DoD's $45.5M aircraft refueling contract with LB & B Associates Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $45,462,108 ($45.5M)

Contractor: LB & B Associates Inc

Awarding Agency: Department of Defense

Start Date: 2009-01-01

End Date: 2017-06-30

Contract Duration: 3,102 days

Daily Burn Rate: $14.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ALONGSIDE AIRCRAFT REFUELING AT NB CORONADO, CA

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92135

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $45.5 million to LB & B ASSOCIATES INC for work described as: ALONGSIDE AIRCRAFT REFUELING AT NB CORONADO, CA Key points: 1. The contract's value appears reasonable when benchmarked against similar specialized freight services. 2. Limited competition may have influenced pricing, though the firm fixed-price structure mitigates some risk. 3. The long duration (3102 days) suggests a stable, long-term need for these specialized refueling services. 4. Performance context is limited, but the contract was awarded by the Defense Logistics Agency, indicating a critical operational requirement. 5. This contract falls within the specialized freight and logistics sector, supporting critical military aviation operations.

Value Assessment

Rating: fair

The total award of $45.5 million over approximately 8.5 years suggests an average annual cost of roughly $5.35 million. Benchmarking this against similar specialized freight and local trucking services indicates a fair, though not exceptionally low, price point. The firm fixed-price contract type provides cost certainty for the government, which is a positive indicator of value management. Without more granular data on the specific services rendered and market rates for specialized aircraft refueling, a precise value-for-money assessment is challenging, but the overall expenditure seems aligned with the operational demands of military aviation support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of 4 bids suggests a moderate level of competition for this specialized service. While full and open competition is generally preferred for ensuring the best possible pricing and innovation, the specific number of bidders (4) means that the market may not be saturated, potentially allowing for slightly higher prices than in a highly competitive scenario with numerous offers. The agency's choice of full and open competition is a positive sign for taxpayer value.

Taxpayer Impact: The use of full and open competition, even with a moderate number of bidders, provides taxpayers with assurance that the government sought the best available offer. This process helps prevent inflated pricing that could occur with less competitive solicitations.

Public Impact

Military personnel and aircraft operating at Naval Base Coronado, CA, benefit from uninterrupted refueling services. The contract ensures the operational readiness and mission capability of aviation units stationed or operating in the region. Geographic impact is concentrated at Naval Base Coronado, CA, supporting local military operations. The contract likely supports a specialized workforce involved in aircraft refueling and related logistics, though specific job numbers are not detailed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 8 years) could lead to complacency or reduced incentive for cost efficiency over time.
Limited number of bidders (4) in a full and open competition might indicate a niche market or high barriers to entry, potentially impacting price competitiveness.
Lack of detailed performance metrics makes it difficult to assess the contractor's efficiency and effectiveness throughout the contract period.

Positive Signals

Firm Fixed Price contract type locks in costs, protecting the government from cost overruns.
Awarded under Full and Open Competition, suggesting a deliberate effort to solicit multiple offers and achieve competitive pricing.
The Defense Logistics Agency's involvement implies a critical and well-vetted requirement for these specialized services.

Sector Analysis

This contract operates within the specialized freight and logistics sector, specifically supporting aviation ground support services. The North American Industry Classification System (NAICS) code 484220, 'Specialized Freight (except Used Goods) Trucking, Local,' categorizes the service. The market for specialized military aviation support services is often characterized by high barriers to entry due to security clearances, specialized equipment, and operational requirements. Comparable spending benchmarks are difficult to establish precisely without knowing the exact scope of refueling operations, but contracts for similar logistical support at major military installations can range from tens to hundreds of millions of dollars over their lifecycles.

Small Business Impact

The contract details indicate that small business participation was not a specific set-aside requirement (ss: false, sb: false). Given the specialized nature of aircraft refueling and the large contract value, it is unlikely that small businesses would be primary awardees unless they were part of a joint venture or subcontracting arrangement. The absence of explicit small business goals suggests that the primary focus was on securing the most capable and cost-effective provider through full and open competition, rather than prioritizing small business inclusion.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA), which is responsible for providing logistics support to the U.S. Armed Forces. DLA typically employs contract officers and quality assurance representatives to monitor performance and ensure compliance with contract terms. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse, with the DLA Office of Inspector General being the relevant body.

Related Government Programs

Defense Logistics Agency Aviation Support Contracts
Military Base Operations Support Services
Aircraft Fueling and Servicing Contracts
Department of Defense Transportation and Logistics Services

Risk Flags

Long contract duration may reduce long-term cost efficiency incentives.
Limited number of bidders could indicate market concentration.
Lack of detailed performance data hinders full value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.5 million to LB & B ASSOCIATES INC. ALONGSIDE AIRCRAFT REFUELING AT NB CORONADO, CA

Who is the contractor on this award?

The obligated recipient is LB & B ASSOCIATES INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $45.5 million.

What is the period of performance?

Start: 2009-01-01. End: 2017-06-30.

What was the specific performance history of LB & B Associates Inc. on this contract?

Detailed performance metrics for LB & B Associates Inc. on this specific contract are not publicly available in the provided data. However, the contract was awarded by the Defense Logistics Agency (DLA), an agency known for its rigorous oversight of critical logistics operations. The fact that the contract was awarded and executed over an extended period (2009-2017) suggests that the contractor met the agency's requirements to a satisfactory degree. Without access to DLA's internal performance evaluations or contractor past performance databases, a comprehensive assessment of their track record on this particular award remains limited. Future analysis could involve reviewing DLA's contract performance reports or any publicly available CPARS (Contractor Performance Assessment Reporting System) data, if applicable.

How does the total contract value of $45.5 million compare to similar aircraft refueling contracts at other naval bases?

Directly comparing the $45.5 million total award to similar contracts at other naval bases is challenging without specific details on the scope of services, duration, and volume of fuel handled. However, the average annual value of this contract is approximately $5.35 million ($45.5M / 8.5 years). This figure appears reasonable for providing specialized aircraft refueling services at a major naval installation like Coronado, which supports significant aviation operations. Larger bases with higher flight hours or more diverse aircraft types might see higher annual expenditures. Conversely, smaller installations or those with less flight activity would likely have smaller contracts. The firm fixed-price nature also contributes to cost predictability, making it a fair benchmark for value.

What are the primary risks associated with a long-duration contract like this (3102 days)?

The primary risks associated with a long-duration contract, such as this 3102-day (approximately 8.5 years) agreement, include potential price escalation beyond initial estimates if not adequately protected by contract clauses, reduced incentive for the contractor to innovate or improve efficiency over time, and the risk of technological obsolescence or changing operational requirements rendering the contracted service less relevant or optimal. For the government, there's also the risk of becoming locked into a provider that may not remain the best value throughout the entire period. However, the firm fixed-price structure here mitigates some financial risk by capping costs. Regular contract reviews and performance monitoring are crucial to manage these long-term risks effectively.

What does the 'Specialized Freight (except Used Goods) Trucking, Local' NAICS code imply about the services provided?

The NAICS code 484220, 'Specialized Freight (except Used Goods) Trucking, Local,' indicates that the core service involves the transportation of specific types of goods that require specialized handling, equipment, or vehicles, and that these services are primarily local in nature. In the context of aircraft refueling at a naval base, this likely refers to the specialized trucking and delivery of aviation fuel to aircraft on the tarmac or at designated refueling points. It implies the use of specialized fuel trucks, trained personnel, and adherence to strict safety and environmental regulations associated with handling and transporting volatile fuels within a localized operational area, rather than long-haul transportation.

Given the contract's value and duration, what is the potential impact on the small business ecosystem?

The potential impact on the small business ecosystem for this specific contract appears minimal, as it was not set aside for small businesses and was awarded to a large prime contractor (LB & B Associates Inc.). Large, long-duration contracts for specialized services often favor established companies with significant resources, infrastructure, and experience. While the prime contractor might engage small businesses for subcontracting opportunities, the absence of explicit small business goals or set-asides means there's no guaranteed pathway for small firms to participate directly. This contract likely represents a significant portion of the prime's revenue, potentially crowding out smaller competitors who might otherwise bid on similar, albeit smaller, service contracts.

Industry Classification

NAICS: Transportation and Warehousing › Specialized Freight Trucking › Specialized Freight (except Used Goods) Trucking, Local

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP060008R0509

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9891 BROKENLAND PARKWAY STE 400, COLUMBIA, MD, 21046

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

Financial Breakdown

Contract Ceiling: $58,527,713

Exercised Options: $45,464,506

Current Obligation: $45,462,108

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline