DoD's $12.9M administrative support contract awarded to Peckham Vocational Industries, Inc. raises value-for-money questions

Contract Overview

Contract Amount: $12,962,961 ($13.0M)

Contractor: Peckham Vocational Industries, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-12-04

End Date: 2026-06-30

Contract Duration: 573 days

Daily Burn Rate: $22.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8511033413!OTHER ADMINISTRATIVE SUPPORT

Place of Performance

Location: LANSING, CLINTON County, MICHIGAN, 48906

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $13.0 million to PECKHAM VOCATIONAL INDUSTRIES, INC. for work described as: 8511033413!OTHER ADMINISTRATIVE SUPPORT Key points: 1. The contract's value-for-money is questionable given the lack of competitive bidding and limited performance data. 2. Competition dynamics are absent, with a 'NOT AVAILABLE FOR COMPETITION' award, potentially leading to higher costs. 3. Risk indicators include the sole-source nature and the absence of a clear performance benchmark. 4. Performance context is limited, with a firm-fixed-price contract type but no detailed performance metrics provided. 5. Sector positioning is within administrative support services, a broad category with varying market rates. 6. The contract duration of 573 days suggests a need for ongoing support, but the justification for sole-source is unclear.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without competitive pricing. Awarded at $12.9 million, it's unclear if this represents a fair market price due to the sole-source nature. Benchmarking against similar administrative support contracts would be necessary to determine if the pricing is competitive. The lack of transparency in the procurement process hinders a robust value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source justification, meaning it was not competed openly. The data indicates 'NOT AVAILABLE FOR COMPETITION,' suggesting a specific reason for not soliciting bids from multiple vendors. This lack of competition limits price discovery and may result in a less favorable price for the government.

Taxpayer Impact: Taxpayers may be paying a premium for services that could have been procured at a lower cost through a competitive bidding process. The absence of competition reduces the government's leverage to negotiate the best possible price.

Public Impact

The primary beneficiaries are Peckham Vocational Industries, Inc. and its employees, who will provide administrative support services. Services delivered include 'All Other Business Support Services,' a broad category that likely encompasses tasks such as clerical support, data entry, and general administrative functions. The geographic impact is centered in Michigan, where Peckham Vocational Industries, Inc. is located, suggesting local workforce implications. Workforce implications include job creation and retention within the administrative support sector, particularly in Michigan.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source awards can reduce government leverage in price negotiations.
Limited transparency in the procurement process hinders value assessment.
The broad nature of 'All Other Business Support Services' makes specific performance monitoring challenging.

Positive Signals

Award to a specific vocational industry may align with socio-economic goals.
Firm fixed-price contract type provides cost certainty for the government.
The contract duration indicates a sustained need for these services.

Sector Analysis

This contract falls within the administrative and business support services sector, a broad category encompassing a wide range of services essential for government operations. The market for these services is competitive, with numerous firms offering specialized support. However, the specific niche of vocational industries may have fewer direct competitors for certain types of awards. Benchmarking would require comparing to similar administrative support contracts, ideally those also awarded through competitive processes.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from this specific award. The focus is on a larger prime contractor, and the impact on the broader small business ecosystem is indirect, primarily through the potential for larger prime contractors to engage small businesses in their supply chains, which is not specified here.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of Defense and the Defense Logistics Agency. Accountability measures would be tied to the terms of the firm-fixed-price contract and the delivery of 'All Other Business Support Services.' Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Administrative Support Services
Business Support Services
Logistics Support Contracts
Department of Defense Procurement
Sole-Source Contracts

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Limited transparency in procurement
Unclear performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.0 million to PECKHAM VOCATIONAL INDUSTRIES, INC.. 8511033413!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 $13.0 million.

What is the period of performance?

Start: 2024-12-04. End: 2026-06-30.

What is the track record of Peckham Vocational Industries, Inc. in performing similar administrative support contracts for the federal government?

Information regarding Peckham Vocational Industries, Inc.'s specific track record in performing similar administrative support contracts for the federal government is not detailed in the provided data. To assess their performance history, a deeper dive into federal procurement databases like FPDS-NG or SAM.gov would be necessary. This would involve searching for past awards to the contractor, examining contract values, performance reviews (if publicly available), and any history of contract modifications or disputes. Without this specific data, it's challenging to definitively gauge their experience and past success in delivering comparable services.

How does the awarded price of $12.9 million compare to market rates for similar administrative support services, especially considering the sole-source nature?

Directly comparing the $12.9 million award to market rates is difficult without more specific details on the scope of services and the contract duration. However, the sole-source nature of the award is a significant factor. Typically, competitive bidding drives prices down. A sole-source award suggests that either no other vendors could meet the requirement or a specific justification was made to bypass competition. This often leads to prices that may be higher than what would be achieved in a competitive environment. To establish a benchmark, one would need to analyze similar administrative support contracts awarded by the DoD or other agencies, looking at per-unit costs or total contract values for comparable service levels and durations, ideally from competitively awarded contracts.

What are the specific risks associated with awarding a contract of this magnitude ($12.9M) on a sole-source basis?

The primary risk associated with awarding a contract of this magnitude on a sole-source basis is the potential for inflated costs due to the lack of competition. Without competing bids, the government loses the opportunity to leverage market forces to secure the best possible price and value. This can lead to taxpayers overpaying for the services rendered. Additionally, sole-source awards can sometimes indicate a lack of market research or planning, or may be used when a specific vendor has unique capabilities, but the justification for this must be robust. There's also a risk of reduced innovation and service quality if the sole provider faces no pressure from competitors. Transparency is diminished, making it harder to justify the expenditure to the public.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of this contract, and how are they monitored?

The provided data does not specify the key performance indicators (KPIs) or metrics used to evaluate the success of this contract. For a firm-fixed-price contract, performance is typically measured against the defined scope of work and delivery schedule. However, for 'All Other Business Support Services,' specific qualitative and quantitative metrics are crucial for effective monitoring. These could include timeliness of service delivery, accuracy of data processing, responsiveness to requests, and overall client satisfaction. The Defense Logistics Agency, as the awarding agency, would be responsible for establishing and monitoring these KPIs. The absence of explicit KPIs in the summary data raises a concern about the rigor of performance oversight.

How does this contract align with the Department of Defense's broader objectives for administrative support and efficiency?

This contract aligns with the Department of Defense's (DoD) need for ongoing administrative support services to maintain operational efficiency. The award to Peckham Vocational Industries, Inc. for 'All Other Business Support Services' suggests the DoD requires assistance in functions that are not core military operations but are essential for day-to-day functioning. The firm-fixed-price nature indicates a desire for cost predictability in these support functions. However, the sole-source award raises questions about whether this specific contract represents the most efficient or cost-effective way to achieve these objectives compared to a competitively sourced solution. The DoD generally aims for efficiency and cost savings, and the procurement method here warrants scrutiny in that context.

What is the total historical spending by the Department of Defense on 'All Other Business Support Services' over the past five fiscal years?

To determine the total historical spending by the Department of Defense (DoD) on 'All Other Business Support Services' (NAICS code 561499) over the past five fiscal years, one would need to access and analyze comprehensive federal procurement data. This typically involves querying databases like the Federal Procurement Data System-Next Generation (FPDS-NG) or USAspending.gov. Such an analysis would aggregate all contracts awarded under this specific NAICS code by the DoD across all its components and agencies. Without direct access to this historical spending data, it is impossible to provide an accurate figure. This information is crucial for understanding the scale and trend of government expenditure in this service category.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SP451024R1003

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: $21,832,682

Exercised Options: $12,962,961

Current Obligation: $12,962,961

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline