State Department's $14M Facilities Management Contract Awarded to PACARCTIC, LLC Faces Scrutiny Over Competition

Contract Overview

Contract Amount: $13,986,866 ($14.0M)

Contractor: Pacarctic, LLC

Awarding Agency: Department of State

Start Date: 2018-11-01

End Date: 2026-08-31

Contract Duration: 2,860 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FACILITIES MANAGEMENT ESOC-W

Place of Performance

Location: DENVER, JEFFERSON County, COLORADO, 80225

State: Colorado Government Spending

Plain-Language Summary

Department of State obligated $14.0 million to PACARCTIC, LLC for work described as: FACILITIES MANAGEMENT ESOC-W Key points: 1. The contract's value, while significant, requires benchmarking against similar facilities support services to determine true value for money. 2. The sole-source nature of this award limits competitive dynamics, potentially impacting price discovery and cost efficiency. 3. Key risk indicators include the lack of open competition and the need for robust performance monitoring to ensure service quality. 4. This contract supports essential facilities operations, providing a performance context for ongoing service delivery. 5. Positioned within the facilities support services sector, this award reflects a critical need for operational continuity. 6. The firm-fixed-price structure aims to control costs, but the absence of competition warrants careful oversight.

Value Assessment

Rating: fair

The contract's total value of approximately $14 million over its period of performance (2018-2026) needs to be assessed against industry benchmarks for facilities support services. Without comparable contract data or detailed service breakdowns, it is difficult to definitively assess value for money. The firm-fixed-price type suggests an attempt to cap costs, but the lack of competition means there's no direct market comparison to gauge pricing fairness. Further analysis of the specific services rendered and their associated costs would be necessary for a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required services, often due to unique capabilities, existing infrastructure, or urgent needs. The absence of a competitive bidding process means that the government did not benefit from the price reductions and service innovations that typically arise from a competitive environment. This limits the opportunity for price discovery and may result in higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the most cost-effective outcome. Without competition, the potential for overpayment exists, and the government must rely heavily on negotiation and oversight to ensure fair pricing and adequate service delivery.

Public Impact

The primary beneficiaries are the Department of State personnel and facilities at the specified locations, who receive essential support services. Services delivered include facilities support, ensuring operational continuity and a safe working environment. The geographic impact is concentrated within the areas served by the Department of State facilities managed under this contract. Workforce implications may include the direct employment of personnel by PACARCTIC, LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpricing and reduced value for taxpayer funds.
Sole-source awards can limit innovation and service improvement opportunities that might arise from a competitive market.
Performance monitoring is critical to ensure the contractor meets all service level agreements without competitive pressure.
The long duration of the contract (2018-2026) necessitates ongoing review to adapt to changing needs and market conditions.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, assuming the scope of work is well-defined.
Awarding to a single contractor can ensure continuity of essential services, especially if specialized knowledge is required.
The contract specifies a defined period of performance, allowing for future re-evaluation and potential competition.
The Department of State is the contracting agency, implying a level of established oversight for its operational needs.

Sector Analysis

The facilities support services sector is a broad category encompassing a wide range of services essential for the operation and maintenance of buildings and infrastructure. This includes maintenance, repair, cleaning, security, and administrative support. The market is characterized by a mix of large, diversified service providers and smaller, specialized firms. Government contracts in this sector are substantial, reflecting the extensive real estate holdings and operational needs of federal agencies. Benchmarking this contract's value against the overall federal spending on facilities management, which runs into billions annually, would provide a broader context.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. Consequently, there are no direct subcontracting implications for small businesses mandated by this specific award. The absence of a small business focus means that opportunities for small business participation are not explicitly structured into this contract, potentially limiting their access to this particular segment of federal contracting.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of State's contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving payments. Transparency is facilitated through contract databases like FPDS, which provide basic award information. However, the extent of public transparency regarding performance metrics and detailed cost breakdowns may vary. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Federal Facilities Management Services
Department of State Operations Support
Government Building Maintenance Contracts
Professional, Scientific, and Technical Services Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for uncompetitive pricing due to lack of competition.
Long contract duration may not reflect evolving needs or technology.
Need for robust performance monitoring due to sole-source nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $14.0 million to PACARCTIC, LLC. FACILITIES MANAGEMENT ESOC-W

Who is the contractor on this award?

The obligated recipient is PACARCTIC, LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $14.0 million.

What is the period of performance?

Start: 2018-11-01. End: 2026-08-31.

What is the specific scope of services included in this facilities management contract?

The provided data indicates the contract is for 'FACILITIES MANAGEMENT ESOC-W' and falls under the North American Industry Classification System (NAICS) code 561210, which covers Facilities Support Services. While the exact details of the scope of work are not fully elaborated in the abbreviated data, typical services under this category include building operations and maintenance, groundskeeping, custodial services, security, mailroom operations, and potentially administrative support related to facility management. The 'ESOC-W' designation might refer to a specific operational center or region within the Department of State. A comprehensive understanding would require reviewing the full contract statement of work.

How does the awarded price compare to similar facilities management contracts awarded by the Department of State or other agencies?

Direct comparison of the awarded price ($13,986,865.78) to similar contracts is challenging without more specific data points. The contract is for facilities support services (NAICS 561210) and has a firm-fixed-price structure. To conduct a meaningful comparison, one would need to identify contracts with similar scopes of work, geographic locations, contract durations, and service levels. Factors such as the size and complexity of the facilities managed, the specific services included (e.g., HVAC maintenance, janitorial, security, landscaping), and the prevailing labor rates in the contract's performance area are crucial. Benchmarking against contracts awarded around the same time period would also be important to account for inflation and market fluctuations. Without this granular data, assessing whether the price represents good value for money is speculative.

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

Awarding a contract on a sole-source basis carries several potential risks. Primarily, it eliminates the competitive pressure that typically drives down prices and encourages innovation. This can lead to the government paying more than it would in a competitive scenario. There's also a risk that the contractor may not be as motivated to provide the highest quality service or to seek efficiencies, as there is no immediate threat of losing the business to a competitor. Furthermore, sole-source awards can sometimes indicate a lack of market research or planning, or potentially favor incumbent contractors without a thorough evaluation of alternatives. Robust oversight and performance management become even more critical in sole-source situations to mitigate these risks and ensure the government receives fair value and adequate service.

What is the track record of PACARCTIC, LLC in performing federal contracts, particularly in facilities management?

Information on PACARCTIC, LLC's track record with federal contracts, especially in facilities management, is not detailed in the provided data. To assess their performance history, one would typically examine past federal contract awards to the company, including their value, duration, and the agencies they served. Performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) would be crucial to understand their past successes and failures, timeliness of delivery, quality of work, and overall customer satisfaction. Without access to this historical performance data, it is difficult to gauge their reliability and expertise in fulfilling the requirements of this significant Department of State contract.

How does the duration of this contract (2018-2026) impact its overall value and risk profile?

The contract's duration of approximately eight years (from November 1, 2018, to August 31, 2026) is relatively long for a facilities management contract. A longer duration can offer stability and continuity of services, which can be beneficial for essential operations. It may also allow the contractor to achieve economies of scale and invest in specialized equipment or training, potentially leading to efficiencies. However, a long contract term also increases the risk of cost escalation due to inflation, changes in operational requirements, or technological advancements that could render current services less effective or more expensive than newer solutions. It also ties the government to a single provider for an extended period, reducing flexibility and the opportunity to benefit from market competition that might emerge over time. Regular reviews and potential modifications would be essential to manage these risks.

What are the implications of this contract being classified under NAICS code 561210 (Facilities Support Services)?

Classifying this contract under NAICS code 561210 signifies that the primary purpose of the contract is to provide a wide range of support services for the operation and maintenance of commercial and institutional facilities. This code encompasses services such as operating and maintaining buildings, grounds, and other facilities; providing security services; providing cleaning services; and performing routine repairs and maintenance. This classification helps in understanding the nature of the services expected, allows for comparison with other contracts within the same industry, and informs market analysis. It suggests that PACARCTIC, LLC is expected to manage the day-to-day operational needs of the Department of State's facilities, ensuring they are functional, safe, and well-maintained.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3800 CENTERPOINT DR STE 502, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,937,922

Exercised Options: $16,298,582

Current Obligation: $13,986,866

Actual Outlays: $3,986,921

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19AQMM18D0117

IDV Type: IDC

Timeline