VA awards $2.07M for security systems, with 2 bidders competing under SAP

Contract Overview

Contract Amount: $2,073,767 ($2.1M)

Contractor: Johnson Controls, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-01

End Date: 2027-03-31

Contract Duration: 1,460 days

Daily Burn Rate: $1.4K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SERVICE BUILDING SECURITY SYSTEM

Place of Performance

Location: MILWAUKEE, MILWAUKEE County, WISCONSIN, 53295

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.1 million to JOHNSON CONTROLS, INC for work described as: SERVICE BUILDING SECURITY SYSTEM Key points: 1. The contract value of $2.07 million appears reasonable for a multi-year security system service contract. 2. Competition was limited to two bidders, suggesting potential for price optimization. 3. The contract is a firm-fixed-price purchase order, which shifts cost risk to the contractor. 4. The duration of 1460 days (4 years) provides long-term service stability. 5. The North American Industry Classification System (NAICS) code 561621 indicates a focus on security systems services. 6. The award was made by the Department of Veterans Affairs, indicating a focus on supporting veterans' facilities.

Value Assessment

Rating: good

The contract value of $2.07 million for a four-year security system service contract appears to be within a reasonable range for this type of specialized service. Benchmarking against similar contracts for security system installation and maintenance across federal agencies would provide a more precise value-for-money assessment. However, given the limited competition, it is important to ensure that the pricing reflects fair market value and is not inflated due to a lack of robust bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a limited number of bidders. With only two bidders participating, the level of competition is moderate. While SAP is designed for efficiency in acquiring goods and services below certain thresholds, a limited number of bidders can sometimes lead to less aggressive pricing compared to full and open competition. Further analysis would be needed to determine if the SAP threshold was appropriate for this service and if more vendors could have been solicited.

Taxpayer Impact: With only two bidders, taxpayers may not be receiving the most competitive pricing possible. A broader competition could have potentially driven down costs through increased vendor engagement and price negotiation.

Public Impact

The primary beneficiaries are the Department of Veterans Affairs facilities, which will receive enhanced security. The services delivered include the provision and maintenance of security systems. The geographic impact is concentrated within the facilities managed by the Department of Veterans Affairs, likely across Wisconsin given the 'WI' state code. The contract supports the security services workforce, potentially including technicians and installers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than could have been achieved through a broader solicitation.
The use of Simplified Acquisition Procedures (SAP) might not have attracted the widest range of potential vendors.
Lack of detailed performance metrics in the provided data makes it difficult to assess service quality outcomes.

Positive Signals

The contract is firm-fixed-price, providing cost certainty for the government.
The four-year duration offers stability and consistent security services for VA facilities.
The award to a known entity like Johnson Controls, Inc. suggests a potentially reliable service provider.

Sector Analysis

The security systems services sector is a critical component of facility management, encompassing alarm systems, surveillance, access control, and related maintenance. This contract falls within the broader information technology and security services market. The market size for federal security systems contracts is substantial, driven by the need to protect government assets and personnel. This specific contract for the Department of Veterans Affairs aligns with the government's ongoing investment in securing its infrastructure.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (sb: false). There is no information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this particular award is likely minimal, unless the prime contractor voluntarily engages small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services. Transparency is facilitated through contract databases like FPDS, where award details are recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Protective Service Contracts
Department of Defense Security System Contracts
General Services Administration (GSA) Schedule Contracts for Security Equipment

Risk Flags

Limited Competition
Potential for Price Optimization
Need for Performance Benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.1 million to JOHNSON CONTROLS, INC. SERVICE BUILDING SECURITY SYSTEM

Who is the contractor on this award?

The obligated recipient is JOHNSON CONTROLS, INC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $2.1 million.

What is the period of performance?

Start: 2023-04-01. End: 2027-03-31.

What is the track record of Johnson Controls, Inc. in performing similar federal contracts?

Johnson Controls, Inc. is a large, established company with a significant history of providing building automation, security, and HVAC systems across various sectors, including federal government contracts. While specific performance details for this particular contract are not available in the provided data, their extensive experience suggests a capacity to handle complex security system installations and maintenance. A deeper dive into their past performance ratings on similar federal awards, particularly those with the Department of Veterans Affairs or other agencies requiring comparable security solutions, would offer a more comprehensive understanding of their reliability and quality of service delivery.

How does the awarded price compare to market rates for similar security system services?

Without specific details on the scope of services, equipment provided, and the exact geographic location of the VA facilities, a precise market rate comparison is challenging. However, the total contract value of $2.07 million over four years averages to approximately $517,500 per year. This figure needs to be benchmarked against industry reports and pricing data for security system installation, monitoring, and maintenance services for facilities of comparable size and complexity. Given the limited competition (two bidders), it is crucial to ensure this annual average aligns with or is favorable compared to prevailing market rates to confirm value for money.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential underperformance by the contractor, leading to inadequate security, and the risk of cost overruns if the firm-fixed-price structure is not managed effectively by the contractor. Another risk is the limited competition, which could result in suboptimal pricing. Mitigation strategies include the firm-fixed-price nature of the contract, which incentivizes the contractor to manage costs. The Department of Veterans Affairs' oversight mechanisms, including performance monitoring and contract administration, are crucial for ensuring service delivery meets requirements. The limited competition risk is partially mitigated by the SAP process, which aims for efficiency, but a broader competition might have yielded better pricing.

How effective is the current security system in place at the VA facilities, and how will this contract enhance it?

The provided data does not contain information on the current effectiveness of the security systems at the VA facilities. This contract is for 'SERVICE BUILDING SECURITY SYSTEM,' implying it could be for new installations, upgrades, or ongoing maintenance and support of existing systems. The effectiveness enhancement will depend on the specific services procured. If it's for upgrades or new installations, it would likely involve modernizing technology, improving surveillance capabilities, or enhancing access control. If it's for maintenance, it ensures the existing systems remain operational and reliable, thereby maintaining the current level of security.

What is the historical spending pattern for security systems services by the Department of Veterans Affairs?

Historical spending patterns for security systems services by the Department of Veterans Affairs (VA) are not detailed in the provided data. However, federal agencies, particularly those managing large physical infrastructures like the VA, consistently allocate significant budgets towards security. This includes expenditures on physical security systems, electronic surveillance, access control, and related maintenance. The VA's mission to serve veterans necessitates secure facilities, making security a recurring and substantial budget item. Analyzing past VA contract awards for similar services over several fiscal years would reveal trends in spending, average contract values, and the types of security solutions prioritized.

What is the significance of the NAICS code 561621 in understanding the scope of this contract?

The North American Industry Classification System (NAICS) code 561621, 'Security Systems Services (except Locksmiths),' is highly significant as it precisely defines the nature of the services being procured. This code indicates that the contract covers the installation, maintenance, monitoring, and repair of electronic security systems, such as alarm systems, video surveillance, access control systems, and related equipment. It excludes services typically provided by locksmiths. Understanding this code helps in identifying comparable contracts, assessing the specialized nature of the work, and evaluating the contractor's expertise within this specific segment of the security industry.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Systems Services (except Locksmiths)

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C25223Q0283

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Johnson Controls Fire Protection LP

Address: 507 E MICHIGAN ST M-93, MILWAUKEE, WI, 53202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $2,643,083

Exercised Options: $2,073,767

Current Obligation: $2,073,767

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline