Treasury's $36M warehousing contract with VSE Corp. awarded without competition, raising value questions

Contract Overview

Contract Amount: $36,158,329 ($36.2M)

Contractor: VSE Corporation

Awarding Agency: Department of the Treasury

Start Date: 2012-12-30

End Date: 2013-12-29

Contract Duration: 364 days

Daily Burn Rate: $99.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF GENERAL PROPERTY SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $36.2 million to VSE CORPORATION for work described as: IGF::CT::IGF GENERAL PROPERTY SERVICES Key points: 1. The contract's value of $36.16 million for general warehousing and storage services warrants scrutiny due to the lack of competitive bidding. 2. VSE Corporation, the sole awardee, has a significant contract history, but this specific award's pricing needs benchmarking against similar services. 3. The 'NOT COMPETED' status is a key risk indicator, suggesting potential for inflated costs and reduced market responsiveness. 4. Performance context is limited as this is a single contract award, making it difficult to assess VSE's broader performance in this specific service area. 5. This contract falls within the broader 'General Warehousing and Storage' sector, which typically involves managing inventory, distribution, and related logistics. 6. The absence of competition limits the ability to gauge the true market rate for these services, impacting overall value for money.

Value Assessment

Rating: questionable

Benchmarking the value of this $36.16 million contract is challenging without competitive data. The absence of a competitive process means there's no clear market price established for these general warehousing and storage services. Without comparison to similar contracts or market rates, it's difficult to definitively assess if the price paid represents good value for the taxpayer. The fixed-price nature of the contract provides some cost certainty, but the lack of competition prevents a robust assessment of cost-effectiveness.

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. The data indicates it was 'NOT COMPETED,' which typically occurs when only one source is capable of meeting the requirement, or for other specific justifications. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, potentially leading to higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing, as there is no competitive pressure to drive down costs. Taxpayers may end up paying more for services than they would in a competitive environment.

Public Impact

The primary beneficiaries of this contract are the Department of the Treasury, which receives essential warehousing and storage services. The services delivered include general warehousing and storage, crucial for managing government property and inventory. The geographic impact is centered in the District of Columbia, where the contract is managed and likely services are rendered. Workforce implications are primarily for VSE Corporation, which would utilize its employees to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing and reduced incentive for efficiency.
Sole-source awards can indicate potential market failures or insufficient planning.
Limited transparency in the procurement process due to non-competitive nature.
Difficulty in assessing true cost-effectiveness without market benchmarks.

Positive Signals

VSE Corporation is an established entity, potentially bringing experience to the contract.
Fixed-price contract provides cost certainty for the government.
Contract duration of one year offers flexibility for future procurement strategies.

Sector Analysis

This contract falls under the General Warehousing and Storage sector (NAICS code 493110), which encompasses establishments primarily engaged in operating merchandise warehouses for storage on a fee or contract basis. The market for warehousing services is substantial, driven by the need for inventory management, distribution, and logistics support across various industries, including government. Comparable spending benchmarks are difficult to establish without more specific service details and competitive data, but government agencies frequently contract for these types of services to manage physical assets.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to VSE Corporation, a larger entity, suggests that small businesses were either not involved in this specific procurement or did not meet the requirements. This contract does not appear to directly support the small business ecosystem through set-asides or mandated subcontracting.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) at the Department of the Treasury, responsible for monitoring performance and ensuring compliance with contract terms. Accountability measures are tied to the fixed-price nature of the contract, where VSE Corporation is obligated to deliver the specified services within the agreed-upon price. Transparency is limited due to the sole-source nature of the award; however, contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Federal Supply Schedule contracts for logistics and warehousing
Department of Defense (DoD) warehousing and storage contracts
Other agency-specific logistics and supply chain management contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $36.2 million to VSE CORPORATION. IGF::CT::IGF GENERAL PROPERTY SERVICES

Who is the contractor on this award?

The obligated recipient is VSE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Departmental Offices).

What is the total obligated amount?

The obligated amount is $36.2 million.

What is the period of performance?

Start: 2012-12-30. End: 2013-12-29.

What is VSE Corporation's track record with similar warehousing and storage contracts?

VSE Corporation has a broad history of government contracting, including services related to logistics, supply chain management, and technical support. While specific details on their performance in general warehousing and storage for the Department of the Treasury under this particular contract are not readily available from the provided data, their overall experience suggests a capacity to handle complex logistical requirements. Further investigation into past performance evaluations and contract awards for similar services would be necessary to provide a comprehensive assessment of their track record in this specific domain. Their broader portfolio indicates experience across various government agencies, suggesting a general familiarity with federal procurement and service delivery standards.

How does the pricing of this contract compare to market rates for similar warehousing services?

Direct comparison of this contract's pricing to market rates is challenging due to its sole-source nature. Without a competitive bidding process, there is no established market price derived from multiple offers. To assess value, one would need to benchmark the contract's total value ($36.16 million) against the scope of services provided (general warehousing and storage) and compare it to publicly available data for similar contracts awarded competitively by other agencies or in the private sector. Factors such as location (District of Columbia), duration (364 days), and specific service inclusions would need to be considered for a meaningful comparison. The lack of competition inherently limits the ability to confirm if the price achieved is optimal.

What are the primary risks associated with awarding a contract of this magnitude without competition?

The primary risks associated with awarding a $36.16 million contract without competition include the potential for paying above-market prices, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the procurement process. Without competitive pressure, VSE Corporation may not have been incentivized to offer the most cost-effective solution. Furthermore, the 'NOT COMPETED' status raises questions about the justification for foregoing competition, potentially indicating issues with market research, planning, or a lack of available qualified sources. This can lead to suboptimal resource allocation and a perception of unfairness in the contracting process, ultimately impacting taxpayer value.

What is the expected effectiveness of the services provided under this contract for the Department of the Treasury?

The expected effectiveness of the services hinges on VSE Corporation's ability to deliver reliable general warehousing and storage solutions as per the contract's terms. Given the contract's focus on managing physical assets, effectiveness would be measured by factors such as inventory accuracy, timely retrieval and storage of goods, proper maintenance of storage facilities, and adherence to security protocols. While the provided data doesn't detail performance metrics, the Department of the Treasury likely relies on these services for critical operational functions. The effectiveness is also influenced by the clarity of the contract's statement of work and the diligence of the government's oversight.

What are the historical spending patterns for general warehousing and storage services by the Department of the Treasury?

Historical spending patterns for general warehousing and storage services by the Department of the Treasury are not detailed in the provided data. However, agencies typically require such services to manage physical assets, equipment, and supplies. Spending in this category can fluctuate based on agency needs, asset management strategies, and the availability of government-owned facilities versus contracted services. To understand historical patterns, one would need to analyze procurement data over several fiscal years, looking at the volume, value, and types of warehousing contracts awarded by the Treasury. This specific $36.16 million contract represents a significant expenditure for a single year, suggesting a substantial requirement.

What specific justifications were provided for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' but it does not specify the exact justifications. Common reasons for sole-source awards include the existence of only one responsible source capable of providing the required services, urgent and compelling needs where competition is not feasible, or specific statutory authorities. Without access to the contract file or justification documents (e.g., a Justification and Approval - J&A), it is impossible to determine the precise rationale. Understanding these justifications is crucial for assessing the appropriateness of foregoing a competitive process and ensuring taxpayer funds are used efficiently.

Industry Classification

NAICS: Transportation and Warehousing › Warehousing and Storage › General Warehousing and Storage

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6348 WALKER LANE, ALEXANDRIA, VA, 08

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

Financial Breakdown

Contract Ceiling: $36,158,329

Exercised Options: $36,158,329

Current Obligation: $36,158,329

Contract Characteristics

Cost or Pricing Data: YES

Timeline