VA awards $2.1M elevator maintenance contract to KONE Inc. for Puget Sound Health Care System

Contract Overview

Contract Amount: $2,088,319 ($2.1M)

Contractor: Kone Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-01

End Date: 2027-03-31

Contract Duration: 1,460 days

Daily Burn Rate: $1.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ELEVATOR MAINTENANCE/INSPECTION FOR PUGET SOUND HEALTH CARE SYSTEM.

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98108

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.1 million to KONE INC for work described as: ELEVATOR MAINTENANCE/INSPECTION FOR PUGET SOUND HEALTH CARE SYSTEM. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1460 days (4 years) indicates a long-term need for elevator services. 3. The firm-fixed-price structure aims to provide cost certainty for the government. 4. This contract falls under Facilities Support Services, a common category for government operations. 5. The award amount of approximately $2.1 million over four years suggests a significant investment in facility upkeep.

Value Assessment

Rating: good

The contract value of $2,088,319.38 over approximately four years averages to about $522,000 annually. Without specific benchmarks for elevator maintenance in healthcare systems of this size, it's difficult to definitively assess value. However, the use of full and open competition implies that pricing was likely vetted against multiple offers, which generally supports fair market value. The firm-fixed-price type also helps control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The data indicates two bids were received (no: 2). A higher number of bidders typically suggests more robust competition, potentially leading to better pricing and service options for the government. With only two bids, the level of competition might be considered moderate.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and services, aiming to secure the contract. While two bids are present, further analysis would be needed to confirm if this level of competition sufficiently drove down costs.

Public Impact

Patients and staff at the Puget Sound Health Care System will benefit from reliable elevator functionality, crucial for patient care and accessibility. The contract ensures the continued operation and maintenance of essential vertical transportation systems within the VA facility. The primary geographic impact is within the Puget Sound region of Washington state. The contract supports jobs within the facilities maintenance and elevator service sectors, likely through KONE Inc.'s workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bids received could potentially lead to higher prices than a more robustly competed contract.
The firm-fixed-price contract might not fully account for unforeseen maintenance complexities, potentially leading to change orders if not carefully managed.

Positive Signals

Awarded through full and open competition, indicating an effort to maximize available vendor participation.
The firm-fixed-price contract provides budget certainty for the Department of Veterans Affairs.
The contract duration suggests a stable, long-term relationship for essential services, potentially leading to operational efficiencies.

Sector Analysis

Elevator maintenance and repair services fall under the broader Facilities Support Services sector. This sector is critical for the operational continuity of government buildings and infrastructure. The market includes specialized providers of maintenance, repair, and inspection for various building systems. Benchmarking this contract's value would require comparing it to similar service contracts for large healthcare facilities, considering factors like the number and type of elevators, service level agreements, and regional labor costs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses mandated by this specific award. The primary contractor, KONE Inc., is a large corporation, and it is unlikely that significant portions of this specific contract would be subcontracted to small businesses unless KONE has its own internal small business subcontracting program.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. The VA has an Office of Inspector General (OIG) that conducts audits and investigations into VA programs and contracts to ensure accountability and prevent fraud, waste, and abuse. Transparency is facilitated through public contract databases like FPDS.

Related Government Programs

Federal Buildings Maintenance Contracts
Healthcare Facility Operations Support
Department of Veterans Affairs Procurement
Facilities Support Services Contracts

Risk Flags

Potential for limited competition impacting price.
Risk of service disruptions affecting healthcare operations.
Firm-fixed-price contract may not cover all unforeseen repair complexities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.1 million to KONE INC. ELEVATOR MAINTENANCE/INSPECTION FOR PUGET SOUND HEALTH CARE SYSTEM.

Who is the contractor on this award?

The obligated recipient is KONE 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 $2.1 million.

What is the period of performance?

Start: 2023-04-01. End: 2027-03-31.

What is KONE Inc.'s track record with the federal government, particularly the Department of Veterans Affairs?

KONE Inc. has a history of receiving federal contracts, primarily for elevator and escalator maintenance and repair services. Analyzing their past performance with the VA and other federal agencies would involve reviewing contract databases for on-time delivery, quality of service, and any past disputes or performance issues. A review of their contract history might reveal patterns in contract values, durations, and the types of services provided. For instance, have they consistently met performance standards, or have there been recurring issues that might indicate a higher risk for this current contract? Understanding their broader federal footprint provides context for their capacity and reliability in fulfilling this Puget Sound Health Care System requirement.

How does the annual cost of this contract compare to similar elevator maintenance contracts for large healthcare facilities?

The annual cost for this contract is approximately $522,000 ($2,088,319.38 / 4 years). To benchmark this value, one would need to compare it against contracts for elevator maintenance at similarly sized healthcare facilities, ideally within the same geographic region to account for labor cost variations. Factors such as the number of elevators, their age and complexity, the scope of maintenance (preventive vs. corrective), response times, and included services (e.g., 24/7 emergency service) are critical. Without access to specific comparable contract data, it's challenging to definitively state if this price represents excellent, fair, or concerning value. However, the competitive bidding process suggests an attempt to achieve fair market value.

What are the primary risks associated with this elevator maintenance contract, and how are they mitigated?

Key risks include potential service disruptions due to equipment failure or inadequate maintenance, leading to impacts on patient care and facility operations. Another risk is cost overruns if the firm-fixed-price contract doesn't adequately cover unforeseen repair needs, potentially leading to change orders. Performance risk also exists if KONE Inc. fails to meet service level agreements. Mitigation strategies likely include robust performance monitoring by the VA, clear service level agreements (SLAs) within the contract, defined response times for emergencies, and potentially penalties for non-performance. The VA's oversight mechanisms and the potential for future contract actions based on performance also serve as risk mitigators.

How effective is the current elevator maintenance regime likely to be in ensuring patient safety and accessibility at the Puget Sound Health Care System?

The effectiveness hinges on the quality of KONE Inc.'s maintenance services and the VA's oversight. Regular, thorough preventive maintenance, as outlined in the contract, is crucial for minimizing breakdowns and ensuring elevators operate safely and reliably. This is vital for patient transport, staff movement, and supply delivery within a healthcare setting. The contract's firm-fixed-price nature, combined with the firm's obligation to perform, suggests a baseline level of expected service. However, true effectiveness is best measured by tracking elevator uptime, incident reports, and patient/staff feedback over the contract's duration. The VA's diligence in enforcing the contract's terms will be paramount.

What has been the historical spending trend for elevator maintenance services by the Department of Veterans Affairs?

Historical spending on elevator maintenance by the VA would likely show a consistent need for these services across its numerous facilities nationwide. Analyzing past VA spending patterns would reveal the total annual investment in maintaining vertical transportation systems, the average contract values, and the prevalence of different contract types (e.g., fixed-price, cost-plus) and competition levels. This data could indicate whether spending has been increasing, decreasing, or remaining stable, and whether the VA has historically relied on a few large contractors or a diverse pool of vendors. Understanding these trends provides context for the current $2.1 million award and helps assess its alignment with overall VA facility management strategies.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kone OYJ

Address: 1 KONE CT, MOLINE, IL, 61265

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $2,675,950

Exercised Options: $2,088,319

Current Obligation: $2,088,319

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QSHA22D002L

IDV Type: FSS

Timeline