DoD's $13.7M janitorial services contract with Goodwill Keystone Area awarded without competition

Contract Overview

Contract Amount: $13,718,774 ($13.7M)

Contractor: Goodwill Keystone Area

Awarding Agency: Department of Defense

Start Date: 2006-02-28

End Date: 2011-06-30

Contract Duration: 1,948 days

Daily Burn Rate: $7.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CUSTODIAL - LABOR (BASE)

Place of Performance

Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17101

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $13.7 million to GOODWILL KEYSTONE AREA for work described as: CUSTODIAL - LABOR (BASE) Key points: 1. Contract awarded to a single, non-profit provider, raising questions about competitive pricing and market alternatives. 2. Long-term contract duration (over 5 years) suggests a stable, ongoing need for these services. 3. The contract's value, while significant, needs benchmarking against similar janitorial service contracts to assess value for money. 4. Lack of competition may limit opportunities for other service providers, including small businesses. 5. The use of a firm-fixed-price contract type indicates that the price is set regardless of the actual costs incurred by the contractor. 6. The contract was awarded to Goodwill Keystone Area, a non-profit organization, which may have specific social or mission-related objectives.

Value Assessment

Rating: fair

Benchmarking this $13.7 million contract for janitorial services is challenging without comparable data for similar contracts awarded under competitive processes. The absence of competition means there's no direct market price discovery to assess if the fixed price is optimal. However, the contract's duration and the nature of the services suggest a consistent need. Further analysis would require comparing the per-square-foot cleaning costs or labor rates to industry averages for government contracts of similar scope and location.

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. The data indicates it was 'NOT AVAILABLE FOR COMPETITION'. This approach bypasses the standard procurement process where multiple vendors would bid, potentially leading to a lower price through competitive pressure. The lack of competition means the government did not explore alternative providers or negotiate based on multiple offers.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the benefit of competition in driving down prices is lost. It also limits opportunities for other businesses to secure government contracts.

Public Impact

The primary beneficiary is Goodwill Keystone Area, a non-profit organization, which receives significant funding for its services. The contract delivers essential janitorial and custodial services, likely to Department of Defense facilities. Services are geographically focused within Pennsylvania (PA), as indicated by the 'st' and 'sn' fields. This contract supports employment opportunities, particularly for individuals served by Goodwill's mission, contributing to workforce development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Limited transparency into the cost structure due to sole-source award.
Potential for missed opportunities to engage a broader range of service providers.

Positive Signals

Supports a non-profit organization with a social mission.
Provides stable, long-term funding for essential services.
Contract is firm-fixed-price, offering budget certainty.

Sector Analysis

The janitorial services sector is a mature and competitive market, often characterized by a mix of large facility management companies and smaller, specialized cleaning businesses. Government contracts for these services are common across various agencies, supporting facility maintenance and hygiene. While this contract was sole-sourced, the broader market typically sees significant competition, driving innovation and cost efficiencies. Benchmarking this contract's value would involve comparing its unit costs (e.g., cost per square foot) against industry standards and other government contracts for similar services.

Small Business Impact

The contract data indicates that small business participation was not a factor, as the contract was awarded sole-source and the 'sb' field is false. There is no indication of small business set-aside provisions or subcontracting requirements. This means the primary contractor, Goodwill Keystone Area, is not obligated to engage small businesses for subcontracting work under this specific award, potentially limiting opportunities for the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management structures. As a sole-source award, the justification for not competing would be subject to review. Transparency is limited due to the lack of competitive bidding. Accountability would be managed through performance metrics and contract administration, ensuring the services meet the specified standards. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Facilities Maintenance Contracts
Government Janitorial and Custodial Services
Non-Profit Organization Service Contracts
Sole-Source Federal Procurements

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency into contractor's cost structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.7 million to GOODWILL KEYSTONE AREA. CUSTODIAL - LABOR (BASE)

Who is the contractor on this award?

The obligated recipient is GOODWILL KEYSTONE AREA.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $13.7 million.

What is the period of performance?

Start: 2006-02-28. End: 2011-06-30.

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

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION' and awarded on a sole-source basis. Specific justifications for sole-source awards typically fall under exceptions to full and open competition, such as the availability of only one responsible source, or in certain cases, specific socio-economic program requirements. Without further documentation (e.g., Justification and Approval document), the precise reason remains unclear. However, given the award to Goodwill Keystone Area, a non-profit, it's possible the justification related to supporting a specific mission or organization deemed uniquely capable or aligned with agency goals, though this would still require formal documentation under federal acquisition regulations.

How does the $13.7 million contract value compare to industry benchmarks for janitorial services?

Directly comparing the $13.7 million total contract value to industry benchmarks is difficult without knowing the specific scope of services, square footage cleaned, frequency of service, and geographic location. However, for context, large-scale janitorial contracts for federal facilities can range from hundreds of thousands to millions of dollars annually, depending on size and complexity. The value suggests a substantial facility or set of facilities requiring comprehensive cleaning services over a multi-year period. To assess value for money, one would need to analyze the cost per square foot or per labor hour against similar government contracts or private sector contracts in the same region, adjusted for service levels.

What are the potential risks associated with awarding a contract of this magnitude without competition?

The primary risk of awarding a contract without competition is the potential for paying a higher price than would be achieved through a competitive bidding process. Without competing offers, there is less pressure on the contractor to offer the most cost-effective solution. Additionally, a sole-source award limits opportunities for other qualified vendors, potentially stifling innovation and reducing the pool of available contractors for future needs. There's also a risk that the government may not be aware of more efficient or specialized service providers that could offer better value or performance.

What is the track record of Goodwill Keystone Area in performing federal contracts?

The provided data focuses on this specific contract and does not offer insight into Goodwill Keystone Area's broader track record with federal contracts. However, as a non-profit organization, Goodwill entities often engage in government contracts, particularly those related to services like custodial work, packaging, and administrative support, often leveraging their social mission. To assess their track record, one would need to examine past performance reviews, contract completion history, and any reported issues or successes on other federal awards they may have held.

What is the historical spending pattern for janitorial services by the Department of the Army?

The provided data only includes details for this single contract (2006-2011). To understand historical spending patterns for janitorial services by the Department of the Army, a broader analysis of federal procurement databases (like FPDS or USASpending) would be necessary. This would involve filtering for contracts with the relevant NAICS code (561720 - Janitorial Services) awarded by the Department of the Army over multiple fiscal years. Such an analysis would reveal trends in contract values, number of awards, types of contractors (e.g., large business, small business, non-profit), and competition levels over time.

How does the firm-fixed-price contract type impact the government's financial risk?

A firm-fixed-price (FFP) contract type generally places the majority of the financial risk on the contractor. Under an FFP agreement, the price is set and not subject to adjustment based on the contractor's actual costs. This means the contractor is responsible for managing their expenses to remain profitable. For the government, this offers budget certainty, as the total cost is known upfront. The risk for the government is primarily related to ensuring the contractor can deliver the required quality and scope of services at the agreed-upon price, and that the initial price negotiated was fair and reasonable, especially in a sole-source situation.

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: W911N206R0013

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1150 GOODWILL DR, HARRISBURG, PA, 10

Business Categories: AbilityOne Program Participant, Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,922,959

Exercised Options: $13,724,692

Current Obligation: $13,718,774

Contract Characteristics

Cost or Pricing Data: NO

Timeline