T&H Services awarded $230M for base operations, facing scrutiny over cost-plus contract type and limited competition
Contract Overview
Contract Amount: $230,118,987 ($230.1M)
Contractor: T&H Services, LLC
Awarding Agency: Department of Defense
Start Date: 2019-02-19
End Date: 2026-02-28
Contract Duration: 2,566 days
Daily Burn Rate: $89.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 6
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: BASE OPERATIONS SERVICES
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80913
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $230.1 million to T&H SERVICES, LLC for work described as: BASE OPERATIONS SERVICES Key points: 1. The contract's cost-plus fixed fee structure may incentivize higher spending without guaranteed cost savings. 2. Limited competition raises concerns about optimal pricing and potential for inflated costs. 3. The contract duration of over 7 years suggests a long-term commitment with potential for scope creep. 4. Performance context is crucial given the broad scope of 'Base Operations Services'. 5. Sector positioning within Facilities Support Services is standard for large-scale base support. 6. The exclusion of sources in the competition method warrants further investigation into its necessity and impact.
Value Assessment
Rating: questionable
The $230 million base operations services contract awarded to T&H SERVICES, LLC, utilizes a Cost Plus Fixed Fee (CPFF) pricing structure. CPFF contracts can be less cost-effective than fixed-price contracts as they reimburse the contractor for allowable costs plus a fixed fee, potentially leading to higher overall spending if costs are not tightly managed. Benchmarking this contract's value is challenging without detailed cost breakdowns and comparisons to similar base operations contracts. However, the CPFF structure itself is often viewed with caution from a value-for-money perspective, especially when compared to more performance-based or fixed-price arrangements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while a competitive process was intended, certain sources were excluded. The number of bidders is not explicitly stated in the provided data, but the 'exclusion of sources' suggests a potentially narrowed field. This limited competition could impact price discovery, as fewer bidders may lead to less aggressive pricing strategies and potentially higher costs for the government compared to a truly open and unrestricted competition.
Taxpayer Impact: The limited competition and exclusion of sources mean taxpayers may not be benefiting from the most competitive pricing achievable. This could result in a higher overall expenditure for the services provided.
Public Impact
Military personnel and their families stationed at the facility will benefit from uninterrupted base operations and support services. The contract ensures the delivery of essential services such as maintenance, logistics, and facility management, crucial for mission readiness. The geographic impact is localized to the specific military installation where T&H SERVICES, LLC is providing support. Workforce implications include the potential for job creation or retention for personnel involved in base operations, both directly by the contractor and indirectly through support functions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus fixed fee structure may lead to cost overruns.
- Limited competition raises concerns about price fairness.
- Exclusion of sources in competition method needs justification.
- Long contract duration increases risk of scope creep and cost escalation.
- Lack of detailed performance metrics in provided data hinders assessment.
Positive Signals
- Contract awarded to T&H SERVICES, LLC, indicating a selected vendor capable of performing the services.
- The contract is for essential base operations, suggesting a critical need and established requirement.
- The definitive contract award implies a structured procurement process was followed.
- The contract has a defined period of performance, allowing for future reassessment and potential re-competition.
Sector Analysis
This contract falls within the Facilities Support Services sector (NAICS 561210), a significant segment of the broader professional, scientific, and technical services industry. This sector encompasses a wide range of services essential for the operation and maintenance of government and commercial facilities. Spending in this area is often substantial, particularly for large government installations like military bases, where comprehensive support is required. Comparable spending benchmarks would typically involve analyzing other large-scale base operations and maintenance contracts awarded by the Department of Defense or other federal agencies.
Small Business Impact
The provided data indicates that small business participation (sb) is false, and the contract is not a small business set-aside (ss is false). This suggests that the primary award was not specifically targeted towards small businesses. There is no information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract award appears minimal, although T&H SERVICES, LLC may engage small businesses as subcontractors if not explicitly prohibited or mandated.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance standards, reporting requirements, and potential penalties for non-compliance. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. The Inspector General's office for the Department of Defense may conduct audits or investigations into specific aspects of the contract if concerns regarding fraud, waste, or abuse arise.
Related Government Programs
- Base Operations Support Services
- Facilities Maintenance and Management
- Logistics and Supply Chain Management
- Government Contracting
- Department of Defense Procurement
Risk Flags
- Cost-Plus Contract Type
- Limited Competition
- Exclusion of Sources
- Long Contract Duration
Tags
facilities-support-services, department-of-defense, department-of-the-army, definitive-contract, cost-plus-fixed-fee, limited-competition, base-operations, colorado, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $230.1 million to T&H SERVICES, LLC. BASE OPERATIONS SERVICES
Who is the contractor on this award?
The obligated recipient is T&H SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $230.1 million.
What is the period of performance?
Start: 2019-02-19. End: 2026-02-28.
What is the track record of T&H SERVICES, LLC in performing similar base operations contracts for the Department of Defense?
Assessing the track record of T&H SERVICES, LLC requires accessing historical contract data beyond the single award provided. A thorough analysis would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any prior disputes or claims, and the scale and complexity of previous contracts managed by the company. Without this additional data, it is difficult to definitively assess their capability and reliability for this $230 million base operations services contract. However, the award itself suggests they met the minimum requirements during the procurement process. Further investigation into their past performance on similar contracts would provide crucial context for evaluating the risk associated with this current award.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in terms of value for money for base operations services?
Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs plus a predetermined fixed fee, representing profit. While CPFF can be useful for complex projects with uncertain costs where defining a fixed price is difficult, it generally offers less value for money compared to fixed-price contracts. Fixed-price contracts incentivize contractors to control costs to maximize profit. In base operations, where many services are relatively predictable, fixed-price or performance-based contracts often yield better cost control and value for taxpayers. The CPFF structure here suggests a higher degree of uncertainty or complexity perceived by the agency, or potentially a less aggressive negotiation stance, which could lead to higher overall expenditures than a more cost-conscious contract type.
What are the specific risks associated with the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method for this contract?
The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method introduces specific risks. While it aims for competition, the exclusion of certain sources inherently limits the pool of potential bidders. This limitation can reduce the pressure on the remaining bidders to offer the most competitive pricing, potentially leading to higher costs for the government. Furthermore, the justification for excluding sources needs to be robust; if the exclusions were arbitrary or improperly justified, it could lead to protests and delays. The primary risk for taxpayers is paying a premium due to a less robust competitive environment. Transparency regarding *why* sources were excluded is crucial for assessing the fairness and effectiveness of the competition.
What are the potential implications of the contract's long duration (over 7 years) on cost and performance?
A contract duration of over 7 years (2566 days) for base operations services carries several implications. Long durations can provide stability and allow the contractor to achieve economies of scale, potentially leading to efficiencies. However, they also increase the risk of cost escalation over time, especially with a CPFF structure, as labor rates, material costs, and overhead can increase. There's also a risk of contractor complacency or 'scope creep,' where requirements may expand without commensurate adjustments in price or performance incentives. Furthermore, a long duration limits the government's ability to adapt to changing needs or incorporate new technologies and potentially reduces future competitive opportunities for other firms. Regular reviews and potential modifications are essential to manage these risks.
How does the $230 million total award value compare to historical spending on similar base operations contracts?
To compare the $230 million award value to historical spending, one would need to analyze similar base operations contracts awarded by the Department of Defense or other agencies over a relevant period. Key comparison points would include the scope of services, geographic location, contract duration, and contract type. For instance, comparing this to other large military base support contracts in similar regions or with comparable service requirements would provide context. Without access to a broader dataset of comparable contracts, it's difficult to definitively state whether $230 million represents high, low, or average spending. However, given the multi-year duration and comprehensive nature of 'base operations services,' this figure suggests a significant contract supporting a substantial military installation.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W911RZ15R0002
Offers Received: 6
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 9097 GLACIER HIGHWAY, JUNEAU, AK, 99801
Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Tax Exempt, Government, HUBZone Firm, Native American Tribal Government, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $248,831,989
Exercised Options: $237,640,210
Current Obligation: $230,118,987
Actual Outlays: $65,482,952
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-02-19
Current End Date: 2026-02-28
Potential End Date: 2026-05-31 00:00:00
Last Modified: 2025-12-11
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