VA awards $10.45M for employee transit benefits to Washington Metropolitan Area Transit Authority

Contract Overview

Contract Amount: $10,454,904 ($10.5M)

Contractor: Washington Metropolitan Area Transit Authority

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-01

End Date: 2026-12-31

Contract Duration: 1,370 days

Daily Burn Rate: $7.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EMPLOYEE TRANSIT BENEFITS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20420

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $10.5 million to WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY for work described as: EMPLOYEE TRANSIT BENEFITS Key points: 1. Contract awarded on a not-competed basis, raising questions about potential cost savings through competition. 2. The contract duration of 1370 days suggests a long-term need for these services. 3. The firm-fixed-price structure aims to provide cost certainty for the agency. 4. This contract supports employee welfare and potentially reduces individual commuting costs. 5. The geographic focus is on the District of Columbia, aligning with the transit authority's service area.

Value Assessment

Rating: fair

The contract value of $10.45 million over approximately 3.7 years results in an annual spend of roughly $2.8 million. Without comparable contracts for employee transit benefits, a direct value-for-money assessment is challenging. However, the lack of competition suggests that the VA may not have explored potentially lower-cost alternatives or negotiated the most favorable pricing. Benchmarking against similar employee benefit programs across federal agencies would be necessary for a more robust evaluation.

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 goods or services. The lack of competition means the VA did not benefit from the price discovery and innovation that typically occurs in a competitive bidding process. It is unclear if a justification for this sole-source award was documented.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, potentially leading to higher costs than if multiple vendors had bid on the contract.

Public Impact

Federal employees working for the Department of Veterans Affairs in the Washington D.C. area benefit from subsidized transit. The contract facilitates access to public transportation, potentially encouraging its use. The geographic impact is concentrated within the District of Columbia, where the transit authority operates. This initiative supports the federal government's broader goals of promoting sustainable transportation and employee well-being.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Absence of a competitive process limits transparency in pricing.
Potential for vendor lock-in due to sole-source award.

Positive Signals

Provides a valuable employee benefit, potentially improving morale and retention.
Supports sustainable transportation initiatives.
Long-term contract provides stability for service delivery.

Sector Analysis

This contract falls within the 'Other Urban Transit Systems' category, which encompasses services related to public transportation. The market for such services is often dominated by regional transit authorities and specialized transportation providers. The value of this contract is relatively modest within the broader federal spending landscape for transportation and employee benefits. Comparable spending benchmarks would typically involve analyzing other agencies' contracts for similar employee transit subsidies or partnerships with local transit providers.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss' and 'sb' being false. The primary contractor is a large transit authority. There is no direct indication of subcontracting opportunities for small businesses within this specific award, though the transit authority may engage small businesses in other capacities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Employee Transit Benefit Programs
Department of Veterans Affairs Employee Services
Washington Metropolitan Area Transit Authority Services

Risk Flags

Sole-source award lacks competition
Potential for uncompetitive pricing
Limited transparency in cost justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $10.5 million to WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY. EMPLOYEE TRANSIT BENEFITS

Who is the contractor on this award?

The obligated recipient is WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $10.5 million.

What is the period of performance?

Start: 2023-04-01. End: 2026-12-31.

What is the historical spending pattern for employee transit benefits by the Department of Veterans Affairs?

Analyzing historical spending for employee transit benefits by the Department of Veterans Affairs (VA) is crucial for understanding trends and identifying potential cost efficiencies. While specific historical data for this exact contract is not provided, federal agencies typically have ongoing programs to subsidize employee commuting costs, often through pre-tax benefits or direct subsidies for public transit. The VA, like other large federal employers, likely has a history of providing such benefits. Without access to the VA's detailed procurement history or budget allocations for employee welfare programs, it's difficult to provide precise figures. However, the current award of $10.45 million over approximately 3.7 years suggests an annual expenditure of around $2.8 million for this specific service. This figure should be compared against previous years' spending on similar benefits to discern any increases, decreases, or shifts in program scope. A consistent or increasing spend might indicate a stable or growing need, while a decrease could suggest program adjustments or cost-saving measures. Furthermore, examining past contract awards for transit benefits, even if with different providers or in different geographic locations, can reveal patterns in pricing and service scope.

How does the pricing of this contract compare to similar employee transit benefit contracts across federal agencies?

A direct comparison of the pricing for this $10.45 million contract with the Washington Metropolitan Area Transit Authority (WMATA) for employee transit benefits is challenging without access to a comprehensive database of similar federal contracts. The 'per-unit cost' is not easily definable here as it's a broad service contract rather than a product with a clear unit price. However, we can analyze the annual spend. The contract averages approximately $2.8 million per year. To benchmark this, one would need to identify other federal agencies that provide similar transit subsidies to their employees, particularly in major metropolitan areas with comparable public transit systems. Factors influencing price include the number of eligible employees, the level of subsidy provided (e.g., full fare coverage, partial subsidy), the administrative costs associated with managing the benefit, and the negotiated rates with the transit provider. Given that this contract was sole-sourced, there's a higher likelihood that the pricing may not be as competitive as it could be in a fully open market. A thorough benchmark would involve collecting data on annual per-employee transit benefit costs across various agencies and comparing the VA's expenditure relative to employee numbers and service scope.

What are the potential risks associated with a sole-source award for employee transit benefits?

The primary risk associated with a sole-source award for employee transit benefits is the potential for inflated costs due to the lack of competition. When a contract is not competed, the government loses the opportunity to leverage market forces to achieve the best possible price and terms. The selected vendor, in this case, WMATA, may not have had the incentive to offer the most cost-effective solution. This can lead to taxpayers bearing a higher financial burden than necessary. Another risk is the potential for reduced innovation; without competitive pressure, there may be less motivation for the contractor to explore more efficient service delivery methods or offer enhanced benefits. Furthermore, a sole-source award can sometimes indicate a lack of adequate market research or planning by the agency, raising questions about whether alternative, potentially more cost-effective solutions were overlooked. Finally, there's a risk of vendor lock-in, where the agency becomes dependent on a single provider, making it difficult and potentially costly to switch vendors in the future if performance or pricing becomes unsatisfactory.

What is the track record of the Washington Metropolitan Area Transit Authority (WMATA) as a federal contractor?

The provided data does not offer specific details on WMATA's track record as a federal contractor beyond this single award. However, WMATA is a well-established public transit agency serving the Washington D.C. metropolitan area. Its primary function is providing public transportation services, which aligns with the nature of this contract. As a large, regional entity, WMATA likely has extensive experience in managing complex operations, large workforces, and significant infrastructure. When evaluating its track record as a federal contractor, it would be important to look for past performance information on other government contracts, if any exist. This would include assessing their ability to meet contract requirements, deliver services on time, and manage costs effectively. Given its public service mandate, WMATA's focus is typically on service provision rather than profit maximization, which could be a factor in its pricing and performance. However, without specific contract performance data or reviews, a definitive assessment of its federal contracting track record remains limited to general knowledge of its operational capacity.

What are the implications of the firm-fixed-price contract type for this employee transit benefit?

The use of a Firm-Fixed-Price (FFP) contract type for employee transit benefits signifies that the agreed-upon price is not subject to adjustment based on the contractor's cost experience. This provides the Department of Veterans Affairs (VA) with significant cost certainty. The total liability for the government is established upfront, making budgeting and financial planning more predictable. For WMATA, the FFP structure means they assume the risk of cost overruns. If their operational costs increase beyond what was anticipated when the contract was negotiated, WMATA will absorb those additional expenses. Conversely, if their costs are lower than expected, WMATA benefits from a higher profit margin. This contract type is generally preferred by the government when the scope of work is well-defined and the risks are understood, as is often the case with established services like public transit provision. It incentivizes the contractor to manage its costs efficiently to maximize profit.

Industry Classification

NAICS: Transportation and Warehousing › Urban Transit Systems › Other Urban Transit Systems

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C10X23Q0062

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 600 5TH ST NW, WASHINGTON, DC, 20001

Business Categories: U.S. Government Authorities, Category Business, Government, U.S. National Government, Not Designated a Small Business, U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $13,237,164

Exercised Options: $10,454,904

Current Obligation: $10,454,904

Actual Outlays: $7,753,622

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline