DoD's $74M electrical inspection contract awarded without competition, raising value concerns

Contract Overview

Contract Amount: $74,106,615 ($74.1M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of Defense

Start Date: 2012-02-14

End Date: 2013-04-19

Contract Duration: 430 days

Daily Burn Rate: $172.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TASK 2 - INITIAL ELECTRICAL INSPECTIONS

Plain-Language Summary

Department of Defense obligated $74.1 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: TASK 2 - INITIAL ELECTRICAL INSPECTIONS Key points: 1. The contract was awarded on a firm-fixed-price basis, which typically offers cost certainty. 2. Lack of competition suggests potential for higher pricing than a competitive award might yield. 3. The contract duration was relatively short, spanning just over a year. 4. The North American Industry Classification System (NAICS) code indicates a focus on electrical contractors. 5. The specific task, 'INITIAL ELECTRICAL INSPECTIONS,' implies a one-time or initial assessment rather than ongoing services. 6. The absence of disclosed domestic awardees prevents a direct assessment of contractor experience or past performance. 7. The contract was awarded by the Department of the Army, a component of the Department of Defense.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of disclosed awardees and specific performance details. However, a $74 million price tag for initial electrical inspections, awarded without competition, warrants scrutiny. Without competitive bids, it's difficult to ascertain if the price reflects fair market value or if taxpayers received the best possible deal. The firm-fixed-price structure provides some cost control, but the absence of competitive pressure could have led to inflated costs compared to similar services procured through open bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' procurement method, indicating a sole-source or limited competition scenario. The specific reasons for not competing the award are not detailed in the provided data. Sole-source awards can sometimes be justified for specialized services or urgent needs, but they bypass the price discovery benefits inherent in open competition. The lack of multiple bidders means the government did not have the opportunity to evaluate a range of proposals and select the most cost-effective option.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from the cost-saving pressures that competition typically generates.

Public Impact

The primary beneficiaries of this contract are likely the awarded contractor(s) who received a significant federal award. The services delivered were initial electrical inspections, crucial for ensuring safety and compliance within Department of Defense facilities. The geographic impact is presumed to be domestic, given the 'DOMESTIC AWARDEES (UNDISCLOSED)' designation. Workforce implications would include employment for electricians, inspectors, and administrative staff involved in performing and managing the inspections.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competitive award.
Undisclosed awardees make it impossible to assess contractor track record and past performance.
The 'initial' nature of the inspections raises questions about whether follow-on work was anticipated and how it was handled.
The broad NAICS code for 'Electrical Contractors and Other Wiring Installation Contractors' lacks specificity regarding the exact services performed.

Positive Signals

The contract was awarded on a firm-fixed-price basis, providing cost certainty for the government.
The contract was for a defined period, suggesting a contained scope of work.
The Department of the Army is a major component of the DoD, indicating a significant need for such services.

Sector Analysis

The contract falls within the Construction and Engineering Services sector, specifically related to electrical contracting. The NAICS code 238210 covers establishments primarily engaged in installing and servicing electrical power, heating, and lighting equipment. The market for such services within the federal government is substantial, encompassing infrastructure maintenance, new construction, and specialized inspections across various agencies. While specific benchmarks for 'initial electrical inspections' are not readily available, general construction and electrical contractor spending by the DoD runs into billions annually.

Small Business Impact

The provided data indicates that small business participation was not a factor in this contract, as 'sb' is false and 'st' (small business type) is empty. There is no indication of small business set-aside provisions or subcontracting requirements. This suggests the contract was likely awarded to a large business or that subcontracting opportunities for small businesses were not explicitly mandated or tracked within this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is limited due to the sole-source nature and undisclosed awardees, making detailed public oversight challenging. Accountability would primarily rest with the contracting officer and program managers responsible for ensuring the contractor met the terms of the firm-fixed-price agreement.

Related Government Programs

Department of Defense Facilities Maintenance
Electrical Infrastructure Upgrades
Government Building Safety Inspections
Army Corps of Engineers Contracts
Federal Construction Services

Risk Flags

Sole-source award
Lack of transparency in awardee
Potential for overpricing due to lack of competition
Insufficient detail on scope of work

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.1 million to DOMESTIC AWARDEES (UNDISCLOSED). TASK 2 - INITIAL ELECTRICAL INSPECTIONS

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $74.1 million.

What is the period of performance?

Start: 2012-02-14. End: 2013-04-19.

What is the track record of the undisclosed contractor(s) for similar electrical inspection services?

The provided data does not disclose the identity of the awardee(s), making it impossible to assess their track record for similar electrical inspection services. Without knowing who performed the work, we cannot review their past performance history, client references, or any previous government audits or evaluations. This lack of transparency is a significant limitation in evaluating the contractor's reliability and expertise for this specific task. Future analysis would require identifying the awardee to investigate their performance history with the government or in the private sector.

How does the $74 million cost compare to similar electrical inspection contracts awarded competitively?

Direct comparison of the $74 million cost to competitively awarded contracts for 'initial electrical inspections' is difficult without knowing the scope, duration, and specific requirements of this contract, as well as the identity of the awardee. However, the fact that this contract was sole-sourced suggests it may not have achieved the cost efficiencies typically realized through competitive bidding. Generally, competitive processes drive down prices as multiple firms vie for the contract. If similar, comprehensive inspection services were procured competitively, the price per inspection or per facility might be lower than what was paid under this non-competed award, indicating potential value loss for taxpayers.

What are the primary risks associated with awarding a $74 million contract without competition?

The primary risks associated with awarding a $74 million contract without competition include: 1. **Higher Costs:** The government may pay more than necessary because there was no competitive pressure to offer the lowest price. 2. **Reduced Innovation:** Without competing proposals, the government might miss out on innovative solutions or efficiencies offered by other potential contractors. 3. **Lack of Accountability:** It can be harder to hold a contractor fully accountable when there isn't a clear benchmark from competing offers, potentially leading to complacency. 4. **Potential for Poor Performance:** While not guaranteed, the absence of a competitive vetting process could mean the selected contractor is less capable or experienced than others who might have bid.

What was the specific scope of 'initial electrical inspections' covered under this contract?

The provided data identifies the task as 'TASK 2 - INITIAL ELECTRICAL INSPECTIONS' under NAICS code 238210 (Electrical Contractors and Other Wiring Installation Contractors). However, the specific details of what constituted these 'initial' inspections are not elaborated upon. This could range from basic safety checks and code compliance assessments to more in-depth evaluations of electrical systems within specific facilities or across a portfolio of assets. The duration of the contract (430 days) suggests a substantial, though finite, scope of work rather than continuous, long-term maintenance.

What is the historical spending pattern for 'initial electrical inspections' by the Department of the Army?

The provided data represents a single contract award for 'TASK 2 - INITIAL ELECTRICAL INSPECTIONS' totaling $74.1 million, awarded in 2012 and ending in 2013. This data point alone does not provide sufficient information to establish a historical spending pattern. To understand historical spending, one would need to analyze multiple contracts for similar services over several fiscal years, looking at the total amount spent, the number of contracts awarded, the procurement methods used (competed vs. sole-source), and the average cost per contract or service. Without this broader context, it's impossible to determine if this $74 million expenditure is typical, an outlier, or indicative of a trend.

Were there any justifications provided for the sole-source award, such as urgency or unique capabilities?

The provided data indicates the contract was awarded under the 'NOT COMPETED' procurement type. However, it does not include the specific justification cited by the Department of the Army for not competing the award. Federal regulations (like the Federal Acquisition Regulation - FAR) outline specific circumstances under which sole-source contracts can be justified, such as when only one responsible source exists, or in cases of urgent and compelling need. Without access to the contract's justification and approval (J&A) document, we cannot determine the official reasoning behind bypassing the competitive process for this $74 million contract.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Electrical Contractors and Other Wiring Installation Contractors

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › INSPECTION SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W912DY12R0005

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $74,106,615

Exercised Options: $74,106,615

Current Obligation: $74,106,615

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline