DoD's $105M Warehousing Contract to LB & B Associates Inc. Faces Scrutiny for Value and Competition

Contract Overview

Contract Amount: $105,165,179 ($105.2M)

Contractor: LB & B Associates Inc

Awarding Agency: Department of Defense

Start Date: 2015-10-01

End Date: 2025-10-01

Contract Duration: 3,653 days

Daily Burn Rate: $28.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF!8502082603!CONUS GOCO STORA

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $105.2 million to LB & B ASSOCIATES INC for work described as: IGF::OT::IGF!8502082603!CONUS GOCO STORA Key points: 1. The contract's long duration and firm fixed-price nature may limit flexibility and potentially inflate costs over time. 2. Limited public data on performance metrics makes it difficult to assess the contractor's value-for-money proposition. 3. The high number of bids suggests a competitive market, but the final price relative to services rendered requires deeper analysis. 4. This contract represents a significant portion of the Defense Logistics Agency's spending in the warehousing sector. 5. The contractor's track record and past performance are critical indicators for evaluating future success. 6. Potential risks include contractor performance issues, cost overruns, and the need for contract modifications.

Value Assessment

Rating: fair

Benchmarking the value of this $105 million contract is challenging without detailed performance data and comparable contract specifics. The firm fixed-price structure, while offering cost certainty, can sometimes lead to less competitive pricing if not carefully managed. Comparing the per-unit cost of warehousing services to industry averages or similar government contracts would be necessary to definitively assess value for money. The long duration of the contract (10 years) also raises questions about whether the pricing remains competitive throughout its lifecycle.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with six bidders participating. This indicates a healthy level of interest and suggests that the market for these services is competitive. The presence of multiple bidders generally supports price discovery and can lead to more favorable terms for the government. However, the specific pricing outcomes relative to the number of bidders and the scope of work would require further analysis to confirm optimal price realization.

Taxpayer Impact: A competitive bidding process for this substantial contract is beneficial for taxpayers, as it encourages multiple companies to offer their best pricing and service levels, potentially leading to cost savings compared to a sole-source award.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, ensuring the availability of essential warehousing and storage services. Services delivered include the storage, management, and distribution of military supplies and equipment. The geographic impact is primarily within CONUS (Continental United States), supporting domestic logistics operations. Workforce implications may include direct and indirect employment opportunities within the contractor's organization and related support industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep over the 10-year contract duration if market rates increase significantly.
Risk of contractor performance degradation due to the long contract term without sufficient performance incentives.
Dependence on a single contractor for critical warehousing functions could pose a supply chain risk if issues arise.

Positive Signals

Awarded under full and open competition, indicating a robust market response.
Firm fixed-price contract provides cost certainty for the government.
Long-term contract allows for stable planning and resource allocation for essential services.

Sector Analysis

The warehousing and storage sector is a critical component of the logistics and supply chain industry, supporting various government agencies. This contract falls under NAICS code 493190 (Other Warehousing and Storage). The market for government warehousing services is substantial, with significant spending allocated annually to ensure the readiness and operational capability of military forces. Comparable spending benchmarks would involve analyzing other large-scale warehousing contracts awarded by the DoD or other federal agencies for similar services.

Small Business Impact

This contract does not appear to have a small business set-aside component (ss: false, sb: false). While the prime contractor is LB & B ASSOCIATES INC, the lack of specific small business subcontracting goals or reporting requirements in the provided data makes it difficult to assess the direct impact on the small business ecosystem. Future analysis could explore subcontracting plans to understand if small businesses are involved in supporting this large contract.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Logistics Agency (DLA) through contract officers and quality assurance representatives. The firm fixed-price nature of the contract shifts some risk to the contractor, but performance monitoring remains crucial. Transparency is facilitated by contract award databases, but detailed performance reports and Inspector General oversight would provide a more comprehensive view of accountability.

Related Government Programs

Defense Logistics Agency Warehousing Services
CONUS GOCO Storage Contracts
Military Supply Chain Management
Department of Defense Logistics Support

Risk Flags

Long contract duration may lead to outdated services or pricing.
Lack of specific performance metrics hinders value assessment.
Potential for cost increases over the contract's lifecycle.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.2 million to LB & B ASSOCIATES INC. IGF::OT::IGF!8502082603!CONUS GOCO STORA

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 $105.2 million.

What is the period of performance?

Start: 2015-10-01. End: 2025-10-01.

What is the historical spending pattern for warehousing and storage services by the Defense Logistics Agency?

The Defense Logistics Agency (DLA) consistently allocates significant funds towards warehousing and storage services to support military operations. Historical data indicates a steady demand for these services, with annual spending fluctuating based on operational tempo, inventory levels, and strategic priorities. For instance, in fiscal years preceding this contract, DLA's spending in this category has often been in the hundreds of millions of dollars, reflecting the vast scale of military logistics. This $105 million contract, spanning ten years, represents a substantial, long-term commitment to a specific provider within this broader spending landscape. Analyzing year-over-year trends, major contract awards, and shifts in service requirements would provide a more granular understanding of DLA's historical investment in warehousing.

How does the pricing of this contract compare to similar warehousing contracts awarded by the government?

A direct comparison of pricing for this $105 million contract to similar government warehousing contracts is challenging without access to detailed pricing structures and service level agreements for comparable awards. However, the firm fixed-price (FFP) nature of this contract suggests a degree of cost certainty for the government. If the contract involves standard warehousing services (storage, handling, distribution), benchmarks could be established based on per-square-foot storage rates, per-line-item handling fees, or other unit costs. The fact that it was awarded under full and open competition with six bidders implies that the pricing achieved was likely competitive at the time of award. Further analysis would require obtaining data on the specific services rendered and comparing the effective unit costs against industry standards and other government FFP warehousing contracts.

What are the key performance indicators (KPIs) used to evaluate LB & B ASSOCIATES INC's performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) used to evaluate LB & B ASSOCIATES INC's performance. Typically, for warehousing and storage contracts, KPIs might include metrics such as on-time delivery rates, inventory accuracy, order fulfillment accuracy, facility maintenance standards, safety incident rates, and response times to government requests. The effectiveness of the firm fixed-price contract relies heavily on the government's ability to monitor and enforce these performance standards. Without explicit details on the contract's performance work statement (PWS) and associated KPIs, a thorough assessment of the contractor's value delivery is limited. The Defense Contract Management Agency (DCMA) or the contracting officer's representative (COR) would be responsible for overseeing performance against these undefined metrics.

What is the track record of LB & B ASSOCIATES INC with government contracts, particularly in warehousing?

LB & B ASSOCIATES INC has a history of performing government contracts, including those related to logistics and warehousing. While specific details on all past contracts are not provided here, their ability to secure a 10-year, $105 million contract with the Defense Logistics Agency suggests a demonstrated capacity and a satisfactory performance record with the government. Companies in this sector often build their reputation through successful execution of previous contracts, adherence to schedules, quality of service, and compliance with regulations. A deeper dive into their contract history, including contract values, durations, agencies served, and any reported performance issues or awards, would provide a more comprehensive understanding of their track record in fulfilling complex logistical requirements.

What are the potential risks associated with a 10-year contract duration for warehousing services?

A 10-year contract duration for warehousing services presents several potential risks. Firstly, market conditions, technology, and operational requirements can change significantly over a decade, potentially making the contracted services or pricing obsolete or inefficient. This could lead to the government paying above-market rates or receiving suboptimal service if the contract is not structured with flexibility or regular price reviews. Secondly, long-term contracts can sometimes reduce the incentive for the contractor to innovate or maintain peak performance, especially if competition is limited after the initial award. Thirdly, there's a risk of contractor dependency; if LB & B ASSOCIATES INC were to face significant performance issues or financial instability, replacing them mid-contract could be disruptive and costly. Finally, the government's needs might evolve, requiring modifications or extensions that could deviate from the original scope and budget.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › Other Warehousing and Storage

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: SPE60014R0510

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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: $105,165,179

Exercised Options: $105,165,179

Current Obligation: $105,165,179

Actual Outlays: $36,433,445

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline