Facilities support services contract for $190M awarded to Chugach Industries, Inc. by the Department of the Army

Contract Overview

Contract Amount: $190,055,322 ($190.1M)

Contractor: Chugach Industries, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-10-01

End Date: 2017-07-31

Contract Duration: 2,130 days

Daily Burn Rate: $89.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BASE OPERATIONS AND MAINTAINENCE

Place of Performance

Location: PICATINNY ARSENAL, MORRIS County, NEW JERSEY, 07806

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $190.1 million to CHUGACH INDUSTRIES, INC. for work described as: BASE OPERATIONS AND MAINTAINENCE Key points: 1. Contract value represents a significant investment in base operations and maintenance. 2. Sole-source award raises questions about potential price overruns and lack of competitive pressure. 3. Long contract duration (2130 days) suggests a need for stable, long-term service provision. 4. The contract falls under Facilities Support Services, a broad category crucial for government operations. 5. Performance context is essential to evaluate if the fixed price was maintained effectively over the contract term. 6. The absence of small business set-aside indicates a focus on large-scale service providers.

Value Assessment

Rating: fair

Benchmarking the value of this $190M contract is challenging without specific performance metrics and a clear understanding of the scope of services. However, given the sole-source nature, there's a risk that the price may not reflect the most competitive market rates. Comparing it to similar large-scale facilities support contracts awarded competitively would provide a better indication of value for money. The firm-fixed-price structure offers some cost certainty, but the overall value hinges on the contractor's efficiency and the government's oversight.

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 services, often due to unique capabilities, existing infrastructure, or specific security requirements. The lack of competition means that price discovery through bidding was bypassed, potentially leading to higher costs for the government compared to a competitive procurement.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, there's less assurance that the price reflects the lowest possible cost for the services rendered.

Public Impact

The Department of the Army benefits from consistent and reliable base operations and maintenance services. Services delivered likely include a wide range of facility management functions, such as janitorial, groundskeeping, and minor repairs. Geographic impact is concentrated in New Jersey, where the contract was performed. Workforce implications include employment opportunities for individuals performing the facilities support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Long contract duration increases exposure to potential cost escalations or performance degradation over time.
Lack of small business participation may limit opportunities for smaller, specialized firms in the region.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government, assuming scope is well-defined.
Award to a single contractor can ensure continuity of essential services.
The contractor, Chugach Industries, Inc., has a track record of performing government contracts, suggesting some level of established capability.

Sector Analysis

This contract falls within the Facilities Support Services sector, a critical component of the broader facilities management industry. This sector encompasses a wide array of services aimed at maintaining and operating buildings and grounds. The market size for government facilities support is substantial, with agencies constantly seeking efficient ways to manage their physical infrastructure. This contract represents a significant portion of spending within this niche, highlighting the importance of reliable service providers for government operations.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no indication of small business subcontracting. This suggests that the primary contractor, Chugach Industries, Inc., is likely a large business capable of handling the full scope of services independently. The absence of a small business set-aside means that opportunities for smaller firms to participate in this specific contract were limited, potentially impacting the broader small business ecosystem that relies on government contracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Army. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver services at the agreed-upon price. Transparency is generally facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Base Operations Support Services
Facilities Maintenance Contracts
Government Property Management
Logistics and Support Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $190.1 million to CHUGACH INDUSTRIES, INC.. BASE OPERATIONS AND MAINTAINENCE

Who is the contractor on this award?

The obligated recipient is CHUGACH INDUSTRIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $190.1 million.

What is the period of performance?

Start: 2011-10-01. End: 2017-07-31.

What is the historical spending pattern for facilities support services by the Department of the Army in New Jersey?

Analyzing historical spending patterns for facilities support services by the Department of the Army in New Jersey requires access to detailed procurement data over multiple fiscal years. Generally, agencies like the Army allocate significant budgets to maintain their installations. Spending can fluctuate based on infrastructure needs, base realignments, and the specific services contracted. For instance, if there were major construction projects or base closures, spending on maintenance and operations might decrease or shift. Conversely, increased operational tempo or new facility requirements would likely drive up spending. Without specific historical data for this contract's predecessors or comparable contracts in the region, it's difficult to provide precise figures, but it's reasonable to assume consistent, substantial investment in maintaining operational readiness and infrastructure.

How does the per-unit cost of this contract compare to similar facilities support contracts?

A direct per-unit cost comparison for this $190M contract is challenging without a detailed breakdown of the services provided and their associated units (e.g., cost per square foot maintained, cost per service call). However, given that this was a sole-source award, it is plausible that the per-unit costs are higher than they might be in a competitively procured contract. Competitive bidding typically drives down prices as contractors vie for the award. To perform a robust comparison, one would need to identify similar contracts for facilities support services of comparable scope and scale, ideally awarded competitively, and then analyze their unit pricing. Benchmarking against industry standards for facilities management services in the New Jersey region would also provide valuable context.

What is Chugach Industries, Inc.'s track record with government contracts, particularly in facilities support?

Chugach Industries, Inc. has a significant history of performing government contracts, including those related to base operations and facilities support. As a company often involved in services for the Department of Defense and other federal agencies, they have experience in managing large-scale service contracts. Their track record can be assessed by reviewing past contract performance evaluations (e.g., CPARS reports), any past performance issues or disputes, and the types and values of contracts they have previously held. A positive track record suggests a demonstrated ability to meet contractual requirements, manage resources effectively, and deliver services satisfactorily. Conversely, any negative performance indicators would raise concerns about their capability to execute this specific contract successfully.

What are the primary risks associated with a sole-source contract of this magnitude?

The primary risks associated with a sole-source contract of this magnitude ($190M) include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a higher risk of vendor lock-in. Without competition, the government has less leverage to negotiate the best possible price. Furthermore, if the sole-source contractor experiences financial difficulties or performance issues, finding a replacement quickly can be extremely challenging, potentially disrupting essential services. There's also a risk that the government may not be aware of all available solutions or technologies if the market wasn't fully explored through a competitive process.

How effective are the oversight mechanisms for ensuring performance and value in this type of contract?

The effectiveness of oversight mechanisms for this contract depends heavily on the diligence of the contracting officer's representatives (CORs) and the contract administration team. For a firm-fixed-price contract, oversight focuses on verifying that the contractor is delivering the specified services according to the contract terms and schedule. This involves regular performance monitoring, site inspections, and review of deliverables. Value is assessed by ensuring the services meet the government's needs at the agreed-upon price. Robust oversight can mitigate risks associated with sole-source awards by closely monitoring performance and costs. However, if oversight is lax, the government may not receive the full value or quality of services expected, especially in a long-term, sole-source arrangement.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Alaska Corporation

Address: 3800 CENTERPOINT DR STE 601, ANCHORAGE, AK, 99503

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $339,290,640

Exercised Options: $339,290,640

Current Obligation: $190,055,322

Subaward Activity

Number of Subawards: 193

Total Subaward Amount: $21,260,521

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline