Department of Defense awards $26.5M contract for custodial services to Licking-Knox Goodwill Industries, Inc

Contract Overview

Contract Amount: $26,508,426 ($26.5M)

Contractor: Licking-Knox Goodwill Industries, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-21

End Date: 2024-03-31

Contract Duration: 2,018 days

Daily Burn Rate: $13.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8505860002!CUSTODIAL JANITORIAL SERVICES

Place of Performance

Location: COLUMBUS, FRANKLIN County, OHIO, 43218

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $26.5 million to LICKING-KNOX GOODWILL INDUSTRIES, INC. for work described as: 8505860002!CUSTODIAL JANITORIAL SERVICES Key points: 1. Contract awarded to a single provider, raising questions about competition and potential cost savings. 2. The firm fixed-price contract structure aims to control costs, but requires careful monitoring of service delivery. 3. Long contract duration (over 5 years) suggests a need for consistent, reliable service provision. 4. Geographic concentration in Ohio may limit opportunities for other providers. 5. The absence of a small business set-aside warrants examination of subcontracting opportunities. 6. Performance context is limited without specific metrics on service quality or efficiency.

Value Assessment

Rating: fair

The contract value of $26.5 million over approximately 5.5 years averages to about $4.8 million annually. Benchmarking this against similar custodial service contracts across federal agencies is challenging without more granular data on the scope of services, square footage cleaned, and specific service level agreements. However, the lack of competitive bidding suggests that a thorough price reasonableness analysis was critical before award to ensure fair market value was obtained.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. While the data does not specify the justification for this approach, sole-source awards typically occur when only one responsible source is available or in cases of urgent need. The limited competition means that taxpayers did not benefit from the price discovery that typically occurs in a competitive bidding process.

Taxpayer Impact: The lack of competition means taxpayers may not have received the lowest possible price for these services, as there was no pressure from competing bids to drive down costs.

Public Impact

The primary beneficiary is the Department of Defense, which will receive essential custodial and janitorial services. Services include maintaining cleanliness and sanitation across facilities managed by the Defense Logistics Agency. The geographic impact is concentrated in Ohio, where Licking-Knox Goodwill Industries, Inc. is based and likely operates. This contract supports employment opportunities within Licking-Knox Goodwill Industries, Inc., a social enterprise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to higher costs for taxpayers.
Sole-source award limits transparency in price determination.
Long-term contract duration without clear performance metrics could mask inefficiencies.
Geographic concentration might overlook potentially more cost-effective providers elsewhere.

Positive Signals

Award to a social enterprise like Goodwill can have positive community and workforce development impacts.
Firm fixed-price contract provides cost certainty for the government.
The Defense Logistics Agency is ensuring essential facility maintenance services are secured.

Sector Analysis

The custodial and janitorial services sector is a significant part of the broader facilities management industry. Federal spending in this area is substantial, supporting a wide range of government operations. This contract, valued at $26.5 million, represents a portion of the Defense Logistics Agency's operational budget for maintaining its infrastructure. Comparable spending benchmarks would typically involve analyzing the cost per square foot for similar services across different government installations and private sector contracts.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have a specific small business subcontracting goal indicated in the provided data. Licking-Knox Goodwill Industries, Inc., while a non-profit organization, operates as a large entity in terms of contract value. Further investigation would be needed to determine if any subcontracting opportunities are being offered to smaller businesses within the janitorial services ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency's contracting and program management offices. Accountability measures would be tied to the terms and conditions of the firm fixed-price definitive contract, including service level agreements and delivery schedules. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Logistics Agency Facilities Maintenance Contracts
Department of Defense General Services Contracts
Federal Custodial and Janitorial Services
Non-Profit Organization Federal Contracts

Risk Flags

Sole-source award lacks competitive price discovery.
Limited transparency on contract justification and performance metrics.
Potential for higher costs due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.5 million to LICKING-KNOX GOODWILL INDUSTRIES, INC.. 8505860002!CUSTODIAL JANITORIAL SERVICES

Who is the contractor on this award?

The obligated recipient is LICKING-KNOX GOODWILL INDUSTRIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $26.5 million.

What is the period of performance?

Start: 2018-09-21. End: 2024-03-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification, such as the existence of only one responsible source or an urgent and compelling need, is not detailed in the summary data. Typically, federal agencies must document and justify sole-source procurements to ensure fair and open competition principles are upheld to the greatest extent possible. Without this documentation, it is difficult to assess if the government received the best value or if alternative solutions were adequately explored. This lack of transparency in the procurement process raises concerns about potential inefficiencies and missed opportunities for cost savings through competitive bidding.

How does the annual cost of this contract compare to industry benchmarks for similar services?

The contract's total value is $26.5 million over a period from September 21, 2018, to March 31, 2024, which is approximately 5.5 years. This averages to roughly $4.8 million per year. Benchmarking this figure accurately requires detailed information on the scope of services, square footage of facilities cleaned, frequency of cleaning, specific service level requirements (e.g., types of cleaning, waste removal, disinfection protocols), and geographic location. General industry benchmarks for custodial services can vary widely. However, without a competitive process, it is challenging to definitively state whether this annual cost represents a fair market price or if it could have been lower through competition. A thorough price reasonableness analysis by the agency would have been crucial.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not include specific details regarding the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this custodial services contract. For a firm fixed-price contract, especially one awarded on a sole-source basis, robust KPIs and SLAs are critical for ensuring the contractor meets the government's requirements for cleanliness, sanitation, and timely service delivery. These metrics typically include standards for response times, quality of cleaning, adherence to safety protocols, and customer satisfaction. Without visibility into these performance standards, it is difficult to assess the effectiveness of the service delivery and whether the Department of Defense is receiving adequate value for the funds expended. The contract's duration suggests a need for consistent performance over a long period.

What is the track record of Licking-Knox Goodwill Industries, Inc. in performing similar federal contracts?

The provided data indicates that Licking-Knox Goodwill Industries, Inc. is the contractor for this $26.5 million definitive contract. While the data confirms this award, it does not offer details on their past performance history with the federal government or other large-scale contracts. Goodwill organizations often have a mission focused on employment and training for individuals with barriers to employment, and many successfully perform government contracts. However, a comprehensive assessment of their track record would require reviewing past performance evaluations, contract completion history, and any instances of contract disputes or deficiencies on previous federal awards. This information is crucial for understanding their capability to consistently deliver the required custodial services effectively.

What is the historical spending trend for custodial services by the Defense Logistics Agency?

The provided data focuses on a single contract awarded in 2018 with an end date in 2024. It does not offer historical spending trends for custodial services by the Defense Logistics Agency (DLA) or the Department of Defense (DoD) overall. To analyze historical spending, one would need access to broader contract databases or agency budget reports that track expenditures on janitorial and custodial services over multiple fiscal years. Understanding these trends would help contextualize the $26.5 million award, revealing whether spending in this category has increased, decreased, or remained stable. It would also help identify patterns in contracting approaches, such as the frequency of sole-source awards versus competitive bids for such services.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SP470218R0528

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 65 S 5TH ST, NEWARK, OH, 43058

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: $26,508,426

Exercised Options: $26,508,426

Current Obligation: $26,508,426

Actual Outlays: $16,125,688

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline