VA awards $133M for Logistics Consulting, highlighting potential overspending concerns

Contract Overview

Contract Amount: $133,119,585 ($133.1M)

Contractor: Shipcom Wireless Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2013-09-23

End Date: 2018-10-18

Contract Duration: 1,851 days

Daily Burn Rate: $71.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: POINT OF USE SYTEM IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20420

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $133.1 million to SHIPCOM WIRELESS INC for work described as: POINT OF USE SYTEM IGF::OT::IGF Key points: 1. Significant contract value of $133M for logistics consulting services. 2. SHIPCOM WIRELESS INC secured the contract, raising questions about market competition. 3. The contract duration of 1851 days suggests a long-term need, but efficiency is key. 4. Potential for overspending exists given the high value and fixed-price structure.

Value Assessment

Rating: questionable

The contract's total value of $133M is substantial for logistics consulting. Without specific per-unit cost data or benchmarks for similar services, it's difficult to definitively assess pricing efficiency against market rates. The fixed-price nature could lead to contractor profit if costs are managed effectively, or risk for the contractor if costs escalate.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically allows for the best price discovery. However, the significant value and single award to SHIPCOM WIRELESS INC warrant scrutiny to ensure the competitive process yielded optimal value and that no single bidder dominated unfairly.

Taxpayer Impact: The $133M awarded represents a considerable taxpayer investment. Ensuring this spending was efficient and delivered necessary services effectively is crucial for responsible fiscal management.

Public Impact

Veterans' access to essential services could be indirectly impacted by the efficiency of logistics operations. Taxpayer funds are allocated to support the Department of Veterans Affairs' operational needs. The long contract duration suggests a sustained need for these services, impacting long-term budget planning.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value
Long contract duration
Limited visibility on per-unit cost efficiency

Positive Signals

Awarded under full and open competition
Firm fixed-price contract structure

Sector Analysis

Logistics consulting services fall under professional services, often supporting critical government functions like supply chain management and distribution. Benchmarks for this sector vary widely based on scope, but $133M over nearly five years is a significant investment, demanding rigorous performance monitoring.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. This contract, awarded under full and open competition, may not have prioritized small business participation, potentially limiting opportunities for smaller firms in this significant contract.

Oversight & Accountability

The Department of the VA is responsible for overseeing this contract. Robust oversight mechanisms are essential to ensure SHIPCOM WIRELESS INC meets performance expectations, manages costs effectively, and delivers the intended value throughout the contract's lifecycle.

Related Government Programs

Process, Physical Distribution, and Logistics Consulting Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High total contract value
Long contract duration (1851 days)
Lack of specific per-unit cost data for benchmarking
Potential for contractor profit maximization under fixed-price
Limited information on specific performance outcomes

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $133.1 million to SHIPCOM WIRELESS INC. POINT OF USE SYTEM IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is SHIPCOM WIRELESS INC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $133.1 million.

What is the period of performance?

Start: 2013-09-23. End: 2018-10-18.

What specific logistics improvements or efficiencies were achieved through this $133M contract, and how do they compare to the initial objectives?

The contract aimed to enhance the VA's logistics operations. Quantifiable improvements in areas like supply chain optimization, inventory management, and distribution efficiency should be documented. Comparing these outcomes against the contract's initial objectives and performance metrics is crucial to determine if the $133M investment yielded tangible benefits and met the VA's strategic goals for its logistics infrastructure.

Given the $133M value and fixed-price structure, what mechanisms were in place to mitigate the risk of contractor overcharging or inefficient service delivery?

While a fixed-price contract shifts some risk to the contractor, the VA should have implemented strong performance monitoring and quality assurance processes. This includes regular reviews of deliverables, key performance indicator tracking, and potentially milestone-based payments tied to verifiable achievements. Effective oversight is critical to ensure the contractor remains incentivized to deliver high-quality services efficiently and avoid cost overruns that could impact taxpayer value.

How effectively did the full and open competition process ensure the best possible value for the VA in awarding this $133M contract?

Full and open competition is designed to foster a competitive environment that drives down prices and improves service quality. For this $133M contract, the VA's evaluation process should have rigorously assessed not only price but also technical capabilities, past performance, and overall value proposition of all bidders. Analyzing the number of bids received and the spread of pricing would indicate the effectiveness of the competition in securing optimal taxpayer value.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA777-13-R-0133

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11200 RICHMOND AVE STE 552, HOUSTON, TX, 77082

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $243,119,585

Exercised Options: $133,119,585

Current Obligation: $133,119,585

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline