VA awards $1.86M laundry services contract to Wiregrass Rehabilitation Center Inc. in Tennessee

Contract Overview

Contract Amount: $1,855,470 ($1.9M)

Contractor: Wiregrass Rehabilitation Center Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-11-08

End Date: 2026-05-31

Contract Duration: 569 days

Daily Burn Rate: $3.3K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LAUNDRY & LINEN SERVICES

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38104

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.9 million to WIREGRASS REHABILITATION CENTER INC for work described as: LAUNDRY & LINEN SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings through competition. 2. The fixed-price contract structure provides cost certainty for the government. 3. Performance period extends over 569 days, indicating a medium-term service requirement. 4. The North American Industry Classification System (NAICS) code 812320 points to a specialized service sector. 5. Awardee, Wiregrass Rehabilitation Center Inc., is a single entity for this procurement. 6. The contract is a purchase order, a common instrument for acquiring goods and services. 7. Service is to be performed in Tennessee, indicating a regional focus for the VA's needs.

Value Assessment

Rating: fair

Benchmarking the value of this $1.86 million contract for laundry and linen services is challenging without comparable sole-source awards or detailed cost breakdowns. The fixed-price nature suggests a defined scope, but the absence of competition limits the ability to assess if the pricing is optimal or if taxpayers received the best possible value. Further analysis would require understanding the specific service levels and the market rates for similar services in the region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP), indicating it was awarded on a sole-source basis. This means only one vendor was solicited and awarded the contract. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the most cost-effective solution. It suggests either a specific capability requirement or a potential oversight in exploring competitive options.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to offer the lowest price. This limits the government's ability to secure the best value for public funds.

Public Impact

Veterans receiving care at the Wiregrass Rehabilitation Center will benefit from clean and sanitary laundry services. The contract ensures the availability of essential laundry and linen services for the facility. The geographic impact is localized to Tennessee, where the Wiregrass Rehabilitation Center is located. The contract supports the operational needs of the Department of Veterans Affairs healthcare facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source award raises questions about market research and alternative sourcing.
Limited transparency into the cost justification for a sole-source procurement.

Positive Signals

Fixed-price contract provides budget certainty.
Award to an established entity suggests potential for reliable service delivery.
Contract duration indicates a stable, ongoing need for these services.

Sector Analysis

The laundry and linen services sector is a critical component of the healthcare and hospitality industries, ensuring hygiene and operational efficiency. While not a high-technology sector, it requires specialized equipment and processes. The market size for such services is substantial, driven by demand from hospitals, hotels, and other institutions. This contract represents a specific instance of federal procurement within this essential service industry, supporting the operational needs of a government agency.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a small business set-aside component. There is no explicit information regarding subcontracting plans for small businesses. The absence of small business considerations in this sole-source award means potential opportunities for small businesses in this sector are not being leveraged through this specific procurement.

Oversight & Accountability

As a purchase order, this contract falls under the general oversight of the Department of Veterans Affairs' procurement regulations. Accountability is primarily managed through the terms and conditions of the purchase order and the performance monitoring by the contracting officer. Transparency is limited due to the sole-source nature of the award, with detailed justifications typically not made public. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Veterans Affairs Healthcare Services
Federal Government Laundry and Drycleaning Services
Government Purchase Orders

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-optimal pricing due to lack of competition.
Limited transparency into the procurement process and cost analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.9 million to WIREGRASS REHABILITATION CENTER INC. LAUNDRY & LINEN SERVICES

Who is the contractor on this award?

The obligated recipient is WIREGRASS REHABILITATION CENTER INC.

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 $1.9 million.

What is the period of performance?

Start: 2024-11-08. End: 2026-05-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP,' which typically implies a sole-source justification. Common reasons for sole-source awards include unique capabilities of the vendor, urgent and compelling needs where competition is not feasible, or when only one responsible source exists. Without further documentation from the VA, the precise justification remains unknown. This lack of competition limits the ability to verify if alternative vendors could have met the requirement or if a more competitive approach could have yielded better pricing for the government.

How does the contract value of $1.86 million compare to typical spending on laundry services by the VA?

Comparing this $1.86 million contract value to typical VA spending on laundry services requires access to historical spending data across multiple facilities and contract types. The provided data is for a single purchase order with a duration of approximately 569 days (about 1.5 years). To establish a benchmark, one would need to analyze the average cost per facility, per veteran served, or per pound of laundry processed across similar VA medical centers. Given this is a sole-source award, it's difficult to definitively state if the price is competitive without market data. However, the total value suggests a significant operational requirement for laundry services at the Wiregrass Rehabilitation Center.

What are the potential risks associated with a sole-source award for essential services like laundry?

The primary risk associated with a sole-source award for essential services like laundry is the potential for inflated costs due to the absence of competitive bidding. Without competing offers, the government may pay a premium compared to what could be achieved in an open market. Additionally, there's a risk of vendor complacency, as the awarded contractor faces no direct competition for future contracts. This can sometimes lead to a decline in service quality or responsiveness over time. Furthermore, sole-source awards can limit innovation and the adoption of more efficient or cost-effective laundry technologies that might be introduced by competing firms.

What is the track record of Wiregrass Rehabilitation Center Inc. in providing services to the federal government?

The provided data identifies Wiregrass Rehabilitation Center Inc. as the awardee but does not offer details on their past performance or track record with the federal government or other clients. To assess their reliability and experience, a review of their contract history, past performance evaluations (if available in federal databases like SAM.gov), and any reported issues or successes would be necessary. Without this information, it's difficult to gauge their capabilities beyond the assumption that the VA selected them for this specific requirement.

What are the implications of the fixed-price contract type for this laundry service?

A Firm Fixed Price (FFP) contract type, as indicated for this award, means the price is set and not subject to adjustment based on the contractor's cost experience. This is generally advantageous for the government as it provides cost certainty and transfers most of the cost risk to the contractor. For laundry services, an FFP contract implies that Wiregrass Rehabilitation Center Inc. has estimated its costs for labor, utilities, supplies, and overhead, and has priced the contract accordingly. Any cost overruns incurred by the contractor will reduce their profit, while any cost savings will increase it. This structure incentivizes the contractor to manage their operations efficiently.

Industry Classification

NAICS: Other Services (except Public Administration) › Drycleaning and Laundry Services › Drycleaning and Laundry Services (except Coin-Operated)

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 795 ROSS CLARK CIR, DOTHAN, AL, 36303

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: $1,855,470

Exercised Options: $1,855,470

Current Obligation: $1,855,470

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline