Justice Department awards $1.5M for boiler maintenance, raising questions on competition and value

Contract Overview

Contract Amount: $150,535 ($150.5K)

Contractor: Combustion Service & Equipment CO

Awarding Agency: Department of Justice

Start Date: 2022-04-28

End Date: 2027-05-25

Contract Duration: 1,853 days

Daily Burn Rate: $81/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: HOT WATER BOILER MAINTENANCE SERVICES AT THE CJIS DIVISION.

Place of Performance

Location: PITTSBURGH, ALLEGHENY County, PENNSYLVANIA, 15209

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Justice obligated $150,535.35 to COMBUSTION SERVICE & EQUIPMENT CO for work described as: HOT WATER BOILER MAINTENANCE SERVICES AT THE CJIS DIVISION. Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Firm Fixed Price contract type suggests cost certainty for the government. 3. Long duration of over 5 years may not reflect current market conditions. 4. Limited data on performance metrics makes assessing value difficult. 5. Contractor has a track record with federal agencies. 6. Geographic focus on Pennsylvania for essential facility services.

Value Assessment

Rating: fair

The contract value of $1.5 million over approximately five years for hot water boiler maintenance services appears reasonable for specialized facility upkeep. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or determine if the government secured the best possible value. The firm fixed-price structure provides cost predictability, but the lack of competition prevents a thorough value-for-money assessment compared to potentially lower bids from other qualified vendors.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed openly. This approach is typically used when only one vendor can provide the required services, often due to unique capabilities or existing infrastructure. The lack of multiple bidders means the government did not benefit from the price reductions and service enhancements that can arise from a competitive procurement process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competition, as the contractor was not incentivized by competing offers to lower their price or improve service offerings.

Public Impact

Ensures continuous operation of critical hot water systems at the FBI's CJIS Division. Maintains essential facility services for a key law enforcement data center. Supports operational readiness of the Criminal Justice Information Services. Impacts the physical infrastructure supporting federal law enforcement data.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Long contract duration could result in outdated service agreements or pricing.
Sole-source award limits opportunities for new or innovative service providers.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Contract addresses essential maintenance for critical infrastructure.
Contractor has prior experience in federal contracting.

Sector Analysis

The contract falls within the facilities maintenance and repair sector, specifically focusing on commercial and industrial HVAC equipment. This sector is crucial for ensuring the operational continuity of government facilities, especially those housing sensitive data or critical functions like the CJIS Division. While the dollar amount is modest, the nature of the service is vital. Comparable spending benchmarks for such specialized maintenance can vary widely based on facility size, equipment complexity, and geographic location.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature of the award, there is no indication of subcontracting opportunities for small businesses related to this specific procurement. The absence of a competitive process limits the potential for small businesses to participate or demonstrate their capabilities in providing these specialized maintenance services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Justice's internal procurement and financial management controls. The Federal Bureau of Investigation (FBI) would be responsible for monitoring contractor performance and ensuring compliance with contract terms. Transparency is limited due to the sole-source award, and specific Inspector General jurisdiction would depend on whether the contract falls under their audit purview.

Related Government Programs

Federal Bureau of Investigation Facility Maintenance
CJIS Division Operational Support
Department of Justice Facilities Management
Government HVAC Maintenance Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Long contract duration may not reflect current market value.
Limited transparency on performance metrics and value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $150,535.35 to COMBUSTION SERVICE & EQUIPMENT CO. HOT WATER BOILER MAINTENANCE SERVICES AT THE CJIS DIVISION.

Who is the contractor on this award?

The obligated recipient is COMBUSTION SERVICE & EQUIPMENT CO.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Bureau of Investigation).

What is the total obligated amount?

The obligated amount is $150,535.35.

What is the period of performance?

Start: 2022-04-28. End: 2027-05-25.

What is the track record of Combustion Service & Equipment Co. with federal contracts?

Combustion Service & Equipment Co. has a history of federal contracting, as indicated by the presence of a Unique Entity ID (UEI) and Cage Code, suggesting prior engagement with government agencies. While this specific contract is sole-source, the existence of past federal awards implies familiarity with government procurement processes and compliance requirements. Further analysis of their contract history, including performance reviews and past award values, would provide a more comprehensive understanding of their reliability and experience in serving federal clients. However, without access to a detailed contract database or performance reports, a definitive assessment of their track record remains limited to the fact that they have secured federal work.

How does the value of this contract compare to similar boiler maintenance services?

Benchmarking the value of this $1.5 million contract for hot water boiler maintenance is challenging due to its sole-source nature and the lack of detailed service scope. Typically, competitive procurements allow for direct comparison of bids, revealing market rates. For a five-year contract covering maintenance of critical infrastructure like that at the CJIS Division, the price might be considered fair if it includes comprehensive service, emergency response, and specialized expertise. However, without competitive bids, it's impossible to ascertain if this represents optimal value for taxpayers compared to what other qualified vendors might offer. The firm fixed-price structure does offer cost certainty, but the absence of competition prevents a definitive value comparison.

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

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, the government may not be achieving the best possible value for its investment. Another risk is vendor lock-in; if Combustion Service & Equipment Co. is the only provider capable of servicing the specific equipment, the FBI may be dependent on them for an extended period, potentially limiting flexibility in future service agreements. Furthermore, the long duration of the contract (over five years) increases the risk that market conditions or technological advancements could make the current agreement less cost-effective over time. Ensuring robust performance monitoring is crucial to mitigate these risks.

How effective is the firm fixed-price contract type in managing costs for this service?

The Firm Fixed Price (FFP) contract type is generally effective in managing costs for services where the scope of work is well-defined and risks are relatively low. For routine hot water boiler maintenance, an FFP contract provides the government with cost certainty, as the contractor assumes the risk of cost overruns. This means the total price paid will not exceed the agreed-upon amount, regardless of the contractor's actual costs. This structure incentivizes the contractor to perform efficiently to maximize profit. However, the effectiveness of FFP in this sole-source scenario is somewhat diminished, as the initial price negotiation lacks the competitive pressure that typically drives down costs further.

What is the historical spending pattern for boiler maintenance at the CJIS Division?

Historical spending data for boiler maintenance specifically at the CJIS Division is not readily available within the provided data. This contract, awarded in April 2022 with an end date in May 2027, represents a significant investment over its duration. To understand historical patterns, one would need to examine prior contracts for similar services at this facility, including their values, durations, and whether they were competitively awarded. Without this historical context, it is difficult to assess if the current $1.5 million award represents an increase, decrease, or stable level of spending for these essential maintenance services.

What are the implications of the contract's long duration for the government?

The contract's duration of approximately five years (1853 days) has several implications for the government. On the positive side, it provides stability and ensures continuous service for critical infrastructure, reducing the administrative burden of frequent re-procurement. It also allows the contractor to invest in specialized knowledge and resources for the specific equipment. However, a long duration also carries risks. Market prices for maintenance services can fluctuate, and the government might be locked into a price that becomes uncompetitive over time. Furthermore, technological advancements in boiler systems or maintenance techniques could occur, making the current service agreement potentially outdated or less efficient by the end of the contract term. Regular performance reviews and potential for contract modifications are crucial to mitigate these long-term risks.

Industry Classification

NAICS: Manufacturing › Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment Manufacturing › Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2016 BABCOCK BLVD, PITTSBURGH, PA, 15209

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $187,845

Exercised Options: $164,850

Current Obligation: $150,535

Actual Outlays: $108,861

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: SERVICES PURSUANT TO FAR 12.102(G)

Cost or Pricing Data: NO

Timeline