State Department awards $3.17M janitorial contract to Pellegrini S.P.A. under full and open competition

Contract Overview

Contract Amount: $3,171,478 ($3.2M)

Contractor: Pellegrini S.P.A.

Awarding Agency: Department of State

Start Date: 2021-01-15

End Date: 2026-04-30

Contract Duration: 1,931 days

Daily Burn Rate: $1.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: JANITORIAL SERVICES

Plain-Language Summary

Department of State obligated $3.2 million to PELLEGRINI S.P.A. for work described as: JANITORIAL SERVICES Key points: 1. Contract value appears reasonable for the duration and scope of janitorial services. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The firm-fixed-price contract type shifts cost risk to the contractor. 4. Contract duration of over 5 years provides stability for service delivery. 5. No small business set-aside was applied, indicating a focus on best value. 6. The North American Industry Classification System (NAICS) code 561720 confirms the service category.

Value Assessment

Rating: good

The contract value of approximately $3.17 million over 1931 days (roughly 5.3 years) averages to about $1.64 million per year for janitorial services. This appears to be within a reasonable range for large-scale government facilities, though specific benchmarks for the geographic location and exact scope of services would provide a more precise comparison. The firm-fixed-price structure is standard for services where the scope is well-defined, allowing the government to budget effectively.

Cost Per Unit: $1,642,000 per year (estimated average)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit a bid. This typically involves a robust solicitation process designed to encourage a wide range of participants. The presence of 8 bids suggests a healthy level of interest and competition for this service contract.

Taxpayer Impact: A competitive bidding process generally leads to better pricing for taxpayers by driving down costs through market forces.

Public Impact

The primary beneficiaries are the employees and visitors of the Department of State facilities requiring janitorial services. The contract ensures the cleanliness and maintenance of government buildings, contributing to a safe and healthy work environment. Geographic impact is likely concentrated around the specific facilities managed by the Department of State. The contract supports jobs within the janitorial services industry, potentially including local employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor to underperform on service quality to maximize profit under fixed-price terms.
Reliance on a single contractor for an extended period could lead to complacency.
Limited visibility into the specific labor costs and profit margins of the contractor.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Full and open competition suggests a competitive market was leveraged.
Contract duration provides service continuity and reduces re-competition administrative burden.

Sector Analysis

Janitorial services fall under the broader facilities support services sector. This sector is characterized by a large number of small and medium-sized businesses, as well as larger, diversified service providers. Government contracts represent a significant portion of the market due to the extensive real estate holdings of federal agencies. Benchmarking against similar government janitorial contracts would reveal if the $1.64 million annual average is competitive.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the competition was open to all types of firms, and the award was likely based on the best overall proposal rather than a specific small business focus. The absence of set-asides means that opportunities for small businesses to participate in this specific contract may be limited unless they are prime contractors or choose to subcontract with the awardee.

Oversight & Accountability

The firm-fixed-price contract type provides a degree of oversight through performance standards and deliverables. The Department of State's contracting officers and potentially an Inspector General's office would be responsible for monitoring contractor performance and ensuring compliance with the contract terms. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics may not always be publicly disclosed.

Related Government Programs

Federal Building Maintenance Contracts
Government Facility Cleaning Services
Department of State Operations Support

Risk Flags

Long contract duration may reduce flexibility
Fixed-price contract requires diligent performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $3.2 million to PELLEGRINI S.P.A.. JANITORIAL SERVICES

Who is the contractor on this award?

The obligated recipient is PELLEGRINI S.P.A..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $3.2 million.

What is the period of performance?

Start: 2021-01-15. End: 2026-04-30.

What is the track record of Pellegrini S.P.A. with federal contracts, particularly for janitorial services?

Information regarding Pellegrini S.P.A.'s specific track record with federal contracts, especially for janitorial services, is not detailed in the provided data. A comprehensive analysis would require accessing federal procurement databases (like SAM.gov or FPDS) to review past performance ratings, previous contract awards, and any history of disputes or terminations. Understanding their experience with similar-sized contracts and government clients would be crucial for assessing their capability and reliability in fulfilling this Department of State requirement.

How does the annual cost of this contract compare to similar janitorial contracts awarded by the Department of State or other federal agencies?

The estimated annual cost of approximately $1.64 million for this contract needs to be benchmarked against comparable federal janitorial service contracts. Factors such as the square footage of facilities serviced, the level of service required (e.g., frequency of cleaning, specialized services), and the geographic location significantly influence pricing. Without access to a database of similar contracts, it's difficult to definitively state if this price is high or low. However, the presence of 8 bids suggests market interest, which could indicate competitive pricing.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this janitorial services contract. Typically, such contracts would include detailed requirements regarding cleaning frequencies, quality standards, response times for issues, and employee conduct. Performance would likely be monitored through regular inspections and user feedback. The firm-fixed-price nature implies that meeting these defined standards is crucial for the contractor to receive full payment.

What is the historical spending pattern for janitorial services by the Department of State over the last five years?

Historical spending data for janitorial services by the Department of State is not included in the provided information. To analyze this, one would need to query federal procurement databases for all janitorial service contracts awarded by the agency over the past five years. This would reveal trends in spending, average contract values, and the number of contractors utilized. Such an analysis could help determine if this $3.17 million contract represents an increase, decrease, or stable level of investment in these services.

What is the potential risk associated with the long contract duration (over 5 years)?

A contract duration of over five years, while providing service continuity, carries potential risks. One risk is that the contractor may become complacent over time, potentially leading to a decline in service quality if performance monitoring is not rigorous. Another risk is that market prices for janitorial services could decrease significantly during the contract period, making the current fixed price less competitive. Furthermore, unforeseen changes in government facility needs or budget constraints could arise, making the long-term commitment less flexible.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Services to Buildings and Dwellings › Janitorial Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 191T7021Q0001

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: VIA LORENTEGGIO 255, MILANO

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $6,982,668

Exercised Options: $3,171,478

Current Obligation: $3,171,478

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline