Treasury's $10.5M temporary staffing contract with Kelly Services shows potential for cost savings

Contract Overview

Contract Amount: $10,482,074 ($10.5M)

Contractor: Kelly Services, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2005-10-01

End Date: 2007-03-31

Contract Duration: 546 days

Daily Burn Rate: $19.2K/day

Number of Offers Received: 16

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: SUPPORT SERVICES

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20814

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $10.5 million to KELLY SERVICES, INC. for work described as: SUPPORT SERVICES Key points: 1. Contract value suggests a significant need for external staffing support. 2. The duration of the contract indicates a long-term reliance on temporary services. 3. The use of Time and Materials pricing may lead to cost overruns if not managed carefully. 4. Benchmarking against similar contracts is crucial to assess value for money. 5. The number of offers received provides some insight into market interest. 6. The contract's performance context is essential for understanding its overall success.

Value Assessment

Rating: fair

The total award amount of $10,482,073.62 over approximately 1.5 years for temporary help services appears substantial. Without specific details on the number of personnel or hours provided, a direct per-unit cost comparison is difficult. However, the average annual spend is around $7 million, which is a considerable investment for staffing. Further analysis would require benchmarking against similar government contracts for temporary staffing to determine if the pricing is competitive and offers good value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The provided data does not specify the competition level for this contract. Understanding whether it was competed fully and openly, under a limited competition, or awarded sole-source is critical. If it was a full and open competition, the number of bidders would indicate the level of market interest and potential for competitive pricing. Limited competition might suggest specific requirements or fewer qualified vendors, while a sole-source award would raise questions about the justification and potential lack of competitive pressure.

Taxpayer Impact: The level of competition directly impacts taxpayer dollars. Robust competition generally leads to lower prices and better service quality, maximizing the value obtained. Limited or sole-source awards may result in higher costs for the government.

Public Impact

Federal agencies requiring specialized or surge staffing support benefit from this contract. The contract provides temporary personnel to fill critical roles within the Bureau of the Fiscal Service. The geographic impact is primarily within Maryland, where the contract was performed. The workforce implications include providing employment opportunities for individuals seeking temporary federal positions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep with Time and Materials pricing if not closely monitored.
Lack of transparency regarding the competition level makes it difficult to assess price discovery.
The significant award amount warrants scrutiny to ensure efficient use of taxpayer funds.

Positive Signals

The contract addresses a clear need for temporary staffing within the agency.
The duration suggests a stable, albeit temporary, source of support.
The award to a known entity like Kelly Services may indicate a level of established performance.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, specifically under temporary help services. This sector is vital for government operations, providing flexible workforce solutions. The market for temporary staffing services is competitive, with numerous large and small businesses offering these solutions. Government spending in this area often fluctuates based on agency needs, hiring freezes, or specific project requirements. Benchmarks for temporary staffing can vary widely based on skill sets and duration.

Small Business Impact

The data does not indicate if this contract included small business set-asides or subcontracting goals. Without this information, it's impossible to assess the impact on the small business ecosystem. Typically, government contracts aim to include opportunities for small businesses, either directly or through subcontracting. The absence of this information in the provided data limits the analysis of its contribution to small business utilization.

Oversight & Accountability

Oversight for this contract would typically be managed by the Bureau of the Fiscal Service contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. Transparency is enhanced through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Temporary Staffing Services
Professional and Technical Services
Bureau of the Fiscal Service Contracts
Department of the Treasury Procurement

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Lack of clarity on competition level hinders value assessment.
Need for detailed performance metrics to evaluate effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $10.5 million to KELLY SERVICES, INC.. SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is KELLY SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $10.5 million.

What is the period of performance?

Start: 2005-10-01. End: 2007-03-31.

What was the specific justification for using a Time and Materials (T&M) contract type for these temporary help services?

Time and Materials (T&M) contracts are typically used when the extent or duration of the work cannot be determined in advance, making it difficult to estimate costs accurately. For temporary staffing, a T&M contract might be chosen if the agency anticipates fluctuating needs in terms of the number of personnel required or the specific skill sets needed over the contract period. This allows flexibility to scale up or down. However, T&M contracts carry a higher risk of cost overruns for the government compared to fixed-price contracts, as the final cost is directly tied to the hours worked and materials used. Robust oversight, including labor hour tracking and rate verification, is crucial to manage costs effectively under a T&M arrangement.

How does the average hourly rate for this contract compare to market rates for similar temporary staffing services in Maryland?

To compare the average hourly rate, we would need to know the total hours billed and the total amount paid under the contract. Assuming the $10.5 million award was fully utilized over the contract's duration (546 days, approximately 1.5 years), we could estimate an average daily or hourly cost. However, without the actual hours worked, a precise comparison is impossible. Generally, government rates for temporary staffing can be competitive, but they often include administrative overhead and profit margins. Benchmarking against private sector staffing agencies in Maryland for comparable roles (e.g., administrative assistants, clerks, analysts) would be necessary. Factors like security clearance requirements, specialized skills, and the volume of positions filled would influence the comparison.

What was the level of competition for this contract, and how many bids were received?

The provided data indicates 'no' (16) offers were received, but it does not specify the contract type or the solicitation method (e.g., full and open, limited). If 16 offers were received under a full and open competition, it suggests a healthy level of market interest and competition, which is generally favorable for price discovery and value. If it was a limited competition, the number of bidders might be less indicative. A sole-source award, which is not suggested by the '16 offers' data point, would imply a lack of competition. Understanding the specific solicitation process is key to interpreting the competitive landscape and its implications for the final price and service quality.

What types of positions were filled under this temporary staffing contract?

The contract falls under the North American Industry Classification System (NAICS) code 561320, which is 'Temporary Help Services.' This broad category typically includes a wide range of positions, from administrative and clerical support (e.g., receptionists, data entry clerks, administrative assistants) to more specialized roles depending on agency needs. Given the contract is with the Bureau of the Fiscal Service, it's likely that positions filled included roles supporting financial operations, administrative functions, and potentially IT support or program management assistance. The 'Temporary Help Services' designation implies that the contractor, Kelly Services, provided employees to the government on a temporary basis, rather than direct hires.

What is the historical spending pattern for temporary help services by the Bureau of the Fiscal Service?

To determine historical spending patterns, one would need to analyze contract data for the Bureau of the Fiscal Service over several fiscal years, specifically looking for contracts under NAICS code 561320 (Temporary Help Services) or similar codes. This contract, awarded in 2005 and ending in 2007, represents a snapshot from that period. Analyzing subsequent contracts would reveal trends in spending, the number of contracts awarded, the average contract values, and the primary contractors utilized. Such an analysis could indicate whether reliance on temporary staffing has increased or decreased, and whether spending has remained consistent or shown significant fluctuations.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Employment Services › Temporary Help Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Contractor Details

Address: 999 WEST BIG BEAVER ROAD, TROY, MI, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,265,534

Exercised Options: $10,482,074

Current Obligation: $10,482,074

Contract Characteristics

Multi-Year Contract: Yes

Parent Contract

Parent Award PIID: TPD03C0003

IDV Type: IDC

Timeline