DoD's $22.9M administrative support contract awarded to Peckham Vocational Industries, Inc. raises value and competition questions

Contract Overview

Contract Amount: $22,965,913 ($23.0M)

Contractor: Peckham Vocational Industries, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-12-20

End Date: 2024-12-31

Contract Duration: 1,107 days

Daily Burn Rate: $20.7K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8508734434!OTHER ADMINISTRATIVE SUPPORT

Place of Performance

Location: LANSING, CLINTON County, MICHIGAN, 48906

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $23.0 million to PECKHAM VOCATIONAL INDUSTRIES, INC. for work described as: 8508734434!OTHER ADMINISTRATIVE SUPPORT Key points: 1. The contract's value appears high relative to the services provided, warranting a closer look at pricing and efficiency. 2. Awarded on a sole-source basis, the lack of competition limits price discovery and potentially inflates costs. 3. The firm-fixed-price structure shifts risk to the contractor but requires careful performance monitoring to ensure value. 4. Performance context is limited due to the 'All Other Business Support Services' NAICS code, making direct comparisons difficult. 5. The contract's duration and value suggest a significant commitment of taxpayer funds for administrative support. 6. The absence of small business set-aside or subcontracting goals warrants examination of opportunities for smaller enterprises.

Value Assessment

Rating: questionable

The contract's total value of $22.9 million over approximately three years for 'All Other Business Support Services' appears substantial. Without specific details on the services rendered, benchmarking against similar contracts is challenging. However, the lack of competition and the broad nature of the NAICS code suggest potential for overpayment if not rigorously managed. The firm-fixed-price type indicates a defined cost, but the overall value proposition needs further scrutiny to ensure it aligns with market rates for comparable administrative support functions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures and was awarded on a sole-source basis. This means that only one vendor, Peckham Vocational Industries, Inc., was considered for this award. The lack of a competitive bidding process limits the government's ability to explore alternative solutions and secure the most cost-effective pricing. It also raises questions about whether a full and open competition was truly not feasible or if other avenues for competition were overlooked.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions typically achieved through competitive bidding. This can lead to higher costs for essential government services.

Public Impact

The primary beneficiary is Peckham Vocational Industries, Inc., which receives a significant contract award. The contract is intended to provide 'All Other Business Support Services' to the Department of Defense. The geographic impact is primarily in Michigan, where Peckham Vocational Industries, Inc. is located. The contract may have implications for the workforce employed by Peckham Vocational Industries, Inc. in Michigan.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Broad NAICS code makes it difficult to assess the specific value and necessity of services.
Sole-source award raises concerns about potential lack of market research and exploration of alternatives.
Contract duration of over three years for administrative support warrants scrutiny of long-term necessity.

Positive Signals

Firm-fixed-price contract shifts performance risk to the contractor.
Award to Peckham Vocational Industries, Inc. may support a specific mission or capability deemed essential by the agency.
The contract is managed by the Defense Logistics Agency, suggesting a structured oversight process.

Sector Analysis

The administrative support services sector is vast and encompasses a wide range of functions critical to government operations. This contract falls under the 'All Other Business Support Services' category (NAICS 561499), which is broad and includes services not elsewhere classified. The total federal spending on administrative support services is substantial, but specific benchmarks for this particular sub-category are difficult to ascertain due to its heterogeneity. The Defense Logistics Agency's role suggests this contract supports the broader defense mission, potentially involving logistics or operational support functions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that opportunities for small business participation may be limited. Given the significant value of the contract, a lack of small business involvement could represent a missed opportunity to foster growth within the small business ecosystem and leverage specialized capabilities that small firms often provide.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Logistics Agency (DLA), a component of the Department of Defense. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency regarding the specific services rendered and performance metrics would be crucial for accountability. The Inspector General of the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Administrative Support Contracts
Defense Logistics Agency Support Services
Business Support Services Federal Spending
Sole-Source Contract Awards
Firm-Fixed-Price Contracts

Risk Flags

Sole-source award
Lack of competition
Broad NAICS code
High contract value for administrative support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.0 million to PECKHAM VOCATIONAL INDUSTRIES, INC.. 8508734434!OTHER ADMINISTRATIVE SUPPORT

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 $23.0 million.

What is the period of performance?

Start: 2021-12-20. End: 2024-12-31.

What specific administrative support services are being provided under this contract?

The contract falls under NAICS code 561499, 'All Other Business Support Services.' This is a broad category that can encompass a wide range of activities, including but not limited to, call centers, document preparation services, collection agencies, credit bureaus, and other business support functions not specified elsewhere. Without further details from the contract award documentation or agency justifications, it is impossible to determine the precise nature of the services. The Defense Logistics Agency (DLA) would have this information, and it is crucial for understanding the value and necessity of the $22.9 million expenditure.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source can provide the required supply or service for a compelling reason. For this contract, the justification for a sole-source award is not provided in the abbreviated data. Potential reasons could include unique capabilities of Peckham Vocational Industries, Inc., urgent and compelling needs where competition is not feasible, or specific program requirements. However, the lack of competition inherently limits price discovery and potentially leads to higher costs for the government. A thorough review of the agency's justification for other than full and open competition (JOFOC) would be necessary to understand the rationale.

How does the $22.9 million value compare to similar administrative support contracts within the DoD or other federal agencies?

Benchmarking this $22.9 million contract is challenging due to the broad NAICS code (561499) and the sole-source nature of the award. General administrative support services can vary significantly in cost depending on the scope, complexity, and location. However, for a contract spanning approximately three years (December 2021 to December 2024), $22.9 million represents a substantial investment. Without specific service details, it's difficult to provide a precise comparison. However, federal spending databases often show a wide range for such services, and a sole-source award of this magnitude warrants scrutiny to ensure it represents fair market value compared to what could be achieved through competition.

What is Peckham Vocational Industries, Inc.'s track record with federal contracts, particularly with the Department of Defense?

Peckham Vocational Industries, Inc. has a history of receiving federal contracts. While the provided data indicates this specific contract is with the Department of Defense via the Defense Logistics Agency, a comprehensive review of their federal contracting history would reveal the extent and nature of their past performance. This would include examining past contract values, types of services provided, performance ratings, and any instances of contract disputes or challenges. Understanding their prior experience and success rate with similar government work is essential for assessing the risk associated with this current award.

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

The primary risk of a sole-source award is the lack of price competition, which can lead to inflated costs for the government. Without competing bids, there is less incentive for the contractor to offer the lowest possible price. Additionally, sole-source awards can limit the government's access to innovative solutions or specialized expertise that other vendors might offer. There's also a risk that the agency may not have fully explored all available market options, potentially overlooking more cost-effective or higher-quality alternatives. This can also raise concerns about fairness and equal opportunity for other businesses.

Are there any performance metrics or oversight mechanisms in place to ensure the effectiveness of the services provided?

As a definitive contract awarded by the Defense Logistics Agency (DLA), it is expected that standard federal contract oversight mechanisms are in place. This would typically include performance work statements (PWS) outlining required services and performance standards, as well as methods for monitoring contractor performance. Firm-fixed-price contracts generally place the responsibility for meeting performance standards on the contractor. However, the effectiveness of these oversight mechanisms depends on the rigor with which DLA monitors the contractor's output, ensures compliance with the PWS, and addresses any deficiencies. Specific details on these metrics and oversight processes are not available in the provided data.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3510 CAPITAL CITY BLVD, LANSING, MI, 48906

Business Categories: AbilityOne Program Participant, Category Business, Corporate Entity Tax Exempt, Manufacturer of Goods, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,061,488

Exercised Options: $22,965,913

Current Obligation: $22,965,913

Actual Outlays: $7,530,870

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline