IRS Headquarters Facility O&M Services Awarded to NVE, Inc. for $16.26 Million

Contract Overview

Contract Amount: $16,260,318 ($16.3M)

Contractor: NVE, Inc

Awarding Agency: Department of the Treasury

Start Date: 2022-04-01

End Date: 2027-03-31

Contract Duration: 1,825 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OPERATIONS AND MAINTENANCE (O & M) SERVICES FOR THE IRS HEADQUARTERS FACILITY LOCATED AT 1111 CONSTITUTION AVE, NORTHWEST, WASHINGTON, DC 20224

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20224

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $16.3 million to NVE, INC for work described as: OPERATIONS AND MAINTENANCE (O & M) SERVICES FOR THE IRS HEADQUARTERS FACILITY LOCATED AT 1111 CONSTITUTION AVE, NORTHWEST, WASHINGTON, DC 20224 Key points: 1. The contract value represents a significant investment in maintaining a critical federal facility. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The firm-fixed-price structure shifts cost risk to the contractor. 4. The contract duration of five years provides long-term operational stability. 5. The services are essential for the day-to-day functioning of the IRS headquarters. 6. The geographic concentration of the facility in Washington D.C. is a key factor.

Value Assessment

Rating: good

The contract value of $16.26 million over five years for O&M services at IRS headquarters appears reasonable given the scale and importance of the facility. Benchmarking against similar large-scale federal building maintenance contracts would provide a more precise value-for-money assessment. The firm-fixed-price contract type is generally favorable for the government in controlling costs, provided the initial pricing was competitive. The absence of specific performance metrics in the provided data makes a detailed assessment of service quality challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The number of bidders (3) is moderate, suggesting some level of competition, but not extensive. A higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government. The fact that three bids were received suggests that the market for these services is not overly concentrated.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it promotes a competitive environment that can drive down costs and improve service quality. While three bidders is a decent number, further analysis could explore if more potential bidders were aware of or capable of competing for this contract.

Public Impact

The primary beneficiaries are the employees of the Internal Revenue Service who rely on a functional and safe working environment at their headquarters. The contract ensures the continuous operation of essential building systems, including HVAC, electrical, plumbing, and security. The services directly impact the operational capacity of the IRS, a critical government agency. The geographic impact is localized to Washington D.C., where the IRS headquarters is situated. Workforce implications include the potential for direct employment by NVE, Inc. for facility maintenance staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial pricing did not adequately account for all operational complexities.
Risk of service disruptions if contractor performance falters despite the fixed-price structure.
Dependence on a single contractor for critical facility operations over a five-year period.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a potentially competitive pricing environment.
Long-term contract duration provides stability for essential facility services.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing a wide range of services necessary for the operation and maintenance of commercial and institutional buildings. The market for facility management is substantial, with significant government spending allocated to maintaining federal properties. This specific contract is for a high-profile, large-scale federal facility, representing a notable portion of spending within this niche. Comparable spending benchmarks would typically involve analyzing other large federal building O&M contracts.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside. This suggests that the contract was not specifically targeted towards small businesses. Consequently, the primary impact on the small business ecosystem would be through potential subcontracting opportunities, which are not detailed here. Without specific subcontracting plans, it's difficult to assess the direct benefit to small businesses from this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program officials within the IRS. Accountability measures are inherent in the firm-fixed-price contract, which obligates the contractor to deliver services at the agreed-upon price. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Federal Building Operations and Maintenance
Government Facilities Management
IRS Infrastructure Support
Department of the Treasury Facilities Contracts

Risk Flags

Potential for cost overruns if initial pricing was not competitive.
Risk of service quality degradation if contractor prioritizes profit over performance.
Dependence on a single contractor for critical facility operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.3 million to NVE, INC. OPERATIONS AND MAINTENANCE (O & M) SERVICES FOR THE IRS HEADQUARTERS FACILITY LOCATED AT 1111 CONSTITUTION AVE, NORTHWEST, WASHINGTON, DC 20224

Who is the contractor on this award?

The obligated recipient is NVE, INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $16.3 million.

What is the period of performance?

Start: 2022-04-01. End: 2027-03-31.

What is the historical spending pattern for IRS Headquarters facility operations and maintenance?

Analyzing historical spending for IRS Headquarters O&M services is crucial for understanding cost trends and identifying potential anomalies. Without specific historical data for this exact facility, we can look at broader IRS facilities spending or similar large federal building O&M contracts. Typically, such contracts see annual fluctuations due to inflation, service scope changes, and contract re-competition. A consistent upward trend might indicate increasing maintenance needs or rising market costs, while significant dips could suggest scope reductions or successful cost-saving measures. Understanding past spending helps in evaluating the current $16.26 million award for reasonableness and identifying if it aligns with or deviates from historical cost trajectories. For instance, if previous contracts for similar services were significantly lower, it would warrant a closer look at the current contract's pricing and scope.

How does the awarded price compare to market rates for similar facility operations and maintenance services in Washington D.C.?

Benchmarking the $16.26 million contract against market rates for similar facility operations and maintenance (O&M) services in Washington D.C. is essential for assessing value for money. This involves comparing the per-square-foot cost, the scope of services provided (e.g., HVAC, janitorial, security, landscaping), and the complexity of the facility (e.g., size, age, security requirements) against publicly available data or industry reports for commercial and government facilities in the region. Given that the IRS headquarters is a large, high-security federal building, its O&M costs are likely to be higher than average. However, a detailed analysis would involve obtaining data on comparable contracts awarded to other federal agencies or large private sector entities in the D.C. metropolitan area. If the awarded price falls within or below the typical range for such specialized services, it suggests competitive pricing. Conversely, if it significantly exceeds market benchmarks, it could indicate potential overpricing or a scope that includes services not commonly found in standard O&M contracts.

What are the key performance indicators (KPIs) used to evaluate NVE, Inc.'s performance under this contract?

The key performance indicators (KPIs) for this contract are critical for ensuring that NVE, Inc. delivers the required Operations and Maintenance (O&M) services effectively and efficiently. While not explicitly detailed in the provided summary, typical KPIs for such contracts often include response times for service requests (e.g., HVAC repair, plumbing issues), preventative maintenance completion rates, energy efficiency targets, janitorial service quality scores, and compliance with safety regulations. The contract likely includes a Performance Work Statement (PWS) that outlines these specific metrics and the acceptable performance thresholds. The government's ability to monitor and enforce these KPIs directly impacts the value received. Regular performance reviews, service level agreement (SLA) adherence, and customer satisfaction surveys are common mechanisms for tracking performance. Failure to meet these KPIs could result in contractually defined remedies, such as service credits or, in severe cases, termination.

What is the track record of NVE, Inc. in performing similar large-scale federal facility maintenance contracts?

Evaluating NVE, Inc.'s track record in performing similar large-scale federal facility maintenance contracts is vital for assessing their capability and reliability. A review of past performance, particularly on contracts with the IRS or other federal agencies, would reveal their experience with government procurement regulations, security protocols, and the specific demands of maintaining critical infrastructure. This includes examining past contract awards, performance evaluations (if publicly available), and any history of disputes or contract modifications. Companies with a proven history of successful contract execution, timely delivery, and adherence to quality standards are generally considered lower risk. Conversely, a history of performance issues, cost overruns, or significant contract disputes would raise concerns about their ability to meet the requirements of this IRS headquarters contract. Information from sources like the Contractor Performance Assessment Reporting System (CPARS) would be invaluable here.

What is the potential impact of the firm-fixed-price contract type on cost control and service quality?

The firm-fixed-price (FFP) contract type for the IRS Headquarters O&M services is designed to provide cost certainty for the government. Under an FFP agreement, NVE, Inc. is obligated to perform the specified work for a predetermined price, regardless of their actual costs. This structure incentivizes the contractor to manage their expenses efficiently and effectively to maximize profit. For taxpayers, this means the total cost of the contract is largely fixed, reducing the risk of unexpected cost increases. However, the FFP structure places a greater burden on the contractor to accurately estimate all potential costs upfront. If the contractor underestimates costs, they may be tempted to cut corners on service quality or labor to maintain profitability, potentially impacting the reliability and upkeep of the facility. Conversely, a well-priced FFP contract awarded after robust competition can yield significant savings. The government's role in closely monitoring performance against the contract's requirements is crucial to ensure that cost savings do not come at the expense of essential service quality.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 2032H821Q00020

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13800 COPPERMINE RD, HERNDON, VA, 20171

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $19,724,924

Exercised Options: $17,010,318

Current Obligation: $16,260,318

Actual Outlays: $12,552,506

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS06Q16BQDS115

IDV Type: IDC

Timeline