DoD's $41M contract for equipment maintenance and repair awarded to Johnson Controls Inc. shows potential value concerns

Contract Overview

Contract Amount: $41,055,492 ($41.1M)

Contractor: Johnson Controls, Inc

Awarding Agency: Department of Defense

Start Date: 2002-09-16

End Date: 2005-08-09

Contract Duration: 1,058 days

Daily Burn Rate: $38.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200212!001196!2100!AE30 !TACOM - PICATINNY !DAAE3002C1092 !A!N! !N! !20020916!20030416!050516509!006092860!006092860!N!JOHNSON CONTROLS INC !507 E MICHIGAN STREET !MILWAUKEE !WI!53201!10250!009!12!CAPE CANAVERAL !BREVARD !FLORIDA !+000000510609!N!N!000000000000!J066!MAINT & REPAIR OF EQ/INSTRUMENTS & LAB EQUIPMENT !C9E!ALL OTHER SUPPLIES AND EQUIPME!1000!NOT DISCERNABLE OR CLASSIFIED !812990!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!003!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: CAPE CANAVERAL, BREVARD County, FLORIDA, 32920, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $41.1 million to JOHNSON CONTROLS, INC for work described as: 200212!001196!2100!AE30 !TACOM - PICATINNY !DAAE3002C1092 !A!N! !N! !20020916!20030416!050516509!006092860!006092860!N!JOHNSON CONTROLS INC !507 E MICHIGAN STREET !MILWAUKEE !WI!53201!10250!009!12!CAPE CANAVERAL !BREVARD !FLORIDA !+000000510609!N!N!000000000000!J066!MAINT & REPAI… Key points: 1. The contract's value appears high relative to its duration and scope, warranting further investigation into cost-effectiveness. 2. Limited public data makes it challenging to benchmark pricing against similar maintenance and repair services. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The duration of the contract (over 2 years) for maintenance and repair services raises questions about long-term cost efficiency. 5. The specific nature of the equipment being maintained is not detailed, hindering a precise assessment of the service's criticality. 6. The contractor, Johnson Controls Inc., has a broad portfolio, but specific performance on this type of government contract requires deeper analysis.

Value Assessment

Rating: questionable

The total contract value of $41,055,492 over approximately 35 months (1058 days) averages to roughly $1.17 million per month. Without specific details on the scope of 'Maintenance & Repair of Equipment/Instruments & Lab Equipment,' it's difficult to definitively benchmark. However, this monthly expenditure seems substantial for maintenance services alone. Comparing it to other government contracts for similar broad categories of equipment maintenance would be necessary for a more precise value assessment. The lack of detailed service descriptions or performance metrics in the provided data limits a thorough value-for-money analysis.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. The data shows 3 bids were received. While this suggests a competitive process, the number of bidders (3) is on the lower side for a contract of this magnitude, which could imply that the market for this specific service might be limited or that other factors influenced participation. A higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: A full and open competition with multiple bidders is generally favorable for taxpayers, as it encourages competitive pricing. However, with only three bids, there's a possibility that the government did not secure the most competitive pricing achievable if more vendors had participated.

Public Impact

The primary beneficiaries are likely the Department of Defense and its various branches that utilize the equipment requiring maintenance and repair. The services delivered include the upkeep and functional restoration of unspecified equipment, instruments, and laboratory apparatus. The geographic impact is centered around Cape Canaveral, Florida, where the contractor's operations or the serviced equipment are located. Workforce implications may include employment opportunities for technicians, mechanics, and support staff at Johnson Controls Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed scope of work makes it difficult to assess if the awarded amount is commensurate with services rendered.
The contract duration of over two years for maintenance could lead to escalating costs if not managed tightly.
Limited information on performance metrics or quality control makes it hard to gauge the effectiveness of the maintenance provided.
The specific type of equipment being maintained is not disclosed, which could hide risks associated with specialized or critical assets.

Positive Signals

Awarded under full and open competition, suggesting a fair opportunity for multiple vendors to bid.
The contract specifies a Firm Fixed Price (FFP) type, which provides cost certainty for the government.
The contractor, Johnson Controls Inc., is a large, established company with a significant presence, potentially indicating stability and capacity.

Sector Analysis

This contract falls within the 'Industrial Equipment Maintenance and Repair' sector, a critical but often overlooked segment supporting government operations. The North American Industry Classification System (NAICS) code 812990 ('All Other Personal Services') is broadly applied here, suggesting the service might encompass a diverse range of maintenance activities. The total contract value of $41 million over roughly three years places it as a significant award within its specific niche, though it represents a small fraction of overall federal spending on maintenance and repair services, which can run into billions annually across various agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (SS=false, SB=false). There is no explicit information regarding subcontracting plans or performance. Therefore, the direct impact on the small business ecosystem is likely minimal unless Johnson Controls Inc. voluntarily engages small businesses as subcontractors. Without specific subcontracting goals or reporting, it's difficult to assess the extent to which small businesses may have benefited indirectly.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight by the DoD Inspector General. Transparency is limited by the available public data; details on performance reviews, payment audits, or specific deliverables are not readily accessible. The Firm Fixed Price nature of the contract provides some cost control, but effective oversight would focus on ensuring the contractor meets all performance and quality standards.

Related Government Programs

Department of Defense Maintenance and Repair Contracts
Army Logistics and Readiness Support
Federal Facilities Maintenance Services
Government Equipment Service Contracts

Risk Flags

Lack of Specificity in Scope of Work
Potential for High Unit Costs
Limited Competition Data (3 Bidders)
Absence of Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.1 million to JOHNSON CONTROLS, INC. 200212!001196!2100!AE30 !TACOM - PICATINNY !DAAE3002C1092 !A!N! !N! !20020916!20030416!050516509!006092860!006092860!N!JOHNSON CONTROLS INC !507 E MICHIGAN STREET !MILWAUKEE !WI!53201!10250!009!12!CAPE CANAVERAL !BREVARD !FLORIDA !+000000510609!N!N!000000000000!J066!MAINT & REPAIR OF EQ/INSTRUMENTS & LAB EQUIPMENT !C9E!ALL OTHER SUPPLIES AND EQUIPME!1000!NOT DISCERNABLE OR CLASSIFIED !812990!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!003!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !00

Who is the contractor on this award?

The obligated recipient is JOHNSON CONTROLS, 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 $41.1 million.

What is the period of performance?

Start: 2002-09-16. End: 2005-08-09.

What specific types of equipment or instruments were covered under this maintenance and repair contract?

The provided data does not specify the exact types of equipment, instruments, or laboratory apparatus covered under contract number DAAE3002C1092. The description 'MAINT & REPAIR OF EQ/INSTRUMENTS & LAB EQUIPMENT' is very broad. This lack of specificity hinders a detailed analysis of the contract's scope, the criticality of the assets being maintained, and the appropriateness of the $41 million award value. Understanding the nature of the equipment (e.g., complex machinery, standard lab tools, IT hardware) would allow for better benchmarking against industry standards and assessment of potential risks associated with specialized maintenance requirements.

How does the average monthly cost of this contract compare to industry benchmarks for similar maintenance services?

The contract value of $41,055,492 over approximately 35 months (1058 days) results in an average monthly cost of roughly $1.17 million. Benchmarking this figure accurately is challenging without knowing the specific equipment and services involved. However, for general industrial equipment maintenance, this monthly rate appears substantial. Industry benchmarks vary widely based on the complexity, age, and criticality of the equipment. For instance, routine maintenance on standard office equipment would be significantly less costly than maintaining highly specialized scientific or military hardware. A more precise comparison would require detailed service level agreements and equipment inventories, which are not publicly available for this contract.

What were the key performance indicators (KPIs) or service level agreements (SLAs) for this contract, and how was performance measured?

The provided data does not include details on the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) associated with contract DAAE3002C1092. Typically, maintenance and repair contracts include metrics such as response time for service calls, equipment uptime percentages, repair completion times, and customer satisfaction ratings. Without this information, it is impossible to assess whether Johnson Controls Inc. met the government's performance expectations or if the $41 million expenditure resulted in satisfactory service delivery. Effective contract oversight relies heavily on tracking performance against predefined metrics.

What is Johnson Controls Inc.'s track record with similar government maintenance contracts, particularly within the Department of Defense?

Johnson Controls Inc. is a large, diversified company with a significant history of government contracting across various sectors, including facilities management and maintenance. While the provided data confirms their award of this specific $41 million contract, it does not detail their past performance on similar DoD maintenance agreements. A comprehensive assessment would require reviewing their contract history for compliance, past performance evaluations, any disputes or claims, and the scope of services provided on previous maintenance contracts. Their general reputation as a large corporation suggests capability, but specific performance on comparable government contracts is crucial for evaluating risk and value.

Were there any identified risks or challenges during the performance of this contract, and how were they mitigated?

The available data for contract DAAE3002C1092 does not contain information regarding specific risks or challenges encountered during its performance, nor the mitigation strategies employed. Common risks in such contracts could include unforeseen equipment failures, difficulties in sourcing parts, changes in operational requirements, or contractor performance issues. Effective contract management typically involves proactive risk identification and mitigation plans. Without access to contract performance reports, audit findings, or modification histories, assessing the actual execution risks and their management is not possible from this dataset.

How does the total spending on 'Maintenance & Repair of Equipment/Instruments & Lab Equipment' by the Department of the Army compare to this single contract's value?

This single contract, valued at $41 million, represents a specific award for maintenance and repair services. The Department of the Army, and the broader Department of Defense, spends billions of dollars annually on a wide array of maintenance, repair, and overhaul (MRO) services across diverse categories of equipment, including aircraft, vehicles, IT systems, and facilities. While $41 million is a significant sum for a single contract, it is likely a relatively small component of the Army's total MRO budget. To contextualize this contract's value, one would need to examine the Army's overall spending trends and allocations for similar maintenance services over the period of performance (2002-2005) and compare it to the total MRO expenditure.

Industry Classification

NAICS: Other Services (except Public Administration) › Other Personal Services › All Other Personal Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Johnson Controls Inc (UEI: 006092860)

Address: 507 E MICHIGAN ST M-93, MILWAUKEE, WI, 53202

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline