VA awards $4.2M janitorial contract to OE Enterprises Inc. in South Carolina

Contract Overview

Contract Amount: $4,238,186 ($4.2M)

Contractor: OE Enterprises Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-02-01

End Date: 2027-01-31

Contract Duration: 1,460 days

Daily Burn Rate: $2.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NEW BUILDING JANITORIAL SERVICES

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29405

State: South Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.2 million to OE ENTERPRISES INC for work described as: NEW BUILDING JANITORIAL SERVICES Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The contract was not competed, raising questions about potential cost savings through competition. 3. The duration of the contract (4 years) suggests a need for stable, long-term janitorial services. 4. The North American Industry Classification System (NAICS) code 561720 identifies the service as Janitorial Services. 5. The award was made to a single vendor, OE Enterprises Inc., with no indication of subcontracting. 6. The contract is classified as 'SC' (Small Business Concern), suggesting it may have been intended for small business participation.

Value Assessment

Rating: fair

Without a competitive bidding process, it is difficult to benchmark the value for money. The firm-fixed-price structure provides cost certainty, but the absence of competition means potential savings from market forces were not realized. Comparing this to similar janitorial contracts for federal facilities of comparable size and scope would be necessary to assess if the pricing is aligned with market rates. The lack of competition is a primary factor in the 'fair' rating.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not publicly advertised or competed among multiple vendors. The Department of Veterans Affairs directly awarded this contract to OE Enterprises Inc. The lack of competition limits the government's ability to explore various service offerings and pricing structures, potentially leading to higher costs than if multiple bids were considered.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. Without a competitive process, there is less assurance that the selected vendor offered the best possible value.

Public Impact

Veterans and staff at Department of Veterans Affairs facilities in South Carolina will benefit from maintained cleanliness and hygiene. Essential janitorial services, including cleaning, dusting, vacuuming, and waste removal, will be delivered. The geographic impact is focused on South Carolina, where the VA facilities requiring these services are located. The contract supports employment within the janitorial services sector in South Carolina.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits opportunities for other qualified vendors.
Absence of performance metrics or quality assurance details in the provided data.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Contract duration suggests a stable, ongoing need for services.
Award to a small business concern aligns with federal small business goals.

Sector Analysis

The janitorial services sector is a significant part of the facilities management industry, characterized by numerous small and large providers. Federal contracts for janitorial services are common across various agencies, supporting the maintenance of government buildings. Benchmarking this contract's value would typically involve comparing its per-square-foot cost or hourly rates to similar contracts awarded by other federal agencies or to private sector clients in the same geographic region. The market is generally competitive, making sole-source awards less common for routine services.

Small Business Impact

The contract is designated as a small business concern ('SC'). While the data indicates it was not competed, the 'SC' designation suggests an intention to support small businesses. However, the sole-source nature of the award means that other small businesses in the janitorial services sector in South Carolina did not have an opportunity to bid on this contract. Further information would be needed to determine if OE Enterprises Inc. is a small business and if any subcontracting opportunities were mandated or utilized.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and facility management departments. Accountability measures would be defined in the contract's statement of work, including performance standards and payment terms. Transparency is limited by the sole-source nature of the award; however, contract award data is generally publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Building Maintenance Contracts
Government Janitorial Services
Department of Veterans Affairs Facility Management

Risk Flags

Sole-source award
Lack of competitive pricing data
Extended contract duration without competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.2 million to OE ENTERPRISES INC. NEW BUILDING JANITORIAL SERVICES

Who is the contractor on this award?

The obligated recipient is OE ENTERPRISES 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 $4.2 million.

What is the period of performance?

Start: 2023-02-01. End: 2027-01-31.

What is the historical spending pattern for janitorial services by the Department of Veterans Affairs in South Carolina?

Analyzing historical spending patterns for janitorial services by the Department of Veterans Affairs (VA) in South Carolina is crucial for understanding the context of this $4.2 million award. Without specific historical data for this exact location or facility, a general assessment can be made. Federal agencies like the VA typically have ongoing needs for janitorial services across their numerous facilities. Spending can fluctuate based on facility upgrades, changes in service requirements, and the number of facilities managed. The duration of this contract (four years) suggests a stable, long-term requirement. If previous contracts for similar services in the region were competitively bid and awarded at significantly lower prices, it would raise concerns about the value of this current sole-source award. Conversely, if past contracts were also sole-source or faced similar cost structures, it might indicate consistent pricing for these services in the region. A detailed review would involve examining prior contract awards for janitorial services to the same or similar facilities within South Carolina managed by the VA, looking at award amounts, contract types, and competition levels to establish a baseline for comparison.

How does the pricing of this contract compare to similar janitorial services contracts awarded by other federal agencies?

Benchmarking the pricing of this $4.2 million janitorial services contract against similar contracts awarded by other federal agencies is essential for assessing value for money. Since this contract was awarded on a sole-source basis to OE Enterprises Inc., there is no direct competitive pricing data from this specific award. To perform a comparison, one would need to identify other federal contracts for janitorial services of comparable scope, size (e.g., square footage of facilities serviced), and service level requirements, particularly those awarded in similar geographic regions or to facilities with comparable usage patterns. Key metrics for comparison would include the cost per square foot, hourly labor rates, or overall contract value relative to the services provided. If comparable competitively awarded contracts show significantly lower pricing, it would suggest that this sole-source award may be overpriced. Conversely, if similar contracts, even those awarded competitively, fall within a similar price range, it could indicate that the pricing is in line with market rates for federal janitorial services.

What are the specific performance standards and quality assurance measures included in this contract?

The provided data does not specify the performance standards or quality assurance measures for this janitorial services contract. Typically, federal contracts include a detailed Statement of Work (SOW) that outlines the required services, frequency, and quality expectations. Performance is often monitored through metrics such as response times to service requests, cleanliness inspection scores, and adherence to schedules. Quality assurance procedures might involve regular site inspections by government representatives, customer satisfaction surveys, and performance-based payment adjustments. Without access to the full contract document, it is impossible to assess the robustness of these measures. However, the absence of explicit performance details in the summary data is a limitation in evaluating the contractor's accountability and the overall effectiveness of the service delivery.

What is the track record of OE Enterprises Inc. in performing federal janitorial contracts?

Information regarding the specific track record of OE Enterprises Inc. in performing federal janitorial contracts is not detailed in the provided data. To assess their performance history, one would need to consult federal procurement databases (like SAM.gov or FPDS) to review past awards, contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any reported issues or successes. A positive track record with previous federal contracts, particularly for similar janitorial services, would lend confidence to the current award. Conversely, a history of poor performance, contract disputes, or unresolved issues would raise concerns about OE Enterprises Inc.'s ability to meet the requirements of this new four-year contract. Given this is a sole-source award, a thorough review of their past performance is even more critical to justify the lack of competition.

What are the potential risks associated with awarding a four-year janitorial contract on a sole-source basis?

Awarding a four-year janitorial contract on a sole-source basis presents several potential risks. Firstly, the lack of competition means the government may not be receiving the best possible price, potentially leading to overspending taxpayer dollars. Without competitive bids, there's less incentive for the contractor to offer cost efficiencies. Secondly, the government is locked into a single provider for an extended period, limiting its flexibility to switch to a potentially better or more cost-effective vendor if circumstances change or if the current vendor's performance declines. Thirdly, sole-source awards can create an appearance of impropriety or favoritism, even if the award is justified, potentially undermining public trust. Finally, without the pressure of competition, the contractor might be less motivated to innovate or proactively improve service quality over the contract's duration. Robust oversight and clear performance metrics are essential to mitigate these risks.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C77023Q0065

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 348 ELIZABETH BRADY RD, HILLSBOROUGH, NC, 27278

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: $7,281,982

Exercised Options: $4,238,186

Current Obligation: $4,238,186

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline