DOT awards $28.6K for elevator maintenance at Hilo ATCT, raising questions about competition and value

Contract Overview

Contract Amount: $28,636 ($28.6K)

Contractor: Kone Inc

Awarding Agency: Department of Transportation

Start Date: 2023-12-01

End Date: 2026-11-30

Contract Duration: 1,095 days

Daily Burn Rate: $26/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CONTRACTOR PROVIDES ELEVATOR MAINTENANCE AND SERVICES AT HILO ATCT.

Place of Performance

Location: HILO, HAWAII County, HAWAII, 96720

State: Hawaii Government Spending

Plain-Language Summary

Department of Transportation obligated $28,635.59 to KONE INC for work described as: CONTRACTOR PROVIDES ELEVATOR MAINTENANCE AND SERVICES AT HILO ATCT. Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Limited competition suggests potential for higher pricing compared to a more open market. 3. The contract duration of three years for a relatively small dollar amount warrants scrutiny. 4. Performance context is limited to elevator maintenance, a standard service with established benchmarks. 5. Sector positioning is within specialty trade contracting, a mature industry with available providers. 6. Risk indicators include the lack of competition and the potential for vendor lock-in.

Value Assessment

Rating: questionable

The contract value of $28,635.59 for three years of elevator maintenance appears reasonable on an annual basis. However, without competitive bidding, it is difficult to ascertain if this represents the best value for the government. Comparable contracts for similar services at other air traffic control towers could provide a benchmark, but this information is not readily available. The firm fixed-price structure mitigates cost overrun risk for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under simplified acquisition procedures, indicating it was likely awarded sole-source. The absence of a competitive process means multiple vendors were not solicited, which can lead to higher prices and reduced innovation. The rationale for a sole-source award, such as a lack of available qualified contractors or an urgent need, would need to be documented to justify this approach.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the most cost-effective service, as the government did not leverage market competition to drive down prices.

Public Impact

The primary beneficiaries are the users of the Hilo ATCT, who rely on functional elevators for access and operations. The service delivered is essential elevator maintenance and repair, ensuring the safety and accessibility of the facility. The geographic impact is localized to Hilo, Hawaii, where the air traffic control tower is situated. Workforce implications are minimal, likely involving a small team of technicians from the awarded contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award raises concerns about fair opportunity for other vendors.
Contract duration for a small value might indicate a lack of strategic sourcing.

Positive Signals

Firm fixed-price contract provides cost certainty.
Service is essential for facility operations and safety.

Sector Analysis

This contract falls within the specialty trade contracting sector, specifically focusing on elevator maintenance. This is a mature industry with established service providers. The market size for elevator maintenance services is substantial, driven by the ubiquitous need for elevators in commercial and government facilities. This contract represents a small expenditure within the broader Federal Aviation Administration's (FAA) facilities maintenance budget.

Small Business Impact

The contract was not competed under simplified acquisition procedures and the data indicates no small business set-aside. Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from this particular award. The contractor, KONE Inc., is a large corporation.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Aviation Administration's contracting officer and program managers responsible for facilities maintenance at the Hilo ATCT. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

FAA Facilities Maintenance Contracts
Specialty Trade Services Contracts
Air Traffic Control Tower Operations Support

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $28,635.59 to KONE INC. CONTRACTOR PROVIDES ELEVATOR MAINTENANCE AND SERVICES AT HILO ATCT.

Who is the contractor on this award?

The obligated recipient is KONE INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28,635.59.

What is the period of performance?

Start: 2023-12-01. End: 2026-11-30.

What is the track record of KONE Inc. in providing elevator maintenance services to the federal government?

KONE Inc. is a global leader in the elevator and escalator industry. While specific details on their federal contract history are not provided in this data snippet, their extensive experience in the private sector suggests a strong capability in delivering elevator maintenance and services. Federal agencies often contract with large, established companies like KONE due to their widespread presence, technical expertise, and ability to handle complex maintenance requirements. A deeper dive into federal procurement databases would reveal the extent and nature of their past performance with various government entities, including contract values, performance ratings, and any reported issues.

How does the annual cost of this contract compare to similar elevator maintenance contracts at other FAA facilities?

The annual cost for this contract is approximately $9,545 ($28,635.59 / 3 years). Benchmarking this against similar contracts at other FAA facilities is crucial for assessing value for money. Without access to a database of comparable FAA elevator maintenance contracts, a precise comparison is difficult. However, factors such as facility size, elevator type and age, traffic volume, and local labor rates in Hawaii would influence pricing. A sole-source award, as indicated here, inherently makes direct value comparison challenging, as market competition is absent. Ideally, the FAA would have internal benchmarks or conduct market research to ensure this price is competitive.

What are the primary risks associated with a sole-source award for elevator maintenance?

The primary risks associated with a sole-source award for elevator maintenance include: 1. **Higher Costs:** Without competition, the contractor may charge a premium, leading to taxpayers paying more than necessary. 2. **Reduced Service Quality:** The lack of competitive pressure might disincentivize the contractor from maintaining the highest service standards. 3. **Vendor Lock-in:** The agency becomes dependent on a single provider, making it difficult to switch even if performance is unsatisfactory or prices increase significantly in the future. 4. **Limited Innovation:** A sole-source environment may not encourage the contractor to introduce innovative solutions or cost-saving technologies. 5. **Potential for Complacency:** The absence of competitive threats can lead to complacency in service delivery and responsiveness.

What is the historical spending pattern for elevator maintenance at the Hilo ATCT?

The provided data only details a single contract awarded from December 1, 2023, to November 30, 2026. To understand historical spending patterns, we would need access to previous contract awards for elevator maintenance at the Hilo ATCT. This would involve reviewing procurement records for prior years to identify the number of contracts awarded, the contractors involved, the contract values, and the duration of those agreements. Analyzing this historical data would reveal trends in spending, whether the services have consistently been sole-sourced, and if costs have escalated over time, providing a clearer picture of the agency's investment in this area.

Does the firm fixed-price (FFP) contract type adequately address the risks of elevator maintenance services?

Yes, a Firm Fixed-Price (FFP) contract type is generally well-suited for services like elevator maintenance, especially when the scope of work is clearly defined. FFP contracts place the primary risk of cost overruns on the contractor, providing the government with cost certainty. For routine maintenance and scheduled services, the costs are relatively predictable. However, unexpected repairs or emergency services could potentially strain the contractor's resources if not adequately accounted for in their pricing. The FAA's oversight would be crucial to ensure that the FFP adequately covers all necessary maintenance and that the contractor is not cutting corners due to unforeseen repair needs.

Industry Classification

NAICS: Construction › Other Specialty Trade Contractors › All Other Specialty Trade Contractors

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 697DCK-24-Q-00016

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kone OYJ

Address: 1 KONE CT, MOLINE, IL, 61265

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: $49,121

Exercised Options: $28,636

Current Obligation: $28,636

Actual Outlays: $21,272

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline