State Department's $48.4M facilities support contract awarded to PAE Government Services, Inc. shows potential value concerns

Contract Overview

Contract Amount: $48,399,842 ($48.4M)

Contractor: PAE Government Services, Inc.

Awarding Agency: Department of State

Start Date: 2015-01-01

End Date: 2026-09-30

Contract Duration: 4,290 days

Daily Burn Rate: $11.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: IGF::CT::IGF LIGHT CONSTRUCTION CREW

Plain-Language Summary

Department of State obligated $48.4 million to PAE GOVERNMENT SERVICES, INC. for work described as: IGF::CT::IGF LIGHT CONSTRUCTION CREW Key points: 1. Contract awarded via full and open competition, suggesting a competitive pricing environment. 2. Long duration (over 10 years) may indicate a need for stable, ongoing services. 3. Time and Materials pricing structure can pose risks if not closely managed. 4. No small business set-aside, raising questions about small business participation. 5. Significant contract value warrants scrutiny of performance and cost-effectiveness. 6. Services provided are essential for maintaining diplomatic facilities.

Value Assessment

Rating: fair

The contract's value of $48.4 million over its extended period suggests a substantial investment in facilities support. Benchmarking against similar long-term, comprehensive facilities support contracts for government agencies is crucial. The Time and Materials (T&M) pricing model, while flexible, can lead to cost overruns if not meticulously monitored and controlled. Without detailed breakdowns of labor rates and material markups, a precise value-for-money assessment is challenging, but the extended duration and T&M structure warrant careful oversight to ensure costs remain reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely invited to submit proposals. This approach generally fosters a competitive environment, which should theoretically lead to more favorable pricing and better service offerings for the government. The number of bidders and the specific evaluation criteria used would provide further insight into the intensity of the competition and its impact on the final award.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it maximizes the potential for cost savings through competitive bidding and encourages a wider range of innovative solutions.

Public Impact

The primary beneficiaries are the Department of State and its personnel, who rely on well-maintained facilities for safe and effective operations. Services include essential maintenance, repair, and support for various facilities, ensuring operational readiness. Geographic impact is likely concentrated around the specific facilities managed under this contract, potentially including embassies or consulates. Workforce implications may involve direct employment by PAE Government Services, Inc. and potentially subcontracting opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Risk of cost escalation due to Time and Materials pricing structure.
Potential for scope creep over the long contract duration.
Limited visibility into specific labor rates and material costs without detailed reporting.
Ensuring consistent service quality across potentially diverse facility types and locations.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Long contract duration provides stability and continuity of essential services.
PAE Government Services, Inc. is an established contractor with experience in government support services.
Contract addresses critical needs for maintaining government facilities.

Sector Analysis

Facilities Support Services, categorized under NAICS code 561210, represents a significant segment of the government contracting market. This sector encompasses a wide range of services, including building operation and maintenance, janitorial services, and specialized support. The total government spending in this sector is substantial, with numerous contracts awarded annually to both large and small businesses. This particular contract fits within the broader trend of outsourcing facility management to specialized contractors to ensure operational efficiency and cost-effectiveness for government agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that large businesses were eligible to compete and potentially win the award. While this allows for maximum competition, it also means that opportunities for small businesses to directly benefit from this specific contract may be limited unless PAE Government Services, Inc. actively engages them as subcontractors. Further analysis would be needed to determine the extent of small business subcontracting planned or achieved.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of State's contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. The contract's long duration and T&M structure necessitate robust oversight mechanisms, including regular performance reviews, audits, and potentially the involvement of an Inspector General if significant issues arise. Transparency would be enhanced through detailed reporting requirements and public contract databases.

Related Government Programs

General Services Administration (GSA) Federal Buildings Fund
Department of Defense Facilities Maintenance Contracts
Department of Homeland Security Facilities Operations
State Department Overseas Buildings Operations

Risk Flags

Time and Materials pricing structure
Long contract duration
Lack of specific performance metrics in provided data

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $48.4 million to PAE GOVERNMENT SERVICES, INC.. IGF::CT::IGF LIGHT CONSTRUCTION CREW

Who is the contractor on this award?

The obligated recipient is PAE GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $48.4 million.

What is the period of performance?

Start: 2015-01-01. End: 2026-09-30.

What is the historical spending pattern for facilities support services at the Department of State?

Historical spending on facilities support services by the Department of State is substantial, reflecting the global footprint and critical nature of its diplomatic missions. While specific figures for this contract's predecessors are not provided, the agency consistently allocates significant resources to maintain its embassies, consulates, and other facilities worldwide. This includes costs for routine maintenance, repairs, utilities, security infrastructure, and specialized support services. Trends often show an increase in spending over time due to inflation, aging infrastructure, and evolving security requirements. Analyzing past contract awards for similar services can reveal patterns in pricing, contractor performance, and the evolution of service needs, providing context for the current $48.4 million award.

How does the Time and Materials (T&M) pricing structure compare to other contract types for similar services?

Time and Materials (T&M) contracts, like the one awarded to PAE Government Services, Inc., are characterized by payment based on the actual cost of direct labor (at specified hourly rates) and materials, plus a markup. This contrasts with fixed-price contracts, where the price is set regardless of the actual costs incurred, or cost-plus contracts, which reimburse actual costs plus a negotiated profit. T&M contracts offer flexibility, particularly when the scope of work is uncertain or likely to change. However, they carry a higher risk of cost overruns for the government, as the contractor is incentivized to bill for more hours or materials. For stable, well-defined services, fixed-price contracts are often preferred for better cost control. The choice of T&M here suggests a degree of uncertainty in the scope or a need for rapid response capabilities.

What is PAE Government Services, Inc.'s track record with similar government contracts?

PAE Government Services, Inc. has a significant track record in providing a wide array of support services to government agencies, including facilities management, logistics, and base operations support. They have held numerous large-scale contracts with various departments, including the Department of Defense and the Department of State. Their experience often involves managing complex operations in challenging environments. While specific performance metrics for past contracts are not detailed here, their continued success in winning competitive bids suggests a generally positive performance history. However, a thorough review of past performance evaluations, any contract disputes, or past performance questionnaires would be necessary for a comprehensive assessment.

What are the potential risks associated with the long duration of this contract?

The extended duration of this contract, spanning over 10 years (from January 1, 2015, to September 30, 2026), presents several potential risks. Firstly, it increases the likelihood of cost escalation due to inflation and potential changes in market rates for labor and materials over such a long period, especially with a T&M structure. Secondly, the government's needs or priorities might evolve, making the contracted services less relevant or requiring modifications that could be costly. Thirdly, long-term contracts can sometimes lead to complacency on the part of the contractor, potentially impacting service quality if not rigorously overseen. Finally, locking in a contractor for an extended period might preclude the government from benefiting from potentially more innovative or cost-effective solutions that emerge in the market later.

How does the $48.4 million total contract value compare to the annual spending on facilities support?

The total contract value of $48.4 million represents the ceiling amount authorized over the entire period of performance, including all potential delivery orders and option periods. It does not necessarily reflect the actual amount spent annually. To compare this to annual spending, one would need to divide the total value by the contract duration (approximately 11.75 years in this case), yielding an average annual potential value of around $4.1 million. However, actual annual spending can fluctuate significantly based on the specific needs and task orders issued. A more accurate comparison would involve examining the Department of State's historical annual expenditures on facilities support services to understand if this contract's average annual value is in line with, or deviates from, previous spending levels.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 1320 N COURTHOUSE RD STE 700, ARLINGTON, VA, 22201

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

Financial Breakdown

Contract Ceiling: $51,989,441

Exercised Options: $50,808,036

Current Obligation: $48,399,842

Actual Outlays: $7,602,865

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SAQMMA12D0165

IDV Type: IDC

Timeline