DOT awards $361K elevator maintenance contract to TK Elevator Corporation in Minnesota

Contract Overview

Contract Amount: $361,097 ($361.1K)

Contractor: TK Elevator Corporation

Awarding Agency: Department of Transportation

Start Date: 2023-04-13

End Date: 2028-03-31

Contract Duration: 1,814 days

Daily Burn Rate: $199/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MIN DISTRICT - FULL SERVICE ELEVATOR MAINTENANCE

Place of Performance

Location: FARMINGTON, DAKOTA County, MINNESOTA, 55024

State: Minnesota Government Spending

Plain-Language Summary

Department of Transportation obligated $361,097.39 to TK ELEVATOR CORPORATION for work described as: MIN DISTRICT - FULL SERVICE ELEVATOR MAINTENANCE Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1814 days (approx. 5 years) indicates a long-term need for elevator services. 3. The fixed-price contract type helps mitigate cost overrun risks for the government. 4. The award amount appears modest, potentially indicating a focused scope of work or competitive pricing. 5. The specific nature of elevator maintenance suggests a critical infrastructure support role.

Value Assessment

Rating: good

Benchmarking the value of this contract requires more granular data on elevator maintenance services. However, the award amount of $361,097.39 over approximately five years suggests a reasonable annual expenditure for specialized maintenance. Without comparable contracts for similar facilities or specific elevator types, a precise value-for-money assessment is challenging. The fixed-price nature of the contract provides cost certainty, which is a positive indicator for government spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of two bidders (as indicated by 'no': 2) suggests some level of competition, though a higher number of bidders would typically indicate more robust price discovery. The fact that it was competed openly is a positive sign for achieving fair market pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better service quality compared to sole-source or limited competition awards.

Public Impact

The Federal Aviation Administration (FAA) benefits from this contract by ensuring the operational readiness of essential elevator systems. This contract provides critical maintenance services for elevators, likely within FAA facilities in Minnesota. The geographic impact is localized to Minnesota, where the serviced facilities are located. The contract supports the maintenance workforce, potentially including technicians and support staff employed by TK Elevator Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may not have yielded the absolute lowest price.
Scope of work for 'Other Building Equipment Contractors' is broad; specific elevator needs might be complex.
Long contract duration could lead to unforeseen maintenance issues not fully captured in the initial pricing.

Positive Signals

Awarded via full and open competition, indicating a fair process.
Firm fixed-price contract provides cost predictability.
TK Elevator Corporation is a known entity in the elevator industry, suggesting established capabilities.
Contract duration aligns with typical maintenance cycles for complex equipment.

Sector Analysis

The contract falls under the 'Other Building Equipment Contractors' category, which encompasses a wide range of services related to the maintenance and repair of building systems. This sector is crucial for maintaining the functionality and safety of federal facilities. Spending in this area is often driven by the need for specialized expertise and adherence to strict regulatory standards. Comparable spending benchmarks would depend heavily on the specific type and number of elevators being maintained.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information suggesting significant subcontracting opportunities for small businesses. The award to TK Elevator Corporation, a large entity, implies that small business participation may be limited unless TK Elevator has its own small business subcontracting program.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Federal Aviation Administration. The firm fixed-price nature simplifies some aspects of financial oversight. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Aviation Administration Facility Maintenance
General Services Administration Building Operations
Department of Defense Facilities Management
Federal Building and Fire Safety Program

Risk Flags

Limited competition
Potential for cost increases over contract duration
Broad NAICS code requires detailed SOW review

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $361,097.39 to TK ELEVATOR CORPORATION. MIN DISTRICT - FULL SERVICE ELEVATOR MAINTENANCE

Who is the contractor on this award?

The obligated recipient is TK ELEVATOR CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $361,097.39.

What is the period of performance?

Start: 2023-04-13. End: 2028-03-31.

What is the historical spending pattern for elevator maintenance services by the FAA in Minnesota?

Analyzing historical spending for elevator maintenance by the FAA in Minnesota would require accessing detailed procurement data over several fiscal years. This would involve filtering contract awards by agency (FAA), geographic location (Minnesota), and product/service code related to elevator maintenance. Such an analysis could reveal trends in contract values, the number of competitors, and the types of contracts awarded (e.g., fixed-price vs. cost-reimbursement). Without access to this specific historical data, it's difficult to determine if the current $361,097.39 award represents an increase, decrease, or stable level of spending compared to previous periods. Understanding these patterns is crucial for budget forecasting and identifying potential cost efficiencies.

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

A direct comparison of this contract's pricing to similar federal elevator maintenance contracts is challenging without specific details on the scope of work, number and type of elevators, and service level agreements. However, the annual value of this contract is approximately $72,219 ($361,097.39 / 5 years). To benchmark effectively, one would need to identify contracts with comparable facility sizes, elevator models (e.g., passenger, freight, accessibility), and maintenance frequencies (e.g., preventative, on-call). Data from agencies like the General Services Administration (GSA), which manages numerous federal buildings, could provide relevant comparisons. If this contract's per-elevator or per-service-call cost is significantly higher than benchmarks, it might indicate less competitive pricing or a more demanding scope.

What is TK Elevator Corporation's track record with federal government contracts, particularly for maintenance services?

TK Elevator Corporation, formerly Thyssenkrupp Elevator, has a significant history of engaging with the U.S. federal government. A review of federal procurement databases would likely show numerous awards for elevator installation, maintenance, and repair services across various agencies and locations. Their track record would be assessed based on factors such as past performance ratings, contract completion success, any history of disputes or contract terminations, and compliance with federal regulations. For this specific contract, the FAA's evaluation of TK Elevator's past performance would have been a key factor in the award decision. Generally, large, established companies like TK Elevator often possess the resources and experience to handle complex federal maintenance requirements.

What are the potential risks associated with a long-term (5-year) fixed-price contract for elevator maintenance?

A primary risk with a long-term, fixed-price contract for elevator maintenance is the potential for the contractor to face increased costs due to unforeseen circumstances, such as unexpected equipment failures, rising labor costs, or inflation, which are not fully accounted for in the initial pricing. If these costs exceed the fixed price, the contractor might be incentivized to cut corners on service quality to maintain profitability, potentially impacting reliability and safety. Conversely, if costs remain lower than anticipated, the government might be overpaying relative to the actual service provided. Another risk is technological obsolescence; if elevator technology advances rapidly, the fixed-price contract might not cover upgrades or adaptations to newer systems, requiring separate procurements.

How does the 'Other Building Equipment Contractors' classification impact the understanding of this contract's specific services?

The classification 'Other Building Equipment Contractors' (NAICS code 238290) is quite broad and encompasses a wide array of specialized trades involved in installing and servicing building equipment, excluding HVAC, electrical, and plumbing. While this contract is specifically for elevator maintenance, the broad NAICS code means that detailed service specifications are crucial for understanding the exact scope. This classification suggests the contract covers the mechanical and electrical systems integral to elevator operation, including routine inspections, preventative maintenance, lubrication, adjustments, and potentially emergency repairs. It does not typically include major structural modifications or complete system replacements unless explicitly detailed within the contract's statement of work.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Other Building Equipment Contractors

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 697DCK-23-R-00129

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4355 EXCEL PKWY STE 800, ADDISON, TX, 75001

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

Financial Breakdown

Contract Ceiling: $691,596

Exercised Options: $361,097

Current Obligation: $361,097

Actual Outlays: $165,284

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline