Army's $30.5M non-tactical vehicle contract awarded to Chugach World Services, Inc. raises value concerns

Contract Overview

Contract Amount: $30,462,741 ($30.5M)

Contractor: Chugach World Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-10-06

End Date: 2015-06-01

Contract Duration: 2,064 days

Daily Burn Rate: $14.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: ARMY OWNED NON TACTICAL VEHICLES

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35809

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $30.5 million to CHUGACH WORLD SERVICES, INC. for work described as: ARMY OWNED NON TACTICAL VEHICLES Key points: 1. The contract's value proposition is questionable given the extended duration and lack of competitive bidding. 2. Competition dynamics were limited, with the contract being awarded on a non-competitive basis. 3. Risk indicators include the sole-source award and the cost-plus-fixed-fee pricing structure, which can incentivize cost overruns. 4. Performance context is difficult to assess without clear metrics or comparison points. 5. The contract falls within facilities support services, a broad category that requires careful oversight. 6. The total award value of $30.5 million over its life cycle warrants scrutiny for efficiency.

Value Assessment

Rating: questionable

The total award of $30.5 million over approximately six years for facilities support services, specifically managing non-tactical vehicles, appears high without a clear competitive benchmark. The cost-plus-fixed-fee structure, while allowing for flexibility, can lead to higher overall costs compared to fixed-price contracts if not managed tightly. Benchmarking against similar contracts for vehicle fleet management or facilities support services would be necessary to definitively assess value for money, but the lack of competition suggests potential for inflated pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits the government's ability to leverage market forces to secure the best possible price and service. While sole-source awards are sometimes justified by unique circumstances or contractor capabilities, the lack of a competitive process here raises concerns about price discovery and potential inefficiencies.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the contractor did not need to outbid rivals to secure the award.

Public Impact

The primary beneficiaries are the Department of the Army, which receives support for its non-tactical vehicle fleet. Services delivered include the management and support of these vehicles, ensuring operational readiness. The geographic impact is primarily within Alabama, where the contract was administered. Workforce implications include potential employment opportunities for individuals supporting facilities and vehicle management services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contract type can lead to cost overruns if not closely monitored.
Lack of detailed performance metrics makes it difficult to assess contractor efficiency and effectiveness.
Extended contract duration without clear justification for sole-source award warrants further investigation.

Positive Signals

Contract provides essential support for the Army's non-tactical vehicle fleet, contributing to operational readiness.
Chugach World Services, Inc. has a track record of performing government contracts, suggesting some level of capability.
The contract is administered within Alabama, potentially supporting local employment.

Sector Analysis

This contract falls under the Facilities Support Services sector, which encompasses a wide range of services necessary for the operation and maintenance of government facilities and assets. The market for these services is substantial, with numerous providers capable of offering fleet management and logistical support. The Army's spending on non-tactical vehicles is a component of broader defense logistics and infrastructure management. Benchmarking would typically involve comparing costs for similar fleet management services across different military branches or federal agencies.

Small Business Impact

The provided data indicates that small business participation was not a primary consideration for this contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting requirements. This suggests that the prime contractor, Chugach World Services, Inc., likely did not have a significant obligation to engage small businesses for this particular award, potentially limiting opportunities within the small business ecosystem for this contract's scope.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) and the relevant Department of the Army contracting office. Accountability measures would be tied to the terms and conditions of the definitive contract, including performance standards and payment schedules. Transparency is limited due to the sole-source nature and the lack of readily available performance data in the public domain. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Department of Defense Vehicle Procurement
Facilities Maintenance and Support Services
Army Fleet Management Contracts
Non-Tactical Vehicle Operations

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Cost-plus-fixed-fee contract type may incentivize higher costs without strong oversight.
Lack of publicly available performance metrics hinders value assessment.
Extended contract duration without clear justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.5 million to CHUGACH WORLD SERVICES, INC.. ARMY OWNED NON TACTICAL VEHICLES

Who is the contractor on this award?

The obligated recipient is CHUGACH WORLD SERVICES, 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 $30.5 million.

What is the period of performance?

Start: 2009-10-06. End: 2015-06-01.

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

The provided data indicates the contract was awarded 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. However, the specific justification for this determination is not detailed in the provided data. Typically, sole-source awards are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without further documentation from the agency, the precise rationale remains unclear, raising questions about whether competition was adequately explored or if unique circumstances truly precluded it. This lack of transparency in the justification process is a common concern with sole-source contracts.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar services, and what are the implications for cost control?

The Cost-Plus-Fixed-Fee (CPFF) contract type is characterized by the government reimbursing the contractor for allowable costs incurred, plus a fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is uncertainty in performance costs. Compared to fixed-price contracts, CPFF generally offers less incentive for the contractor to control costs, as the government bears the majority of the cost risk. While it provides flexibility and can be suitable for complex services, it necessitates robust government oversight to manage costs effectively and prevent potential overruns. For fleet management services, fixed-price or cost-plus-incentive-fee contracts might offer better cost control mechanisms if the scope is well-defined.

What are the key performance indicators (KPIs) used to measure the success of this contract, and how has the contractor performed against them?

The provided data does not include specific Key Performance Indicators (KPIs) or performance evaluation reports for this contract. In the absence of this information, it is impossible to objectively assess how effectively Chugach World Services, Inc. has managed the Army's non-tactical vehicle fleet. Effective oversight would typically involve tracking metrics such as vehicle availability rates, maintenance turnaround times, cost per mile, fuel efficiency, and user satisfaction. Without these KPIs and associated performance data, the government's ability to ensure value for money and hold the contractor accountable is significantly diminished. This lack of transparency regarding performance metrics is a notable gap.

What is the historical spending trend for Army non-tactical vehicle management, and how does this contract's value compare?

The provided data only details this specific contract awarded in 2009 with an end date in 2015, totaling approximately $30.5 million. It does not offer a broader historical spending trend for Army non-tactical vehicle management. To establish a comparative context, one would need to analyze spending patterns over multiple years and across different contracts or task orders for similar services. Without this broader dataset, it's challenging to determine if this contract's value is representative, an outlier, or indicative of increasing costs in this service area. Further research into historical Army budgets and contract awards for fleet management would be required.

What is the potential impact of this contract's duration and value on future competition for similar services?

A long-duration contract (2009-2015) awarded on a sole-source basis can potentially stifle future competition. Incumbent contractors often have an advantage due to established relationships, institutional knowledge, and familiarity with the government's needs. If this contract was perceived as successful by the agency (even without public performance data), they might be inclined to extend or re-award it to the same contractor, potentially bypassing a full and open competition. This can create a barrier to entry for new or smaller businesses seeking to compete for similar services, limiting market dynamism and potentially leading to less competitive pricing in the long run.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9124P09R0022

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Alaska Corporation

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

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,462,741

Exercised Options: $30,462,741

Current Obligation: $30,462,741

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline