DoD's $138M contract for wholesale merchant wholesalers awarded to FEDERAL RESOURCES SUPPLY COMPANY, LLC

Contract Overview

Contract Amount: $138,412,364 ($138.4M)

Contractor: Federal Resources Supply Company, LLC

Awarding Agency: Department of Defense

Start Date: 2020-04-27

End Date: 2020-07-31

Contract Duration: 95 days

Daily Burn Rate: $1.5M/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 4549797293!GOWNS

Place of Performance

Location: STEVENSVILLE, QUEEN ANNES County, MARYLAND, 21666

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $138.4 million to FEDERAL RESOURCES SUPPLY COMPANY, LLC for work described as: 4549797293!GOWNS Key points: 1. Value for money appears fair given the firm fixed price contract type. 2. Competition dynamics indicate a sole-source award, potentially limiting price discovery. 3. Risk indicators are moderate, with a short performance period and a single awardee. 4. Performance context shows a rapid delivery order against a larger IDIQ contract. 5. Sector positioning is within defense logistics and supply chain management.

Value Assessment

Rating: fair

The contract value of $138 million for wholesale merchant wholesaler services is substantial. Without direct comparable contracts for identical services and quantities, a precise value-for-money assessment is challenging. However, the firm fixed-price contract type provides cost certainty for the government. The pricing is assumed to be within a reasonable range given the sole-source nature, but further benchmarking against similar broad category awards would be beneficial.

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 is typically used when only one vendor can provide the required goods or services, or in urgent situations. The lack of competition means that the government did not benefit from the potential for lower prices or innovative solutions that a competitive bidding process might have yielded.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the best possible value.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential supplies and equipment. Services delivered include the provision of various equipment and supplies through wholesale merchant operations. The geographic impact is likely nationwide, supporting military operations and readiness. Workforce implications are indirect, supporting the logistics and supply chain sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source award.
Short performance period may indicate urgency or a stop-gap measure, requiring future competitive actions.
Contract awarded under a larger IDIQ, details of which are not provided here.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a single, established supplier can ensure timely delivery of critical supplies.
Supports the Defense Logistics Agency's mission to provide logistical support to the U.S. Armed Forces.

Sector Analysis

The defense logistics and wholesale merchant sector is critical for maintaining military readiness. This contract falls within the broader category of defense procurement, specifically focusing on the supply and distribution of equipment and services. The market size for defense logistics is significant, with numerous large and small businesses competing for contracts. This award represents a portion of the government's overall spending in this essential area, supporting the supply chain infrastructure necessary for national security.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a single, likely larger, entity may limit opportunities for small businesses to participate in this specific procurement. Further analysis of the underlying IDIQ contract would be needed to determine overall small business utilization goals and performance.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and financial accountability. The Defense Logistics Agency (DLA) Contracting Command would also have oversight responsibilities. Transparency is limited due to the sole-source nature of the award, with specific justifications for this approach needing further review.

Related Government Programs

Defense Logistics Agency (DLA) Contracts
Wholesale Trade Services
Military Equipment and Supplies Procurement
Federal Supply Schedule (FSS) Contracts

Risk Flags

Sole-source award may indicate lack of competition.
Potential for higher costs due to lack of competitive bidding.
Limited transparency regarding the justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $138.4 million to FEDERAL RESOURCES SUPPLY COMPANY, LLC. 4549797293!GOWNS

Who is the contractor on this award?

The obligated recipient is FEDERAL RESOURCES SUPPLY COMPANY, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $138.4 million.

What is the period of performance?

Start: 2020-04-27. End: 2020-07-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' and is a 'sole-source' type. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without access to the contract file or justification documentation, the precise reason for this sole-source award remains unknown. It is possible that FEDERAL RESOURCES SUPPLY COMPANY, LLC holds a unique capability, or that the requirement was time-sensitive and could not be fulfilled through a competitive process within the necessary timeframe. Further investigation into the contract's award documentation would be required to ascertain the specific justification.

How does the pricing of this contract compare to similar wholesale merchant wholesaler services procured by the government?

Benchmarking the pricing of this $138 million contract is challenging without access to detailed pricing breakdowns and comparable contract data. As a sole-source award, there was no competitive bidding process to establish a market-driven price. To assess value for money, one would need to compare the unit prices for specific items or categories of goods procured under this contract against prices paid by other government agencies for similar items, or against commercial market rates. The firm fixed-price (FFP) nature of the contract does provide cost certainty for the government, meaning the contractor bears the risk of cost overruns. However, the absence of competition means the government may not have achieved the lowest possible price.

What are the potential risks associated with a sole-source award of this magnitude?

A significant risk associated with a sole-source award of this magnitude ($138 million) is the potential for inflated pricing due to the lack of competitive pressure. Without multiple bidders vying for the contract, the awarded contractor may not have been incentivized to offer the most competitive rates. Another risk is reduced innovation; a competitive process often encourages vendors to propose novel solutions or efficiencies. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and negotiation power. Finally, if the justification for the sole-source award was not robust, it could indicate potential mismanagement or a failure to adequately explore competitive options.

What is the historical spending pattern for wholesale merchant wholesaler services by the Defense Logistics Agency?

Analyzing the historical spending patterns for wholesale merchant wholesaler services by the Defense Logistics Agency (DLA) requires access to historical contract databases and spending reports. The provided data point for this specific contract ($138 million) is a single delivery order under a larger IDIQ (Indefinite Delivery/Indefinite Quantity) contract, with a short performance period (April 27, 2020, to July 31, 2020). To understand historical patterns, one would need to examine DLA's spending over several fiscal years, identifying trends in contract awards for similar services, the number of competitors typically involved, average contract values, and the prevalence of sole-source versus competed awards. This would help contextualize the current award within DLA's broader procurement strategy for these types of services.

What is the track record of FEDERAL RESOURCES SUPPLY COMPANY, LLC in fulfilling government contracts, particularly for similar services?

FEDERAL RESOURCES SUPPLY COMPANY, LLC has a history of receiving government contracts, as indicated by its presence in federal procurement databases. To assess their track record specifically for wholesale merchant wholesaler services, a detailed review of their past performance on similar contracts would be necessary. This would involve examining contract award histories, including contract types, values, performance periods, and any reported issues such as contract modifications, disputes, or terminations. Information on past performance evaluations, if available through sources like the Contractor Performance Assessment Reporting System (CPARS), would provide crucial insights into their reliability, quality of service, and adherence to contract terms. Without this specific performance data, it's difficult to definitively assess their capabilities for this particular $138 million award.

Industry Classification

NAICS: Wholesale Trade › Machinery, Equipment, and Supplies Merchant Wholesalers › Service Establishment Equipment and Supplies Merchant Wholesalers

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: FRS Holdings, Inc.

Address: 235-G LOG CANOE CIR, STEVENSVILLE, MD, 21666

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $138,412,364

Exercised Options: $138,412,364

Current Obligation: $138,412,364

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE8EJ20D0013

IDV Type: IDC

Timeline