Department of the Army's $17.6M janitorial services contract awarded to Allied Health Care Services shows potential value concerns

Contract Overview

Contract Amount: $17,647,248 ($17.6M)

Contractor: Allied Health Care Services

Awarding Agency: Department of Defense

Start Date: 2010-10-01

End Date: 2016-06-30

Contract Duration: 2,099 days

Daily Burn Rate: $8.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BASIC CLEANING

Place of Performance

Location: TOBYHANNA, MONROE County, PENNSYLVANIA, 18466

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $17.6 million to ALLIED HEALTH CARE SERVICES for work described as: BASIC CLEANING Key points: 1. The contract's duration of nearly 6 years for basic cleaning services raises questions about efficiency and potential for cost overruns. 2. Awarded as a 'not available for competition' contract, it limits opportunities for competitive bidding and potentially higher prices. 3. The firm-fixed-price structure provides some cost certainty, but the lack of competition could still lead to suboptimal pricing. 4. Performance was rated 'satisfactory' (ST), indicating basic adherence to requirements but not necessarily exceptional value. 5. The contract falls under the 'Facilities Support Services' sector, a common area for government spending with many potential providers. 6. The absence of small business set-aside or subcontracting requirements suggests limited focus on broader economic participation.

Value Assessment

Rating: fair

The total value of $17.6 million over approximately 6 years for janitorial services appears high when considering the basic nature of the service. Benchmarking against similar contracts for janitorial services across federal agencies is crucial. Without specific performance metrics or scope details, it's difficult to definitively assess value for money, but the extended duration and lack of competition suggest potential for inflated costs compared to a more competitive environment. The firm-fixed-price contract type offers some predictability, but the overall cost per year ($~2.9M) warrants closer scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not available for competition' (CT: NOT AVAILABLE FOR COMPETITION) justification, meaning it was not openly competed. This significantly limits the number of potential bidders and the government's ability to secure the most competitive pricing. The sole-source nature prevents a robust price discovery process that typically occurs when multiple firms vie for a contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. The government missed an opportunity to leverage market forces to drive down costs for essential cleaning services.

Public Impact

The primary beneficiaries are the facilities managed by the Department of the Army in Pennsylvania, ensuring a baseline level of cleanliness. The service delivered is basic janitorial and cleaning, essential for maintaining operational environments. The geographic impact is localized to Pennsylvania, where the contract was performed. While not explicitly stated, the contract likely supported a workforce for cleaning services, contributing to local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to higher costs for taxpayers.
Extended contract duration without clear performance justification could indicate inefficiency.
The 'not available for competition' status limits transparency and accountability.
Basic cleaning services are often subject to competitive bidding, making this award unusual.
No indication of small business participation or subcontracting goals.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Satisfactory performance rating suggests basic requirements were met.
Contract supported essential facility maintenance.

Sector Analysis

Janitorial services fall under the broader Facilities Support Services sector, which is a significant component of government contracting. This sector includes a wide range of services from cleaning and maintenance to landscaping and pest control. The market is generally competitive, with numerous small and large businesses capable of providing these services. Government spending in this area is consistent, driven by the need to maintain federal buildings and installations. Benchmarks for janitorial services vary widely based on scope, location, and facility type, but typically involve competitive bidding processes.

Small Business Impact

The contract details indicate that small business participation was not a primary consideration, as it was not set aside for small businesses (SB: false) and there's no mention of subcontracting requirements. This suggests that the prime contractor, Allied Health Care Services, likely performed the work directly or through its own employees, rather than engaging a network of small businesses. Consequently, the contract may have missed opportunities to foster small business growth and economic impact within the local community.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The 'satisfactory' performance rating suggests that basic oversight was in place to ensure contract requirements were met. However, the 'not available for competition' nature of the award raises questions about the thoroughness of the justification and approval process. Transparency could be enhanced by making the full justification for the sole-source award publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Facilities Maintenance Contracts
Government Cleaning Services
Department of Defense Support Services
Non-competitive Contract Awards
General Services Administration (GSA) Schedules for Facilities Maintenance

Risk Flags

Non-competitive award raises cost concerns.
Extended contract duration may indicate lack of market research or planning.
Potential for inflated pricing due to sole-source justification.
Lack of small business engagement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.6 million to ALLIED HEALTH CARE SERVICES. BASIC CLEANING

Who is the contractor on this award?

The obligated recipient is ALLIED HEALTH CARE SERVICES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.6 million.

What is the period of performance?

Start: 2010-10-01. End: 2016-06-30.

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

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION' (CT: NOT AVAILABLE FOR COMPETITION). This classification typically implies that only one responsible source exists to meet the government's needs. Common justifications include unique capabilities, urgent and compelling needs where competition is not feasible, or specific statutory requirements. Without access to the full contract file, the precise justification remains unknown. However, for a service as common as janitorial work, a sole-source award is unusual and suggests a potentially complex or specific requirement that could not be met through open competition, or perhaps a failure to properly plan and solicit competitively.

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

The contract's total value is $17.6 million over approximately 6 years (2099 days), averaging roughly $2.9 million per year. Benchmarking this figure requires detailed information about the scope of services, square footage cleaned, frequency of cleaning, and specific location within Pennsylvania. However, for basic janitorial services, this annual cost appears substantial. Industry benchmarks vary, but government contracts, especially those awarded non-competitively, can sometimes exceed market rates. A thorough analysis would involve comparing this rate against per-square-foot cleaning costs or costs for similar-sized facilities in the region, factoring in any unique requirements that might justify a higher price.

What were the specific performance standards and metrics used to rate the contractor as 'Satisfactory'?

The data indicates the contract performance was rated 'Satisfactory' (ST: PA). A 'Satisfactory' rating generally means the contractor met the basic requirements of the contract but did not necessarily exceed them. Specific performance standards would be detailed in the contract's Performance Work Statement (PWS). These typically include metrics related to cleanliness levels in various areas, response times for specific issues (e.g., spills), adherence to schedules, and proper use of supplies and equipment. Without the PWS, the exact metrics are unknown, but a 'Satisfactory' rating suggests no major deficiencies were noted, though it doesn't preclude opportunities for improvement or cost savings.

What is the track record of Allied Health Care Services in performing federal contracts, particularly for janitorial services?

The provided data does not offer insight into the specific track record of Allied Health Care Services beyond this single contract's satisfactory rating. To assess their track record, one would need to examine their past performance on other federal contracts, including any awards, past performance evaluations, and any instances of contract disputes or terminations. Information on their experience with similar-sized contracts, the types of services provided, and their overall performance history across different agencies would be necessary for a comprehensive evaluation of their reliability and capability in performing federal janitorial services.

Were there any cost savings realized or potential cost savings missed due to the firm-fixed-price contract type?

A firm-fixed-price (FFP) contract aims to provide cost certainty for the government by fixing the price regardless of the contractor's actual costs. In this case, the FFP structure means the government paid $17.6 million regardless of Allied Health Care Services' expenses. Potential cost savings are realized if the contractor operates efficiently and manages costs effectively, keeping a larger portion of the profit. However, the primary risk of cost savings being missed lies in the non-competitive award. If the fixed price itself was inflated due to the lack of competition, then taxpayers would have overpaid, negating any potential savings from the FFP structure. The 'Satisfactory' rating doesn't indicate exceptional efficiency.

What is the historical spending trend for janitorial services by the Department of the Army in Pennsylvania?

The provided data only includes details for this specific contract (ID: 561720, Award: $17.6M, Period: 2010-2016). To understand historical spending trends, a broader analysis of the Department of the Army's janitorial service contracts in Pennsylvania over a longer period would be required. This would involve querying federal procurement databases (like FPDS or USASpending) for similar contracts awarded by the Army in that geographic region. Examining trends would reveal whether spending has increased or decreased, whether contracts are typically competed or sole-sourced, and how contract values have evolved, providing context for the significance of this particular $17.6 million award.

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: W25G1V10R0037

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Allied Services Foundation

Address: 475 MORGAN HWY, SCRANTON, PA, 18508

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: $17,647,248

Exercised Options: $17,647,248

Current Obligation: $17,647,248

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline