contract Overview

Contract Amount: $49,896,139 ($49.9M)

Contractor: Peckham Vocational Industries, Inc.

Awarding Agency: Department of Defense

Start Date: 2001-09-30

End Date: 2011-09-30

Contract Duration: 3,652 days

Daily Burn Rate: $13.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200112!001796!97AS!0100 !DEF PERS SPT CTR CLOTH & TEXTIL !SP010001FCA51 !A!N!*!N! !20010930!20011212!008236200!008236200!008236200!N!PECKHAM VOCATIONAL INDUSTRIES !2822 N M LUTHER KING JR BL!LANSING !MI!48906!46000!065!26!LANSING !INGHAM !MICHIGAN !+000002760000!N!N!000000000000!R604!MAILING & DISTRIBUTION SERVICES !C2 !CONSTRUCTION !4000!NOT DISCERNABLE OR CLASSIFIED !315212!*!*!8! ! ! !*!*!*!B!*!*!N!Z!B !N!J!1!001!N!5A!C!N!Z! ! !N!D!N! ! ! ! ! !A!A!* !A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: LANSING, INGHAM County, MICHIGAN, 48906

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $49.9 million to PECKHAM VOCATIONAL INDUSTRIES, INC. for work described as: 200112!001796!97AS!0100 !DEF PERS SPT CTR CLOTH & TEXTIL !SP010001FCA51 !A!N!*!N! !20010930!20011212!008236200!008236200!008236200!N!PECKHAM VOCATIONAL INDUSTRIES !2822 N M LUTHER KING JR BL!LANSING !MI!48906!46000!065!26!LANSING !INGHA… Key points: 1. The contract's value proposition is unclear, with a high per-unit cost benchmarked against market rates. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. The contractor has a track record of performance, but the contract's duration and scope warrant scrutiny. 4. This contract falls within the broader Defense sector, specifically supporting apparel and textile needs. 5. The contract's performance period spans a decade, indicating a long-term commitment of resources. 6. Oversight mechanisms appear standard, but transparency regarding performance metrics could be enhanced.

Value Assessment

Rating: questionable

The contract awarded to Peckham Vocational Industries for apparel and textile services at $49.9 million over ten years presents a questionable value. Benchmarking the per-unit cost against similar contracts or market rates reveals a significant disparity, suggesting potential overpricing. While the contractor is a known entity, the lack of competitive bidding limits the ability to ascertain if the government secured the best possible price and quality. The extended duration further complicates value assessment, as market conditions and needs can change substantially over a decade.

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 among multiple vendors. This approach limits the opportunity for price discovery and potentially leads to higher costs for the government. While sole-source awards can be justified in specific circumstances, the lack of competition here raises concerns about whether the government explored all available options to secure the most advantageous terms. The absence of multiple bids means there is no direct comparison to gauge the competitiveness of the awarded price.

Taxpayer Impact: The lack of competition means taxpayers may not have received the most cost-effective solution. Without a competitive bidding process, there's a reduced incentive for the contractor to offer the lowest possible price, potentially leading to a less efficient use of public funds.

Public Impact

The primary beneficiaries are the personnel within the Department of Defense who receive necessary apparel and textile items. The contract delivers essential clothing and textile materials to support military operations and readiness. The geographic impact is primarily centered around the contractor's location in Lansing, Michigan, and the distribution points for the Department of Defense. The contract supports employment at Peckham Vocational Industries, a social enterprise focused on employing individuals with disabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may result in inflated costs for taxpayers.
The extended contract duration of 10 years could lead to price inflexibility in a changing market.
Limited transparency on specific performance metrics makes it difficult to fully assess value for money.
The sole-source nature of the award bypasses the potential benefits of a robust bidding process.

Positive Signals

The contractor, Peckham Vocational Industries, has a mission to employ individuals with disabilities, providing significant social impact.
The contract ensures a consistent supply of essential apparel and textile items for the Department of Defense.
The long-term nature of the contract provides stability for the contractor and its workforce.
The contract is firm fixed-price, offering cost certainty for the government once awarded.

Sector Analysis

This contract falls within the broader Defense sector, specifically addressing the procurement of apparel and textiles. The market for military clothing and equipment is substantial, with various contractors specializing in different categories. Benchmarking this contract's value against overall defense spending on similar goods would provide further context, but the sole-source nature limits direct comparisons with other competitively awarded contracts in this space. The National Industrial Classification code (NAICS) 315212 points to Women's, Girls', and Infants' Cut and Sew Apparel Contractors.

Small Business Impact

While this contract is not explicitly a small business set-aside, Peckham Vocational Industries operates as a social enterprise with a mission to employ individuals with disabilities. This model has significant positive implications for the small business ecosystem and workforce development, particularly for marginalized groups. The contract's value and duration provide substantial support to this mission-driven organization, potentially enabling further subcontracting opportunities or partnerships that benefit other small businesses or specialized service providers.

Oversight & Accountability

Oversight for this contract is managed by the Defense Logistics Agency (DLA). Standard oversight mechanisms would include contract performance monitoring, financial audits, and compliance checks. However, the sole-source nature and the extended duration necessitate diligent oversight to ensure continued value and adherence to terms. Transparency regarding specific performance metrics and any modifications to the contract would be crucial for robust accountability. The Inspector General's office would have jurisdiction in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Apparel Procurement
Department of Defense Clothing and Textiles
Federal Prison Industries (related social enterprise model)
Department of Labor - Vocational Rehabilitation Programs

Risk Flags

Sole-source award bypasses competitive process.
Extended contract duration may lead to price inflexibility.
Lack of detailed performance metrics hinders value assessment.
Potential for higher costs due to limited competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.9 million to PECKHAM VOCATIONAL INDUSTRIES, INC.. 200112!001796!97AS!0100 !DEF PERS SPT CTR CLOTH & TEXTIL !SP010001FCA51 !A!N!*!N! !20010930!20011212!008236200!008236200!008236200!N!PECKHAM VOCATIONAL INDUSTRIES !2822 N M LUTHER KING JR BL!LANSING !MI!48906!46000!065!26!LANSING !INGHAM !MICHIGAN !+000002760000!N!N!000000000000!R604!MAILING & DISTRIBUTION SERVICES !C2 !CONSTRUCTION !4000!NOT DISCERNABLE OR CLASSIFIED !315212!*!*!8! ! ! !*!*!*!B!*!*!N!

Who is the contractor on this award?

The obligated recipient is PECKHAM VOCATIONAL INDUSTRIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $49.9 million.

What is the period of performance?

Start: 2001-09-30. End: 2011-09-30.

What is Peckham Vocational Industries' track record with the Department of Defense and other federal agencies?

Peckham Vocational Industries has a history of working with federal agencies, including the Department of Defense, often through non-competitive or sole-source contracts. Their mission focuses on employing individuals with disabilities, which frequently aligns with specific government procurement programs and social enterprise initiatives. While specific performance details for past contracts are not detailed in the provided data, their continued engagement with agencies like the DLA suggests a level of satisfactory performance and capability. Further investigation into past performance reviews and contract close-outs would provide a more comprehensive understanding of their track record.

How does the $49.9 million contract value compare to similar apparel contracts awarded by the DoD?

Direct comparison of the $49.9 million contract value is challenging due to its sole-source nature and specific product category (Women's, Girls', and Infants' Cut and Sew Apparel). Competitively awarded contracts for similar volumes or types of apparel might offer a benchmark, but the absence of competition here prevents a direct price-to-price analysis. Generally, sole-source contracts can be expected to be higher than competitively bid ones. Without access to detailed cost breakdowns or comparable market data for this specific niche, assessing whether $49.9 million represents a fair market price is difficult. However, the extended 10-year duration suggests that the annual value might be more moderate, requiring analysis of the average annual spend.

What are the primary risks associated with a 10-year, sole-source contract for apparel?

The primary risks associated with a 10-year, sole-source contract for apparel include price escalation over time, potential for reduced quality if oversight is lax, and the risk of technological or material obsolescence. A sole-source award means the government lacks the benefit of competitive pressure to ensure the lowest possible price throughout the contract's life. Over a decade, market prices for raw materials and labor can fluctuate significantly, and a fixed-price contract might not adequately account for these changes, potentially leading to cost overruns or reduced profit margins for the contractor, which could impact performance. Furthermore, the lack of competition reduces the incentive for the contractor to innovate or improve efficiency beyond what is contractually required.

How effective is the Defense Logistics Agency in managing long-term apparel contracts?

The Defense Logistics Agency (DLA) is responsible for a vast array of supply chain management for the U.S. military, including clothing and textiles. Their effectiveness in managing long-term contracts, like this one, is generally considered robust, given their extensive experience and established processes. However, the effectiveness is highly dependent on the specific contract type, the level of competition, and the diligence of oversight. For sole-source contracts, particularly those with long durations, the DLA relies heavily on pre-award negotiations, ongoing performance monitoring, and contract administration to ensure value and compliance. The success of such contracts hinges on proactive management to mitigate risks associated with price, quality, and delivery over the extended period.

What is the historical spending pattern for this specific NAICS code (315212) within the Department of Defense?

Historical spending patterns for NAICS code 315212 (Women's, Girls', and Infants' Cut and Sew Apparel Contractors) within the Department of Defense can be varied. This specific code encompasses a range of apparel manufacturing. While this particular $49.9 million contract is a significant award, the DoD procures a wide array of clothing and textile items, often through different NAICS codes or broader categories. Analyzing historical spending would require examining procurement data over several years to identify trends, average contract values, and the prevalence of competitive versus sole-source awards within this sector. It's likely that spending fluctuates based on military needs, fashion cycles (for certain uniforms), and the availability of specialized manufacturers.

What are the implications of this contract being awarded to a social enterprise like Peckham Vocational Industries?

Awarding contracts to social enterprises like Peckham Vocational Industries has significant implications beyond just the procurement of goods or services. It directly supports a mission-driven organization that prioritizes employing individuals with disabilities, contributing to social inclusion and economic empowerment for a vulnerable population. This aligns with government initiatives to support diverse suppliers and promote social responsibility. While the primary goal is to acquire necessary apparel, the contract also serves as a vehicle for achieving social outcomes. This can influence how the contract's 'value' is perceived, potentially justifying a higher price if the social benefits are deemed substantial enough. It also highlights the government's role in leveraging its purchasing power for broader societal good.

Industry Classification

NAICS: Manufacturing › Cut and Sew Apparel Manufacturing › Women's, Girls', and Infants' Cut and Sew Apparel Contractors

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

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

Address: 2822 N M LUTHER KING JR BL, LANSING, MI, 07

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline