Treasury's $12.7M contract for document destruction services awarded to SourceAmerica, a non-profit

Contract Overview

Contract Amount: $12,766,348 ($12.8M)

Contractor: Sourceamerica

Awarding Agency: Department of the Treasury

Start Date: 2023-10-01

End Date: 2026-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $11.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SENSITIVE DOCUMENT DESTRUCTION (SDD) SERVICES

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $12.8 million to SOURCEAMERICA for work described as: SENSITIVE DOCUMENT DESTRUCTION (SDD) SERVICES Key points: 1. Contract awarded to a non-profit agency, potentially impacting traditional competitive dynamics. 2. Focus on sensitive document destruction highlights the critical nature of data security. 3. Long-term contract duration of three years suggests a need for sustained service. 4. Firm Fixed Price contract type provides cost certainty for the government. 5. Awarded to a single source, raising questions about competition and potential cost savings. 6. The contract's value is moderate within the context of government support services.

Value Assessment

Rating: fair

Benchmarking the value for sensitive document destruction services is challenging without specific service level agreements and volume data. However, the award to SourceAmerica, an AbilityOne participating nonprofit, suggests a mission-oriented procurement rather than a purely cost-driven one. While SourceAmerica aims to provide employment for individuals with disabilities, the absence of a competitive bidding process means direct price comparisons to market rates are not readily available. The firm fixed price structure offers predictability, but the ultimate value for money depends on the efficiency and effectiveness of the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, specifically to SourceAmerica, a nonprofit agency that fulfills the requirements of the Javits-Wagner-O'Day Act. This act mandates that federal agencies procure specified products and services from nonprofit agencies employing individuals with significant disabilities. Therefore, the procurement process bypasses traditional full and open competition to support a social mission.

Taxpayer Impact: Taxpayers benefit from supporting employment opportunities for individuals with disabilities. However, the lack of competition means there is no direct mechanism to ensure the lowest possible price is achieved through market forces.

Public Impact

Individuals with significant disabilities employed by SourceAmerica's associated agencies will benefit through job opportunities. The Internal Revenue Service (IRS) will receive secure and compliant destruction of sensitive documents, maintaining data integrity and privacy. The service is geographically focused on Maryland, where the contract is managed. The contract supports a workforce dedicated to specialized document management and destruction.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to higher costs than a fully competed contract.
Performance metrics and oversight are crucial to ensure service quality and value.
Dependence on a single provider could pose risks if service delivery falters.

Positive Signals

Supports the employment of individuals with disabilities, fulfilling a social and governmental objective.
Provides a necessary service for sensitive document handling, crucial for government operations.
Firm Fixed Price contract offers budget certainty for the IRS.

Sector Analysis

The federal government procures a wide range of support services, including document management and destruction. This contract falls under the 'All Other Support Services' category (NAICS 561990). The market for secure document destruction is significant, driven by regulatory compliance and data security needs across all sectors. By awarding this contract to SourceAmerica, the government is leveraging the Javits-Wagner-O'Day Act to achieve social objectives alongside service procurement, a common practice for certain service categories within the federal landscape.

Small Business Impact

This contract was awarded to SourceAmerica, a nonprofit agency, and does not appear to include a small business set-aside. However, SourceAmerica's model often involves subcontracting or utilizing the services of affiliated organizations, some of which may be small businesses. The primary impact on the small business ecosystem would be indirect, through potential partnerships or the overall support of the AbilityOne program, which aims to create employment opportunities.

Oversight & Accountability

Oversight for this contract will primarily reside with the contracting officers and program managers within the Department of the Treasury's Internal Revenue Service. As a sole-source award to a designated nonprofit, the oversight may also involve monitoring compliance with the Javits-Wagner-O'Day Act requirements. Transparency is facilitated through contract award databases, but detailed performance reviews and Inspector General involvement would depend on specific triggers or identified issues.

Related Government Programs

Javits-Wagner-O'Day Act Procurement
Federal Document Management Services
Nonprofit Contracting
Secure Destruction Services

Risk Flags

Sole-source award may limit price competition.
Performance monitoring is critical for service quality and security.
Dependence on a single provider for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $12.8 million to SOURCEAMERICA. SENSITIVE DOCUMENT DESTRUCTION (SDD) SERVICES

Who is the contractor on this award?

The obligated recipient is SOURCEAMERICA.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2023-10-01. End: 2026-09-30.

What is SourceAmerica's track record in providing sensitive document destruction services to federal agencies?

SourceAmerica, as a central nonprofit agency, facilitates the procurement of products and services for the federal government from affiliated nonprofit agencies that employ individuals with disabilities. While SourceAmerica itself doesn't directly perform the destruction, it manages the contracts. Its track record is tied to the performance of its network of associated nonprofit agencies. These agencies have a long history of providing various services, including document management and destruction, to government entities under the Javits-Wagner-O'Day (JWOD) Act. Specific performance data for this particular contract would be found in internal IRS performance reviews, but the JWOD program generally aims for reliable service delivery while fulfilling its social mission.

How does the pricing of this contract compare to similar services procured through competitive bidding?

Direct comparison of this contract's pricing to services procured through competitive bidding is difficult because this award was made on a sole-source basis to SourceAmerica under the Javits-Wagner-O'Day Act. The Act prioritizes employment for individuals with disabilities, which can influence pricing structures. Competitive procurements typically focus on achieving the lowest market price. While SourceAmerica aims for fair pricing, the absence of a competitive process means that market-driven price discovery was not a factor. Therefore, it's not possible to definitively state if this contract is more or less expensive than a competitively procured alternative without detailed benchmarking data on similar sole-source vs. competitive service contracts.

What are the primary risks associated with a sole-source award for sensitive document destruction?

The primary risks associated with a sole-source award for sensitive document destruction include potential lack of price competition, which could lead to higher costs than might be achieved in an open market. There's also a risk related to performance; without the pressure of competing for the contract, the contractor might be less incentivized to innovate or maintain the highest service levels, although this is mitigated by contract performance clauses. Furthermore, reliance on a single provider creates a vulnerability if the contractor experiences operational issues, financial instability, or fails to meet security and compliance standards, potentially disrupting the IRS's critical document management functions.

How effective is the Javits-Wagner-O'Day Act program in ensuring value for money for the government?

The Javits-Wagner-O'Day (JWOD) Act program aims to provide value for money by balancing cost considerations with significant social objectives – creating employment for individuals with severe disabilities. While it may not always yield the absolute lowest price achievable through open competition, it provides a consistent and reliable source for designated products and services. The value is also derived from the social return on investment, such as reduced reliance on social support programs for disabled individuals. Effectiveness in terms of pure cost-efficiency is debated, but the program is considered effective in meeting its dual mandate of procurement and social impact.

What is the historical spending trend for sensitive document destruction services by the IRS or similar agencies?

Historical spending data for sensitive document destruction services by the IRS or similar agencies can vary significantly based on the volume of sensitive materials generated, changes in regulatory requirements, and the procurement methods used. Agencies often consolidate these services over time. Prior to the current contract, the IRS likely utilized other contracts, potentially including those managed through SourceAmerica or other providers, possibly through competitive or sole-source means depending on the specific requirements and circumstances at the time. Analyzing historical spending would require examining past IRS solicitations and awards for document destruction and related services over several fiscal years.

Are there specific performance metrics or KPIs tied to this contract to ensure service quality?

While the provided data does not detail specific performance metrics or Key Performance Indicators (KPIs) for this contract, federal contracts, especially those involving sensitive data destruction, typically include such clauses. These metrics would likely focus on timeliness of service, compliance with destruction standards (e.g., NIST, HIPAA, depending on document type), security protocols during transport and destruction, and reporting accuracy. The IRS contracting officer is responsible for monitoring SourceAmerica's performance against these contractual requirements. Failure to meet these KPIs could result in penalties or corrective actions as stipulated in the contract.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Other Support Services › All Other Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 2091JB-23-R-00011

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8401 OLD COURTHOUSE RD, VIENNA, VA, 22182

Business Categories: AbilityOne Program Participant, Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,060,550

Exercised Options: $15,124,970

Current Obligation: $12,766,348

Actual Outlays: $9,947,872

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline