DoD's $26.1M custodial services contract awarded to ServiceSource Inc. raises value and competition concerns

Contract Overview

Contract Amount: $26,110,692 ($26.1M)

Contractor: Servicesource Inc

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2024-03-31

Contract Duration: 548 days

Daily Burn Rate: $47.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BUILDING OPERATIONS AND MAINTENANCE-CUSTODIAL SERVICES

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22350

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $26.1 million to SERVICESOURCE INC for work described as: BUILDING OPERATIONS AND MAINTENANCE-CUSTODIAL SERVICES Key points: 1. The contract's value proposition is unclear due to a lack of competitive bidding. 2. Limited competition may have led to suboptimal pricing for custodial services. 3. The firm-fixed-price structure offers some cost certainty but doesn't guarantee value. 4. Performance context is limited as this is a delivery order under a larger vehicle. 5. The contract falls within Facilities Support Services, a broad category with varying market dynamics. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

Benchmarking the value of this $26.1 million custodial services contract is challenging without comparable contract data or a competitive process. The firm-fixed-price (FFP) contract type provides cost certainty for the government, but the lack of competition means there's no clear market benchmark to assess if the pricing is optimal. Without a competitive award, it's difficult to determine if the government received the best possible value for these essential building operations and maintenance services. Further analysis would require understanding the scope of services and comparing them to similar FFP contracts for custodial services in the Washington D.C. metropolitan area.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' (NAF) status, indicating a sole-source or limited competition procurement. The specific justification for this limited competition is not provided in the data. A sole-source award means only one vendor was solicited, eliminating the possibility of price discovery through a bidding process. This significantly reduces the likelihood of achieving the most competitive pricing and may indicate a lack of available qualified vendors or a specific requirement that only one vendor could meet.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of a competitive bidding process. The lack of competition limits the government's ability to negotiate favorable terms and pricing.

Public Impact

The primary beneficiaries are the Department of Defense facilities in Washington D.C. that require custodial services. Essential services such as cleaning, sanitation, and general maintenance of facilities are delivered. The geographic impact is concentrated within the Washington Headquarters Services (WHS) area in Virginia. The contract supports jobs within the facilities management and custodial services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment and suboptimal service quality.
The sole-source nature of the award warrants scrutiny of the justification for limited competition.
Absence of small business participation could limit economic opportunities for smaller firms in this sector.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
The contract duration of 548 days ensures continuity of essential services.
Awarded to ServiceSource Inc., a known provider in facilities support services.

Sector Analysis

This contract falls under the Facilities Support Services sector, a broad category encompassing a wide range of services necessary for the operation and maintenance of buildings. The custodial services sub-sector is characterized by a mix of large and small providers, with significant demand driven by government facilities. The total federal spending on Facilities Support Services (NAICS 561210) is substantial, with custodial services representing a key component. Benchmarking this contract's value against the broader sector requires detailed service scope comparison, as pricing can vary significantly based on facility size, complexity, and service level agreements.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (ss=false, sb=false). This suggests that opportunities for small businesses to directly perform these custodial services under this specific award were limited. It is important to assess whether the prime contractor, ServiceSource Inc., has a subcontracting plan that includes small businesses. Without specific subcontracting data, it's difficult to determine the overall impact on the small business ecosystem for custodial services within the Washington D.C. area.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense and the Washington Headquarters Services. As a delivery order under a larger contract vehicle, the underlying contract likely has established oversight mechanisms. Transparency regarding the justification for the sole-source award and the specific performance metrics would be key to assessing accountability. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Building Operations and Maintenance Contracts
Department of Defense Facilities Management
Custodial Services Contracts
Government Facilities Support Services

Risk Flags

Sole-source award raises concerns about fair pricing and competition.
Lack of transparency regarding the justification for limited competition.
Potential for overpayment due to absence of competitive bidding.
No indication of small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.1 million to SERVICESOURCE INC. BUILDING OPERATIONS AND MAINTENANCE-CUSTODIAL SERVICES

Who is the contractor on this award?

The obligated recipient is SERVICESOURCE INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Washington Headquarters Services).

What is the total obligated amount?

The obligated amount is $26.1 million.

What is the period of performance?

Start: 2022-09-30. End: 2024-03-31.

What is the specific justification for awarding this $26.1 million custodial services contract on a sole-source basis?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION' (CT: 'NOT AVAILABLE FOR COMPETITION'), which typically signifies a sole-source or limited competition procurement. The specific justification for this limited competition is not detailed in the provided data. Common reasons for sole-source awards include unique capabilities of a single contractor, urgent and compelling needs where only one source can be identified, or specific government requirements that preclude full and open competition. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to definitively state why this contract was not competed. This lack of transparency hinders a thorough assessment of value for money and taxpayer impact.

How does the pricing of this contract compare to similar custodial services contracts awarded by the government?

Directly comparing the pricing of this $26.1 million contract is difficult without access to detailed service scope and performance metrics, as well as comparable contract data. The contract is a firm-fixed-price (FFP) award, which provides cost certainty. However, the lack of competition means there is no direct market benchmark to assess if the price is optimal. To perform a robust comparison, one would need to identify similar FFP contracts for custodial services awarded by agencies like the General Services Administration (GSA) or other Department of Defense entities in the Washington D.C. metropolitan area. Analyzing the price per square foot or price per service hour, adjusted for contract scope and duration, would be necessary to determine if this contract represents good value.

What are the potential risks associated with awarding a large facilities support contract without full and open competition?

Awarding a large contract like this $26.1 million custodial services agreement without full and open competition introduces several potential risks. Firstly, the government may not achieve the most favorable pricing, potentially leading to overpayment for services. Secondly, the lack of competition can stifle innovation, as contractors may have less incentive to offer improved methods or technologies. Thirdly, it can create a perception of favoritism or a lack of fairness in the procurement process. Finally, without a competitive baseline, it becomes harder to objectively assess the contractor's performance and value proposition over the contract's lifecycle. The absence of a competitive process limits the government's leverage in negotiations and contract management.

What is the track record of ServiceSource Inc. in providing facilities support and custodial services to the federal government?

ServiceSource Inc. is a known entity in providing services to the federal government, often focusing on areas related to employment for individuals with disabilities and facilities management. While the provided data confirms their role as the contractor for these custodial services, a comprehensive assessment of their track record would require reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and the successful completion of previous similar contracts. Understanding their history with the government, particularly in delivering custodial and facilities support services, is crucial for evaluating the reliability and quality of service expected under this current $26.1 million award.

How does this contract fit into the broader spending patterns for facilities support services within the Department of Defense?

This $26.1 million contract for custodial services represents a component of the Department of Defense's (DoD) overall spending on facilities support and maintenance. The DoD manages an extensive portfolio of real property, requiring significant investment in operational services. Spending in this category is typically driven by the size and number of facilities, geographic locations, and the specific services required (e.g., cleaning, groundskeeping, HVAC maintenance). While this specific contract's value is substantial, it needs to be viewed in the context of the DoD's total facilities budget, which can run into billions of dollars annually. Analyzing historical spending trends for custodial services and facilities support within the DoD would provide further context on whether this contract represents an increase, decrease, or stable level of investment in these essential services.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10467 WHITE GRANITE DRIVE, OAKTON, VA, 22124

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: $26,110,692

Exercised Options: $26,110,692

Current Obligation: $26,110,692

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ003421D0030

IDV Type: IDC

Timeline