DoD awards $3.6M logistics support contract to S & K Federal Services, raising questions about competition

Contract Overview

Contract Amount: $3,596,154 ($3.6M)

Contractor: S & K Federal Services LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-22

End Date: 2025-09-21

Contract Duration: 364 days

Daily Burn Rate: $9.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK ORDER YEAR 2 ATC LOGISTICS SUPPORT SERVICES.

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $3.6 million to S & K FEDERAL SERVICES LLC for work described as: TASK ORDER YEAR 2 ATC LOGISTICS SUPPORT SERVICES. Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. Logistics support services are critical for military readiness, but the lack of competition warrants scrutiny. 3. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. 4. Performance period is one year, suggesting a need for ongoing, potentially recurring services. 5. The awardee, S & K Federal Services LLC, has secured this contract without a competitive bidding process. 6. The specific nature of 'ATC Logistics Support Services' requires further clarity to assess value.

Value Assessment

Rating: questionable

Benchmarking the value of this $3.6 million contract is challenging due to its non-competitive nature and the lack of detailed service descriptions. Without comparison to similar competitively awarded contracts for logistics support, it's difficult to definitively assess if the pricing is fair or if the government is receiving optimal value. The Cost Plus Fixed Fee structure, while sometimes necessary, carries inherent risks of cost escalation if not rigorously managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This means that only one vendor, S & K Federal Services LLC, was solicited. The lack of competition prevents market forces from driving down prices and limits the government's ability to explore alternative solutions or providers. This approach is typically justified by specific circumstances, such as urgent needs or unique capabilities, which are not detailed here.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive bidding. The government missed an opportunity to leverage competition to secure potentially lower prices and better terms.

Public Impact

The Department of the Army benefits from essential logistics support services, crucial for operational readiness. This contract ensures the continuity of critical logistical functions, likely impacting personnel and equipment movement. The services provided are expected to maintain the efficiency of Air Traffic Control (ATC) related logistics. The geographic impact is likely concentrated around the Army installations where these services are performed, with Maryland noted as the state. Workforce implications may include the direct employment of personnel by S & K Federal Services LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially leads to higher costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize increased spending if not closely monitored.
Lack of detailed service description makes it difficult to assess the true scope and necessity of the work.
Short performance period (1 year) suggests an ongoing need, but the lack of competition persists.
Potential for vendor lock-in due to sole-source award.

Positive Signals

Contract ensures critical logistics support for Department of Defense operations.
Awardee is a private entity, potentially bringing specialized expertise to logistics functions.
Contract is for a defined period, allowing for periodic re-evaluation of needs.
Services are essential for maintaining operational readiness and efficiency.

Sector Analysis

The logistics and supply chain management sector is a vital component of the defense industry, encompassing a wide range of services from transportation and warehousing to inventory management and distribution. Federal spending in this area is substantial, supporting military operations globally. This contract, focused on ATC logistics support, fits within the broader category of specialized support services that enable complex military functions. Comparable spending benchmarks are difficult to establish without more specific details on the services rendered, but the overall defense logistics market is valued in the billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to S & K Federal Services LLC, a single entity, does not explicitly detail subcontracting plans for small businesses. Without a competitive process or specific set-aside requirements, the direct impact on the small business ecosystem is unclear, and opportunities for small business participation may be limited unless S & K Federal Services LLC voluntarily engages them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing are crucial to ensure costs are reasonable and allocable to the contract. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Logistics Agency (DLA) Support Contracts
Military Sealift Command Contracts
Air Force Materiel Command Logistics Services
Army Sustainment Command Contracts
Transportation Command Contracts

Risk Flags

Non-competitive award
Cost-reimbursable contract type
Lack of detailed service description
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.6 million to S & K FEDERAL SERVICES LLC. TASK ORDER YEAR 2 ATC LOGISTICS SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is S & K FEDERAL 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 $3.6 million.

What is the period of performance?

Start: 2024-09-22. End: 2025-09-21.

What specific 'ATC Logistics Support Services' are being provided under this contract, and how do they differ from standard logistics support?

The provided data abbreviates the description as 'TASK ORDER YEAR 2 ATC LOGISTICS SUPPORT SERVICES.' 'ATC' typically refers to Air Traffic Control. Therefore, these services likely pertain to the specialized logistics required to support air traffic control operations within the Department of Defense. This could encompass the procurement, maintenance, storage, and delivery of equipment, parts, and supplies essential for radar systems, communication devices, navigation aids, and other critical ATC infrastructure. The 'Year 2' designation suggests this is a follow-on task order, implying a continuation of services previously performed. Without further detail, it's difficult to ascertain the exact scope, but it implies a specialized niche within broader military logistics.

What is the justification for awarding this contract on a sole-source basis, and were any attempts made to compete it?

The contract is explicitly marked as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. The specific justification for this determination is not provided in the data. Typically, sole-source awards are made under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. The absence of competition means that the government did not solicit bids from multiple vendors, potentially missing out on cost savings and broader market solutions. A thorough review of the Justification and Approval (J&A) document, if available, would be necessary to understand the rationale.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types for similar logistics services, and what are the associated risks?

Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs incurred plus a fixed fee representing profit. This type is often used when the scope of work is not precisely defined or involves research and development. For logistics support, other contract types like Firm-Fixed Price (FFP) or Cost Plus Incentive Fee (CPIF) might be more common if performance metrics can be clearly established. The primary risk with CPFF is that it can incentivize the contractor to incur higher costs, as the fixed fee remains constant regardless of the total cost. This necessitates robust government oversight to control costs and ensure the fixed fee remains fair compensation for the defined scope.

What is the historical spending pattern for ATC Logistics Support Services within the Department of the Army, and how does this award compare?

The provided data indicates this is 'TASK ORDER YEAR 2,' suggesting a prior award or contract existed for similar services. However, without access to historical contract databases or specific program spending reports, it is impossible to determine the full historical spending pattern for ATC Logistics Support Services within the Department of the Army. This $3.6 million award represents the spending for the current year's task order. To assess its comparability, one would need to examine the value and duration of previous task orders under any overarching contract, as well as any other contracts awarded for similar services over time. The non-competitive nature of this award also makes direct comparison to competitively bid historical contracts less meaningful.

What are the performance metrics and key performance indicators (KPIs) for this contract, and how is S & K Federal Services LLC's performance being measured?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) for this contract. For a Cost Plus Fixed Fee contract, especially one involving logistics support, performance is typically measured against defined service level agreements (SLAs) or specific objectives outlined in the contract's Statement of Work (SOW). These might include delivery timeliness, inventory accuracy, equipment uptime, or response times for logistical requests. Without access to the SOW or Performance Work Statement (PWS), it is impossible to detail how S & K Federal Services LLC's performance is being measured or what constitutes successful execution of their duties under this award.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W91CRB23R0018

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 63066 OLD HIGHWAY 93, SAINT IGNATIUS, MT, 59865

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, 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: $5,507,250

Exercised Options: $5,507,250

Current Obligation: $3,596,154

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W91CRB23D0026

IDV Type: IDC

Timeline