GSA awards $3.37M contract for pipe replacement, raising questions about competition and value

Contract Overview

Contract Amount: $3,369,620 ($3.4M)

Contractor: Blue Spader Contractors Inc

Awarding Agency: General Services Administration

Start Date: 2024-07-23

End Date: 2025-12-22

Contract Duration: 517 days

Daily Burn Rate: $6.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: GALVANIZED PIPE REPLACEMENT, ROSA PARKS BUILDING, 985 MICHIGAN AVENUE, DETROIT, MICHIGAN.

Place of Performance

Location: DETROIT, WAYNE County, MICHIGAN, 48226

State: Michigan Government Spending

Plain-Language Summary

General Services Administration obligated $3.4 million to BLUE SPADER CONTRACTORS INC for work described as: GALVANIZED PIPE REPLACEMENT, ROSA PARKS BUILDING, 985 MICHIGAN AVENUE, DETROIT, MICHIGAN. Key points: 1. The contract's value appears high relative to its duration and scope. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. The firm-fixed-price structure shifts risk to the contractor, but oversight is crucial. 4. This project addresses essential infrastructure maintenance within a federal building. 5. The contractor's track record and past performance warrant closer examination. 6. The absence of a small business set-aside is noted.

Value Assessment

Rating: fair

The contract value of $3.37 million for a 517-day duration (approximately 1.4 years) for pipe replacement seems substantial. Benchmarking against similar federal projects for galvanized pipe replacement in public buildings of comparable size and complexity is needed to definitively assess value for money. Without more detailed project specifications and market data, it is difficult to ascertain if the pricing is competitive or if it represents a fair market value. The firm-fixed-price contract type suggests that the contractor bears the cost overruns, but the initial price needs scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition procurement. This approach bypasses the standard competitive bidding process, which typically involves soliciting proposals from multiple qualified vendors. The lack of open competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive environment. This procurement method requires strong justification to ensure it serves the government's best interest.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not secure the most economically advantageous offer. Without competitive pressure, the awarded price might be higher than what could have been achieved through an open bidding process.

Public Impact

Federal employees and visitors to the Rosa Parks Building in Detroit, Michigan, will benefit from improved plumbing infrastructure. The project ensures the continued operational integrity of a federal facility. The geographic impact is localized to Detroit, Michigan. The contract supports the construction and maintenance workforce, likely through the prime contractor and any subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may result in inflated costs for taxpayers.
The justification for a sole-source award needs thorough review to ensure necessity.
Potential for contractor to leverage sole-source status for less favorable terms if oversight is weak.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Project addresses critical infrastructure needs, ensuring facility functionality.
Contract award signifies a commitment to maintaining federal property.

Sector Analysis

This contract falls within the construction and maintenance sector, specifically focusing on plumbing and HVAC services for federal buildings. The General Services Administration (GSA) is a major procurer of such services to maintain its vast portfolio of government-owned and leased facilities. The market for specialized contractors capable of performing large-scale pipe replacement in occupied federal buildings is competitive, but procurement methods like sole-sourcing can limit access to the full range of market capabilities and pricing.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the 'sb' field is false and the contract was not set aside for small businesses. There is no explicit mention of subcontracting goals for small businesses. This suggests that opportunities for small businesses to participate in this specific project may be limited, potentially through direct subcontracting by the prime if they choose, rather than through a mandated set-aside.

Oversight & Accountability

Oversight for this contract will primarily fall under the General Services Administration (GSA), specifically the Public Buildings Service. As a firm-fixed-price contract, the GSA will monitor contractor performance against the defined scope of work and schedule. Transparency is dependent on the GSA's reporting practices and the public availability of contract details and performance evaluations. The Inspector General of the GSA would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this award.

Related Government Programs

Federal Building Maintenance Contracts
Public Infrastructure Repair
GSA Facility Management
Plumbing and HVAC Services
Sole-Source Federal Procurements

Risk Flags

Sole-source award requires strong justification.
Potential for inflated pricing due to lack of competition.
Contract duration and value warrant scrutiny for value-for-money.
Need to verify contractor's past performance on similar projects.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $3.4 million to BLUE SPADER CONTRACTORS INC. GALVANIZED PIPE REPLACEMENT, ROSA PARKS BUILDING, 985 MICHIGAN AVENUE, DETROIT, MICHIGAN.

Who is the contractor on this award?

The obligated recipient is BLUE SPADER CONTRACTORS INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $3.4 million.

What is the period of performance?

Start: 2024-07-23. End: 2025-12-22.

What is the track record of Blue Spader Contractors Inc. with federal contracts, particularly regarding performance and past disputes?

A thorough review of Blue Spader Contractors Inc.'s federal contract history is essential. This includes examining past performance evaluations, any reported contract disputes, claims, or litigation, and their history with similar types of projects (e.g., pipe replacement in large facilities). Data from sources like the Federal Procurement Data System (FPDS) and contract award databases can provide insights into their reliability, adherence to schedules and budgets, and overall quality of work on previous government engagements. Understanding their past performance is critical for assessing the risk associated with this current award, especially given the sole-source nature.

How does the awarded price of $3.37 million compare to similar pipe replacement projects in federal buildings of comparable size and complexity?

Benchmarking this contract's value against similar projects is crucial for assessing value for money. This involves identifying comparable federal or even large-scale commercial projects that involved galvanized pipe replacement in buildings of similar square footage and occupancy. Factors such as the age of the building, the extent of the pipe system requiring replacement, and the specific technical challenges involved (e.g., asbestos abatement, working within occupied spaces) must be considered. Without such a comparison, it's difficult to determine if the $3.37 million represents a fair market price or if it is potentially inflated due to the lack of competition.

What specific justification was provided for awarding this contract on a sole-source basis, and does it align with federal procurement regulations?

Federal procurement regulations (like the FAR) allow for sole-source awards under specific, limited circumstances, such as when only one responsible source can provide the required supply or service. The justification for this 'NOT AVAILABLE FOR COMPETITION' award must be documented and publicly accessible. It typically requires demonstrating that a competitive process is not feasible or not in the government's best interest. Analyzing this justification is key to understanding why open competition was bypassed and whether the rationale is sound and compliant with regulatory requirements.

What are the potential risks associated with a sole-source contract for infrastructure repair, and what mitigation strategies are in place?

Sole-source contracts carry inherent risks, including the potential for higher costs due to lack of competition, reduced incentive for contractor efficiency, and less innovation. For infrastructure repair, risks also include potential delays if unforeseen issues arise and the contractor is not adequately resourced or experienced. Mitigation strategies typically involve robust contract oversight by the procuring agency (GSA in this case), clear performance metrics, stringent quality control, and potentially incorporating incentive clauses or penalties. The firm-fixed-price nature helps mitigate cost overrun risk for the government, but careful monitoring of scope and schedule is still vital.

What is the historical spending pattern for pipe replacement and related services at the Rosa Parks Building or similar GSA facilities in Michigan?

Examining historical spending on pipe replacement and general maintenance at the Rosa Parks Building, or comparable GSA facilities in Michigan, can provide valuable context. This analysis would reveal the frequency of such projects, their typical costs, and the contractors previously engaged. Significant deviations from historical spending patterns, especially for a sole-source award, could signal potential issues with pricing or scope. Understanding past investments helps in evaluating the current contract's necessity, scale, and cost-effectiveness within a longer-term facility management perspective.

Are there any performance metrics or key performance indicators (KPIs) defined in the contract to measure the success of the pipe replacement project?

The effectiveness of the pipe replacement project hinges on clearly defined performance metrics and KPIs within the contract. These should go beyond simply completing the work and include measures related to the quality of installation, adherence to schedule, minimal disruption to building occupants, and long-term reliability of the new piping system. The firm-fixed-price structure implies a focus on delivering the specified outcome, but specific KPIs allow the GSA to objectively assess whether the contractor has met or exceeded expectations, ensuring the investment yields the desired operational benefits.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Plumbing, Heating, and Air-Conditioning Contractors

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 47PF0024R0053

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 332 S MAIN ST STE A, ROMEO, MI, 48065

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $3,369,620

Exercised Options: $3,369,620

Current Obligation: $3,369,620

Actual Outlays: $2,785,495

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline