DoD's $179M facilities maintenance contract with SourceAmerica awarded without competition, raising value concerns

Contract Overview

Contract Amount: $179,252,282 ($179.3M)

Contractor: Sourceamerica

Awarding Agency: Department of Defense

Start Date: 2011-09-08

End Date: 2016-07-31

Contract Duration: 1,788 days

Daily Burn Rate: $100.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FACILITIES MAINTENANCE

Place of Performance

Location: FORT KNOX, HARDIN County, KENTUCKY, 40121

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $179.3 million to SOURCEAMERICA for work described as: FACILITIES MAINTENANCE Key points: 1. The contract's value for money is questionable due to the lack of competitive bidding. 2. Competition dynamics were absent, as the contract was awarded on a sole-source basis. 3. Risk indicators include potential overpricing and limited market responsiveness due to non-competitive award. 4. Performance context shows a long duration (nearly 5 years) for facilities support services. 5. Sector positioning is within facilities support services, a critical but often commoditized area. 6. The contract's significant dollar value without competition warrants scrutiny of its necessity and pricing.

Value Assessment

Rating: questionable

Benchmarking the value of this $179 million contract is challenging without competitive bids. The absence of a competitive process means there's no direct comparison to market rates or other providers for similar facilities maintenance services. Without a bidding process, it's difficult to ascertain if the pricing reflects fair market value or if taxpayers received the best possible deal. The long duration of the contract further complicates value assessment over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning SourceAmerica was the only entity considered. The specific justification for this non-competitive award is not detailed here, but it bypasses the standard process of soliciting bids from multiple vendors. This significantly limits price discovery and the potential for innovation that often arises from a competitive environment.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings and improved service offerings that typically result from competitive bidding processes.

Public Impact

The Department of Defense benefits from the provision of facilities maintenance services. Services delivered include essential support for maintaining military facilities. The geographic impact is concentrated in Kentucky, where the contract was administered. Workforce implications are tied to the employment generated by SourceAmerica for these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source award limits opportunities for other capable vendors to secure government contracts.
Long contract duration without re-competition could reduce incentives for continuous improvement.

Positive Signals

SourceAmerica is a known entity for providing services, potentially ensuring continuity.
The contract addresses a critical need for facilities maintenance within the DoD.

Sector Analysis

Facilities support services represent a significant segment of the government contracting market, encompassing a wide range of activities from janitorial services to complex building maintenance. This contract falls within that broad category. Comparable spending benchmarks for facilities maintenance across federal agencies are substantial, often running into billions of dollars annually. The market typically sees a mix of large corporations and specialized service providers competing for these contracts.

Small Business Impact

While SourceAmerica is a non-profit organization that aims to create jobs for people with disabilities, this specific contract award was sole-source and does not appear to have a small business set-aside component. The implications for the broader small business ecosystem are minimal in terms of direct subcontracting opportunities stemming from this particular award, as the primary contract was not competed among small businesses.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Army's contracting officers and potentially the Defense Contract Audit Agency (DCAA) to ensure compliance and fair pricing. Accountability measures are inherent in contract terms and performance standards. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process more difficult.

Related Government Programs

Department of Defense Facilities Maintenance Contracts
Federal Facilities Support Services
SourceAmerica Contracts
Non-Competitive Federal Awards

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited transparency in procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $179.3 million to SOURCEAMERICA. FACILITIES MAINTENANCE

Who is the contractor on this award?

The obligated recipient is SOURCEAMERICA.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $179.3 million.

What is the period of performance?

Start: 2011-09-08. End: 2016-07-31.

What is SourceAmerica's track record with federal contracts, particularly with the Department of Defense?

SourceAmerica has a long-standing history of working with federal agencies, including the Department of Defense, primarily through its mandate to procure products and services from non-profit agencies that employ individuals with disabilities. Their track record involves fulfilling various service contracts, often leveraging a network of affiliated agencies. While specific performance metrics for this particular $179 million facilities maintenance contract are not detailed here, SourceAmerica's overall mission is to provide employment opportunities. Federal agencies often utilize SourceAmerica for services where a social mission is a key consideration, alongside service delivery. However, the sole-source nature of this award means that its performance is not benchmarked against a competitive field, making direct comparisons of efficiency or cost-effectiveness challenging.

How does the $179 million value of this contract compare to similar facilities maintenance contracts awarded by the DoD?

Comparing the $179 million value of this specific contract to similar facilities maintenance contracts awarded by the Department of Defense is difficult without knowing the exact scope, duration, and specific services included. Federal facilities maintenance contracts can vary widely in size and complexity. However, $179 million over approximately five years (based on the start and end dates) represents a substantial investment. Larger agencies like the DoD often award multi-billion dollar contracts for facilities management across numerous installations. This contract, while significant, might be considered moderate to large depending on the geographic coverage and the specific services (e.g., janitorial, groundskeeping, minor repairs vs. major infrastructure). The lack of competition for this award makes direct value-for-money comparisons with competitively bid contracts even more critical, as there's no market validation of the price.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a contract of this magnitude ($179 million) on a sole-source basis are significant. Firstly, there is a heightened risk of overpayment, as the government does not benefit from the price competition that typically drives down costs. Without multiple bids, the contractor has less incentive to offer the most competitive pricing. Secondly, there's a risk of suboptimal performance or innovation, as the absence of competition reduces the pressure on the contractor to continuously improve services or adopt new technologies. Thirdly, it can stifle market entry for other capable vendors who might offer better value or specialized expertise. Finally, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or a lack of due diligence.

What does the duration of this contract (nearly 5 years) imply about the nature of facilities maintenance services?

The duration of this contract, spanning nearly five years (from September 2011 to July 2016), suggests that the services provided are considered essential and require a stable, long-term provider. Facilities maintenance is an ongoing operational requirement for any large organization, especially a military branch like the Department of the Army. Long-term contracts are often used for services that are critical to day-to-day operations and where frequent vendor changes could be disruptive or inefficient. This duration allows the contractor to develop deep familiarity with the facilities and potentially achieve economies of scale. However, it also necessitates robust oversight to ensure performance remains high and pricing remains fair throughout the contract's life, especially when awarded non-competitively.

How does this contract fit into the broader landscape of federal spending on facilities support services?

This contract for $179 million fits within the substantial federal spending allocated to facilities support services annually. Agencies like the Department of Defense are major consumers of these services, which encompass a wide array of needs, including maintenance, repair, custodial, groundskeeping, and sometimes even energy management. Federal spending in this category often runs into the tens of billions of dollars across all agencies. Contracts can range from small, localized service agreements to massive, enterprise-wide solutions. This particular award, being a definitive contract for facilities maintenance, represents a significant portion of spending within its specific domain and geographic area (Kentucky), contributing to the overall federal expenditure on maintaining its vast real estate portfolio.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9124D11R0024

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8401 OLD COURTHOUSE RD STE 110, VIENNA, VA, 22182

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: $183,603,113

Exercised Options: $183,603,113

Current Obligation: $179,252,282

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Timeline