IRS Facilities Support Contract Awarded to MEC DISTRIBUTION LLC for Over $20 Million

Contract Overview

Contract Amount: $20,526,947 ($20.5M)

Contractor: MEC Distribution LLC

Awarding Agency: Department of the Treasury

Start Date: 2024-04-01

End Date: 2026-09-30

Contract Duration: 912 days

Daily Burn Rate: $22.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CONSOLIDATED SERVICES OPERATION AND MAINTENANCE AT INTERNAL REVENUE SERVICE (IRS) BROOKHAVEN

Place of Performance

Location: HOLTSVILLE, SUFFOLK County, NEW YORK, 11742

State: New York Government Spending

Plain-Language Summary

Department of the Treasury obligated $20.5 million to MEC DISTRIBUTION LLC for work described as: CONSOLIDATED SERVICES OPERATION AND MAINTENANCE AT INTERNAL REVENUE SERVICE (IRS) BROOKHAVEN Key points: 1. Contract value appears reasonable for facilities support services over a multi-year period. 2. Limited competition raises concerns about potential overpricing and reduced value for taxpayers. 3. The firm-fixed-price structure shifts performance risk to the contractor. 4. This contract supports essential operations at the IRS Brookhaven facility. 5. The services provided fall within the broader facilities support sector.

Value Assessment

Rating: fair

The contract value of approximately $20.5 million over roughly three years for facilities support services at a single IRS location appears within a reasonable range for such services. However, without specific details on the scope of work and comparable contract data for similar IRS facilities or other federal agencies, a precise value-for-money assessment is challenging. The lack of competition could potentially inflate costs compared to a more robustly competed contract.

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 approach limits the government's ability to solicit bids from multiple vendors, potentially missing out on more competitive pricing or innovative solutions. The justification for a sole-source award would typically involve unique capabilities or circumstances that preclude a competitive process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the price discovery mechanisms inherent in a competitive bidding process.

Public Impact

Benefits the Internal Revenue Service by ensuring the operational readiness of its Brookhaven facility. Delivers essential facilities support services, including maintenance and operational functions. Geographic impact is localized to the Brookhaven, New York area. Supports a workforce necessary for maintaining federal facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source award limits transparency and potential for cost savings.
Performance metrics and quality assurance details are not publicly available.

Positive Signals

Firm-fixed-price contract shifts performance risk to the contractor.
Contract duration provides stability for service delivery.
Supports critical government infrastructure.

Sector Analysis

Facilities Support Services (NAICS 561210) is a broad category encompassing a range of services necessary for the operation and maintenance of buildings and other facilities. This sector includes services like building operation and maintenance, janitorial services, and security systems operations. Federal spending in this area is substantial, supporting the vast real estate portfolio of government agencies. This contract fits within the government's need to maintain its operational infrastructure.

Small Business Impact

This contract was not awarded as a small business set-aside, nor is there an indication of significant subcontracting opportunities for small businesses. The award to MEC DISTRIBUTION LLC, without further information on the company's size, suggests it may not be a small business, or if it is, the contract was not specifically designated for small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Treasury and the Internal Revenue Service contracting officers. The firm-fixed-price nature of the contract implies that the contractor is responsible for managing costs to meet the agreed-upon price. Transparency would be enhanced by public reporting of performance reviews and any modifications to the contract.

Related Government Programs

Federal Facilities Maintenance Contracts
Government Building Operations Support
IRS Operational Support Services

Risk Flags

Sole-source award limits competition and potential for cost savings.
Lack of detailed service scope makes value assessment difficult.
Contractor's past performance is not publicly available.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $20.5 million to MEC DISTRIBUTION LLC. CONSOLIDATED SERVICES OPERATION AND MAINTENANCE AT INTERNAL REVENUE SERVICE (IRS) BROOKHAVEN

Who is the contractor on this award?

The obligated recipient is MEC DISTRIBUTION LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.5 million.

What is the period of performance?

Start: 2024-04-01. End: 2026-09-30.

What specific facilities support services are included in this contract?

The provided data does not detail the specific services covered under this contract, beyond the general classification of 'Facilities Support Services' (NAICS 561210). Typically, these services can encompass a wide range of activities such as routine maintenance, repairs, custodial services, groundskeeping, pest control, security system monitoring, and potentially minor renovations. A comprehensive understanding of the contract's value and performance would require a detailed statement of work (SOW) outlining the precise deliverables and service level agreements.

How does the contract value compare to similar facilities support contracts?

Benchmarking this $20.5 million contract against similar federal facilities support contracts is challenging without more specific data. The value is influenced by factors such as the size and complexity of the facility, the geographic location (which impacts labor and material costs), the duration of the contract, and the specific services required. Generally, multi-year contracts for large federal facilities can range from several million to tens of millions of dollars annually. The sole-source nature of this award makes direct comparison to competitively bid contracts difficult, as competitive processes often drive down prices.

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

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. Federal Acquisition Regulations (FAR) permit sole-source awards under specific circumstances, such as when only one responsible source can satisfy the agency's needs, or in cases of urgent and compelling need. Without the official justification document, the specific reasons for this sole-source determination remain unknown. This lack of competition is a key factor in assessing the overall value and risk associated with the contract.

What are the potential risks associated with a sole-source facilities support contract?

The primary risk of a sole-source contract is the potential for reduced value for taxpayers due to a lack of price competition. Without competing bids, the government may pay a higher price than if multiple vendors had vied for the contract. Other risks include limited innovation, as the contractor may have less incentive to propose cost-saving or efficiency-improving solutions, and potential complacency in service quality. Furthermore, the government has less leverage to negotiate favorable terms when there is no alternative provider.

What is the track record of MEC DISTRIBUTION LLC in performing federal contracts?

Information regarding the track record of MEC DISTRIBUTION LLC in performing federal contracts is not provided in the data. A thorough assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes with previous government awards. Without this information, it is difficult to gauge the contractor's reliability, efficiency, and ability to deliver the required facilities support services effectively.

What is the expected impact of this contract on the IRS Brookhaven facility's operations?

This contract is expected to ensure the continued smooth and efficient operation of the IRS Brookhaven facility by providing essential facilities support services. These services are critical for maintaining a safe, secure, and functional working environment for IRS personnel and for safeguarding government property. The reliable delivery of these services contributes directly to the IRS's ability to carry out its mission.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3949 HIGHWAY 8, NEW TOWN, ND, 58763

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, 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: $23,866,356

Exercised Options: $23,866,356

Current Obligation: $20,526,947

Actual Outlays: $14,140,282

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline