Department of the Army awards $635M contract for facilities operations support services to Pyramid Services, Inc

Contract Overview

Contract Amount: $63,493,607 ($63.5M)

Contractor: Pyramid Services, Inc

Awarding Agency: Department of Defense

Start Date: 1996-07-05

End Date: 2008-08-29

Contract Duration: 4,438 days

Daily Burn Rate: $14.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: 200510!500808!2100!W9124R!ACA, YUMA PROVING GROUND !DAAD0196C0019 !A!N! !Y! !P00135!20050705!20050930!615057577!615057577!615057577!N!PYRAMID SERVICES INC !115 S FLORIDA AVE !ALAMOGORDO !NM!88310!85540!027!04!YUMA !YUMA !ARIZONA !+000000650000!N!N!000000000000!S216!FACILITIES OPERATIONS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !3! ! !C! ! !20200930!B! ! !A! !A!N!R!2!008!K! !C!N!Z! ! !N!B!Y!N! ! !C! !B!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: YUMA, YUMA County, ARIZONA, 85365

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $63.5 million to PYRAMID SERVICES, INC for work described as: 200510!500808!2100!W9124R!ACA, YUMA PROVING GROUND !DAAD0196C0019 !A!N! !Y! !P00135!20050705!20050930!615057577!615057577!615057577!N!PYRAMID SERVICES INC !115 S FLORIDA AVE !ALAMOGORDO !NM!88310!85540!027!04!YUMA !YUMA… Key points: 1. Contract value of $635M over its period of performance indicates a significant investment in facilities maintenance. 2. The contract was awarded under full and open competition, suggesting a robust bidding process. 3. The 'Cost Plus Award Fee' pricing structure can incentivize contractor performance but may lead to cost overruns if not managed carefully. 4. The duration of the contract (over 12 years) suggests a long-term need for these services. 5. The North American Industry Classification System (NAICS) code 561210 points to a specialized service sector. 6. The contract's geographic focus on Yuma Proving Ground, Arizona, highlights specific operational needs in that region.

Value Assessment

Rating: fair

The contract value of $635,057,577 over approximately 12 years for facilities operations support services at Yuma Proving Ground appears substantial. Benchmarking this against similar large-scale facilities support contracts is challenging without more specific service details and geographic comparisons. The 'Cost Plus Award Fee' structure, while allowing for performance incentives, carries inherent risks of cost escalation if performance targets are not met or if the fee structure is overly generous. The contract's duration suggests a stable, long-term requirement, but the overall value-for-money assessment would benefit from a detailed breakdown of services rendered and comparison to industry standards for similar scope and complexity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was open, certain sources were excluded prior to the solicitation. The presence of 8 bidders suggests a competitive environment, which typically aids in price discovery and can lead to more favorable pricing for the government. However, the exclusion of specific sources warrants further investigation to understand its potential impact on the breadth of competition and the final award price.

Taxpayer Impact: The broad competition among 8 bidders is generally positive for taxpayers, as it increases the likelihood of receiving competitive pricing. The exclusion of certain sources, however, could potentially limit the most competitive offers from reaching the government.

Public Impact

The primary beneficiaries are the Department of the Army and personnel at Yuma Proving Ground, Arizona, who receive essential facilities operations and maintenance. Services delivered include a wide range of facilities support, ensuring the operational readiness and safety of the installation. The geographic impact is concentrated at Yuma Proving Ground, Arizona, supporting a key military testing and training facility. Workforce implications include the potential for significant employment opportunities, both directly by the contractor and indirectly through subcontractors, within the facilities services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost Plus Award Fee' structure requires careful monitoring to ensure costs remain within reasonable bounds and that award fees are justified by performance.
The exclusion of certain sources in a 'full and open' competition needs scrutiny to ensure it did not unduly restrict competition.
The long contract duration (over 12 years) necessitates robust contract management to adapt to changing needs and maintain value.
The specific services covered under 'Facilities Operations Support Services' are broad and require detailed performance metrics for effective oversight.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
The contract has a defined period of performance with specific start and end dates, allowing for structured management.
The inclusion of award fees incentivizes contractor performance and potentially higher quality service delivery.
The contractor, Pyramid Services Inc., has secured a significant contract, suggesting a level of established capability.

Sector Analysis

Facilities Operations Support Services fall under the broader facilities management and support services industry. This sector is characterized by a mix of large, established players and smaller, specialized firms. Government contracts for these services are substantial, driven by the need to maintain extensive real property assets across various agencies. The market size for government facilities support is significant, with agencies like the Department of Defense being major consumers. This contract represents a substantial portion of spending within this niche for the specific geographic location of Yuma Proving Ground.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'N' for small business status. The large contract value and scope suggest that subcontracting opportunities may exist for small businesses, particularly in specialized trades or support functions. However, the primary awardee is Pyramid Services, Inc., which is not explicitly identified as a small business in the provided data. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices at Yuma Proving Ground. The 'Cost Plus Award Fee' structure necessitates close monitoring of costs and performance metrics to ensure that award fees are earned appropriately. Transparency is facilitated by contract award data, but detailed performance reports and audits would be crucial for full accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Base Operations Support Services
Facilities Maintenance Contracts
Logistics and Support Services
Government Property Management
Installation Support Contracts

Risk Flags

Cost Plus Award Fee structure requires diligent oversight.
Potential for cost overruns inherent in CPFF contracts.
Exclusion of sources in 'full and open' competition warrants review.
Long contract duration necessitates adaptive management.
Performance metrics for award fee must be clearly defined and measurable.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.5 million to PYRAMID SERVICES, INC. 200510!500808!2100!W9124R!ACA, YUMA PROVING GROUND !DAAD0196C0019 !A!N! !Y! !P00135!20050705!20050930!615057577!615057577!615057577!N!PYRAMID SERVICES INC !115 S FLORIDA AVE !ALAMOGORDO !NM!88310!85540!027!04!YUMA !YUMA !ARIZONA !+000000650000!N!N!000000000000!S216!FACILITIES OPERATIONS SUPPORT SERVICES !S1 !SERVICES !000 !* !561210!E! !3! ! !C! ! !202

Who is the contractor on this award?

The obligated recipient is PYRAMID SERVICES, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $63.5 million.

What is the period of performance?

Start: 1996-07-05. End: 2008-08-29.

What is the historical spending pattern for facilities operations support services at Yuma Proving Ground?

Analyzing historical spending for facilities operations support services at Yuma Proving Ground requires access to historical contract data for this specific installation. Without that granular data, it's difficult to provide a precise pattern. However, contracts of this nature, especially for major proving grounds, typically involve consistent, long-term funding to ensure operational readiness. The duration of this contract (over 12 years) suggests a stable, ongoing requirement. Previous contracts might have been smaller in scope, awarded to different vendors, or structured differently (e.g., fixed-price vs. cost-plus). A trend analysis would ideally show whether spending has increased, decreased, or remained relatively stable over time, potentially correlating with changes in military needs, infrastructure upgrades, or shifts in contracting strategies.

How does the per-unit cost of services compare to industry benchmarks for similar facilities?

Determining a precise per-unit cost benchmark for this contract is challenging without a detailed breakdown of the specific services provided and their associated quantities. The contract covers a broad range of 'Facilities Operations Support Services' under a 'Cost Plus Award Fee' structure. To establish a benchmark, one would need to identify comparable metrics such as cost per square foot for facility maintenance, cost per service call for repairs, or cost per man-hour for specialized labor, adjusted for geographic location (Arizona) and the specific type of facility (military proving ground). Industry benchmarks for commercial facilities might not directly translate due to the unique security, operational, and regulatory requirements of a military installation. A thorough analysis would involve comparing the contractor's proposed labor rates, overhead, and fee structure against market data for similar government or large-scale commercial contracts.

What is Pyramid Services, Inc.'s track record with similar government contracts?

Pyramid Services, Inc. has a track record of securing and performing on government contracts, as evidenced by this significant award. To assess their track record thoroughly, one would need to examine their past performance on contracts of similar size, scope, and complexity, particularly those involving facilities operations support for military installations. Key indicators include past performance ratings (if available), contract modifications history (indicating potential issues or scope changes), and any history of disputes or contract terminations. A review of their contract portfolio would reveal if they have experience with 'Cost Plus Award Fee' contracts and their success in managing such arrangements. Understanding their performance on previous Department of Defense or Army contracts would be particularly relevant.

What are the primary risks associated with a 'Cost Plus Award Fee' contract of this magnitude?

The primary risks associated with a 'Cost Plus Award Fee' (CPFF) contract of this magnitude ($635M) revolve around cost control and performance management. For the government, the main risk is potential cost overrun, as the contractor is reimbursed for allowable costs plus a fee that is earned based on performance. If performance targets are not clearly defined, measurable, or if the fee structure is too generous, costs can escalate beyond initial projections. There's also a risk that the contractor may focus on maximizing allowable costs rather than achieving optimal efficiency. For the contractor, the risk lies in not meeting the performance criteria required to earn the full award fee, potentially impacting profitability. Effective oversight, clear performance metrics, and robust negotiation of the fee structure are critical to mitigating these risks.

How does the competition level (8 bidders) impact the government's ability to achieve best value?

A competition involving 8 bidders generally enhances the government's ability to achieve best value. A larger pool of bidders typically leads to more competitive pricing and a wider range of technical approaches, increasing the likelihood that the government will receive proposals that offer a strong balance of cost and performance. With more vendors vying for the contract, each bidder has a greater incentive to offer their most competitive terms and innovative solutions to win the award. This level of competition can also provide the government with more leverage during negotiations and a better understanding of the market's capabilities and pricing. However, the 'best value' determination also depends on the evaluation criteria used and how effectively the government assesses non-price factors alongside cost.

What is the significance of the NAICS code 561210 (Facilities Support Services) in the context of this contract?

The North American Industry Classification System (NAICS) code 561210, 'Facilities Support Services,' is significant because it categorizes the primary business activity for which this contract was awarded. This code encompasses establishments that provide a wide range of support services to other businesses and organizations, such as building maintenance, cleaning, security, and other operational support. For this contract, it signifies that the Department of the Army requires comprehensive services to ensure the smooth and efficient operation of facilities at Yuma Proving Ground. This classification helps in understanding the market landscape, identifying potential competitors, and benchmarking contract values against others within the same industry sector.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 8

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 115 S FLORIDA AVE, ALAMOGORDO, NM, 02

Business Categories: Category Business, Small Business, Woman Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline