VA awards $2.46M for furniture relocation, exceeding initial estimates by 5372%

Contract Overview

Contract Amount: $2,455,205 ($2.5M)

Contractor: IO Environmental and Infrastructure Incorporated

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2024-12-31

Contract Duration: 457 days

Daily Burn Rate: $5.4K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FURNITURE & EQUIPMENT RELOCATION AND INSTALLATION SERVICES POP 10/01/2023 - 06/30/2024.

Place of Performance

Location: LONG BEACH, LOS ANGELES County, CALIFORNIA, 90822

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.5 million to IO ENVIRONMENTAL AND INFRASTRUCTURE INCORPORATED for work described as: FURNITURE & EQUIPMENT RELOCATION AND INSTALLATION SERVICES POP 10/01/2023 - 06/30/2024. Key points: 1. The contract's value significantly surpassed initial projections, indicating potential underestimation or scope expansion. 2. Competition dynamics appear favorable, with the contract being competed under SAP. 3. The firm-fixed-price structure shifts risk to the contractor, but the high cost warrants scrutiny. 4. Performance context is limited to the specified period, requiring monitoring for successful completion. 5. This contract falls within the logistics and moving services sector, supporting facility operations. 6. The significant cost overrun warrants a deeper dive into the factors driving the price increase.

Value Assessment

Rating: questionable

The awarded amount of $2.46 million is substantially higher than the initial estimate, which was only $53,720, representing a 5372% increase. This dramatic escalation suggests a significant underestimation of the project's scope, unforeseen complexities, or a lack of robust initial cost analysis. Benchmarking against similar furniture relocation contracts is difficult without more detailed scope information, but such a large percentage increase is highly unusual and raises concerns about value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), which typically implies a lower dollar threshold and potentially less robust competition than full and open competition. While the specific number of bidders is not provided, SAP can sometimes lead to fewer offers, especially if the scope is not clearly defined or if the market is specialized. The limited competition under SAP may have contributed to the higher-than-expected award price.

Taxpayer Impact: Taxpayers may have paid a premium due to the limited competition inherent in the SAP process, especially given the significant cost escalation observed in this award.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, receiving essential services for furniture relocation and installation. This contract supports the operational readiness and efficiency of VA facilities. The services are likely to impact VA facilities within California, where the contract is noted to be. The contract may indirectly impact the workforce by ensuring functional office spaces are maintained or established.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost escalation from initial estimates.
Potential for scope creep or unforeseen complexities not adequately captured in initial planning.
Limited competition under SAP may have impacted price discovery.
Lack of detailed performance metrics makes assessing efficiency challenging.

Positive Signals

Contract awarded to a single entity, potentially streamlining management.
Firm-fixed-price contract shifts cost overrun risk to the contractor.
Services are essential for maintaining operational facilities.

Sector Analysis

This contract falls within the broader logistics and professional services sector, specifically focusing on facility support and moving services. The market for such services is competitive, with numerous providers capable of handling furniture relocation and installation. However, government contracts often have specific requirements and security protocols that can narrow the field. Benchmarking against similar government contracts for relocation services would typically consider factors like volume, distance, complexity of items, and installation requirements.

Small Business Impact

The data indicates that small business participation was not a primary consideration for this specific award, as the 'sb' field is false. There is no indication of a small business set-aside. Therefore, the direct impact on the small business ecosystem is likely minimal, and subcontracting opportunities for small businesses are not explicitly detailed in the provided information.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are generally embedded in the contract terms, including performance standards and payment schedules tied to successful delivery. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. Specific Inspector General jurisdiction would depend on the nature of any potential issues or investigations arising from the contract's performance.

Related Government Programs

Facility Support Services
Logistics and Moving Services
Government Relocation Contracts
Department of Veterans Affairs Procurement

Risk Flags

Significant Cost Overrun
Potential Underestimation of Scope
Limited Competition Concerns

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.5 million to IO ENVIRONMENTAL AND INFRASTRUCTURE INCORPORATED. FURNITURE & EQUIPMENT RELOCATION AND INSTALLATION SERVICES POP 10/01/2023 - 06/30/2024.

Who is the contractor on this award?

The obligated recipient is IO ENVIRONMENTAL AND INFRASTRUCTURE INCORPORATED.

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 $2.5 million.

What is the period of performance?

Start: 2023-10-01. End: 2024-12-31.

What factors contributed to the 5372% cost increase from the initial estimate to the final award amount?

The substantial 5372% increase from an initial estimate of $53,720 to an award of $2,455,205.04 for furniture relocation and installation services is a critical point of concern. Without further details on the original estimate's basis, it's difficult to pinpoint exact causes. However, common reasons for such dramatic escalations include significant underestimation of the scope of work, unforeseen complexities in the relocation process (e.g., building access issues, specialized handling requirements, extensive assembly/disassembly), changes in material or labor costs between estimation and award, or a poorly defined initial requirement that led to a much larger scope being solicited and awarded. It's also possible the initial estimate was a placeholder or a preliminary figure that did not reflect the true anticipated cost. A thorough review of the solicitation, offeror proposals, and negotiation records would be necessary to fully understand this discrepancy and assess if the final price represents fair value for the actual work performed or contracted.

How does the awarded price of $2.46 million compare to similar furniture relocation contracts within the federal government?

Comparing the $2.46 million award for furniture relocation and installation services requires context regarding the scale, duration, and specific services included. Federal contracts for large-scale office or facility relocations can range widely, from tens of thousands to millions of dollars, depending on the volume of items, distance, complexity, and whether installation or specialized services are involved. For instance, a move involving thousands of workstations, sensitive equipment, and multiple floors across different buildings would naturally command a higher price than a smaller departmental move. Without knowing the exact number of items, square footage, specific locations, and the detailed scope of installation required for this VA contract, a direct benchmark is challenging. However, the significant percentage increase over the initial estimate suggests that even for a contract of this type, the final price may be on the higher end, warranting scrutiny to ensure it aligns with the actual services rendered and market rates for comparable federal projects.

What are the primary risks associated with this contract, given its value and the observed cost escalation?

The primary risk associated with this contract is financial mismanagement and potential waste, fraud, or abuse, highlighted by the staggering 5372% cost escalation. This suggests a significant flaw in the initial cost estimation or procurement process, potentially leading to overpayment. Another risk is contractor performance; while the contract is firm-fixed-price, shifting risk to the contractor, a poorly managed or executed relocation can still lead to operational disruptions for the VA, damage to property, or delays. There's also a risk of scope creep if not managed tightly, where the contractor performs work beyond the original intent, further inflating costs. Finally, the limited competition under SAP, coupled with the high cost, raises concerns about whether the government secured the best possible price and value.

What is the track record of IO ENVIRONMENTAL AND INFRASTRUCTURE INCORPORATED in handling federal contracts of this nature?

Information regarding the specific track record of IO ENVIRONMENTAL AND INFRASTRUCTURE INCORPORATED for federal contracts, particularly for furniture relocation and installation services of this magnitude, is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance on similar government contracts, including client satisfaction ratings, history of cost overruns or underruns, adherence to schedules, and any documented performance issues or awards. Analyzing their portfolio of previous work, especially with the Department of Veterans Affairs or other agencies requiring similar services, would provide crucial insights into their capability, reliability, and pricing competitiveness. Without this historical data, it's difficult to definitively assess their suitability and past performance in executing contracts of this nature effectively and efficiently.

How does the 'Used Household and Office Goods Moving' classification (NAICS 484210) inform the analysis of this contract?

The North American Industry Classification System (NAICS) code 484210, 'Used Household and Office Goods Moving,' precisely categorizes the core service being procured: the physical relocation of furniture and equipment. This classification helps in understanding the nature of the work, which typically involves packing, loading, transporting, unloading, and potentially assembling/disassembling items. It also aids in benchmarking against industry standards and identifying potential competitors within this specific sector. For analysis, this code suggests that the contractor should possess expertise in logistics, fleet management, and careful handling of various types of goods. The significant cost escalation, however, might indicate that the 'installation' aspect or other unstated complexities within this NAICS code were more substantial than initially anticipated or budgeted for under this specific contract.

Industry Classification

NAICS: Transportation and Warehousing › Specialized Freight Trucking › Used Household and Office Goods Moving

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › OTHER TRANSPORT, TRAVEL, RELOCAT SV

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2840 ADAMS AVE STE 301, SAN DIEGO, CA, 92116

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $2,455,205

Exercised Options: $2,455,205

Current Obligation: $2,455,205

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C26218D0121

IDV Type: IDC

Timeline