DoD's $6.65M custodial and grounds maintenance contract awarded to Employment Horizons Inc. raises value questions

Contract Overview

Contract Amount: $6,649,918 ($6.6M)

Contractor: Employment Horizons Inc

Awarding Agency: Department of Defense

Start Date: 2025-04-01

End Date: 2030-03-31

Contract Duration: 1,825 days

Daily Burn Rate: $3.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CUSTODIAL, GROUNDS MAINTENANCE, REFUSE RECYCLE, AND FIREBREAK MAINTENANCE FOR PICATINNY ARSENAL

Place of Performance

Location: PICATINNY ARSENAL, MORRIS County, NEW JERSEY, 07806

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $6.6 million to EMPLOYMENT HORIZONS INC for work described as: CUSTODIAL, GROUNDS MAINTENANCE, REFUSE RECYCLE, AND FIREBREAK MAINTENANCE FOR PICATINNY ARSENAL 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 taxpayers. 3. The firm-fixed-price structure offers some cost certainty but doesn't guarantee value. 4. Performance context is limited as this is a new award. 5. The contract falls within the facilities support services sector. 6. The duration of the contract (5 years) suggests a need for stable service provision.

Value Assessment

Rating: questionable

Benchmarking the value of this $6.65 million contract is challenging without competitive data. The firm-fixed-price (FFP) type provides cost certainty for the government, but the absence of competition makes it difficult to assess if the pricing reflects market rates or represents a fair value for the custodial, grounds maintenance, refuse, and firebreak services. Without comparison to similar contracts or market benchmarks, it's hard to definitively state if this represents excellent or fair value.

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. This significantly limits the opportunity for multiple vendors to bid, which typically drives down prices and encourages innovation. The lack of competition raises concerns about whether the government secured the best possible pricing and service quality. The justification for a sole-source award would need to be thoroughly reviewed to understand why full and open competition was not feasible.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to ensure the lowest feasible price. This limits the government's ability to leverage market forces for cost savings.

Public Impact

The primary beneficiaries are the Department of Defense and personnel at Picatinny Arsenal, who will receive essential facility maintenance services. Services include custodial care, grounds maintenance, refuse recycling, and firebreak maintenance, ensuring a safe and functional environment. The geographic impact is localized to Picatinny Arsenal in New Jersey. The contract supports employment through Employment Horizons Inc., potentially creating or sustaining jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source award limits transparency and potential for better value.
Contract duration without competitive review could lock in suboptimal terms.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Contractor is providing essential facility support services.
Awarding to a specific entity may align with strategic goals or unique capabilities.

Sector Analysis

This contract falls within the Facilities Support Services sector, specifically janitorial services (NAICS 561720). This sector is characterized by a wide range of service providers, from small local businesses to large national corporations. Government spending in this area is substantial, supporting the operational readiness and upkeep of federal installations. Benchmarks for custodial and grounds maintenance can vary significantly based on location, scope of services, and security requirements.

Small Business Impact

The data indicates this contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This means opportunities for small businesses to participate in this contract are likely limited unless they are direct subcontractors to Employment Horizons Inc. The impact on the broader small business ecosystem for these services would depend on the prime contractor's subcontracting practices.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices at Picatinny Arsenal. Transparency is somewhat limited due to the sole-source nature of the award. Accountability measures would be defined in the contract terms and conditions, including performance standards and remedies for non-performance. The Inspector General may review the procurement process if concerns arise regarding the sole-source justification or contract execution.

Related Government Programs

Base Operations Support Services
Janitorial and Cleaning Services
Grounds Maintenance Contracts
Federal Facilities Management

Risk Flags

Sole-source award lacks competitive transparency.
Potential for suboptimal pricing due to lack of competition.
Performance risks not fully assessed without contractor history.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.6 million to EMPLOYMENT HORIZONS INC. CUSTODIAL, GROUNDS MAINTENANCE, REFUSE RECYCLE, AND FIREBREAK MAINTENANCE FOR PICATINNY ARSENAL

Who is the contractor on this award?

The obligated recipient is EMPLOYMENT HORIZONS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $6.6 million.

What is the period of performance?

Start: 2025-04-01. End: 2030-03-31.

What is the historical spending pattern for custodial and grounds maintenance at Picatinny Arsenal?

Historical spending data for custodial and grounds maintenance at Picatinny Arsenal is not directly available in the provided snippet. However, the current award of $6.65 million over five years suggests an average annual expenditure of approximately $1.33 million for these services. To understand historical patterns, one would need to access previous contract awards for similar services at this installation. Analyzing past contract values, durations, and awarded contractors would reveal trends in spending, potential increases or decreases in service scope, and the competitive landscape over time. This context is crucial for assessing whether the current award represents a significant deviation or a continuation of established spending levels.

What specific justification was provided for the sole-source award to Employment Horizons Inc.?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. The specific justification for this sole-source designation is not detailed in the snippet. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. For a contract of this magnitude and duration, a detailed justification document, often including market research and a rationale for why full and open competition was not feasible or advantageous, would have been required. Without access to that justification, it's impossible to fully assess the validity of the sole-source decision.

How does the firm-fixed-price contract type impact risk for both the government and the contractor?

A Firm-Fixed-Price (FFP) contract shifts the majority of the cost risk to the contractor. The government agrees to pay a set price regardless of the contractor's actual costs incurred in performing the work. This provides the government with significant budget certainty and protects against cost overruns. For the contractor, the risk lies in accurately estimating all costs associated with performing the services. If their actual costs exceed their estimate, their profit margin will be reduced, or they could incur a loss. Conversely, if they manage their costs efficiently, they can achieve a higher profit. This contract type incentivizes the contractor to control costs and perform efficiently to maximize their profit.

What are the potential performance risks associated with this contract?

Potential performance risks for this custodial, grounds maintenance, refuse, and firebreak maintenance contract include service quality issues, such as inadequate cleaning standards or missed maintenance tasks. There's also a risk of contractor non-compliance with safety regulations or environmental standards. Given the sole-source nature, there's a reduced incentive for the contractor to proactively improve services beyond the minimum requirements, as there's no immediate competitive threat. Furthermore, the 5-year duration could lead to complacency if not managed with robust oversight. Disruptions in service due to contractor staffing issues or unforeseen events at Picatinny Arsenal also pose a risk.

Are there any known issues with Employment Horizons Inc.'s past performance on similar government contracts?

Information regarding Employment Horizons Inc.'s past performance on similar government contracts is not provided in the data snippet. A comprehensive assessment of this contract's value and risk would typically involve reviewing the contractor's performance history, including any past performance evaluations, awards, or debriefings from previous government engagements. Without this information, it is difficult to gauge the contractor's reliability, quality of service delivery, and adherence to contract terms in previous roles. This is a critical data point for evaluating the overall risk associated with awarding this significant contract.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10 RIDGEDALE AVE, CEDAR KNOLLS, NJ, 07927

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: $21,767,136

Exercised Options: $6,649,918

Current Obligation: $6,649,918

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline