DoD's $97M Facilities Support Contract Awarded to Pyramid Services, Inc. Shows Mixed Value

Contract Overview

Contract Amount: $97,129,093 ($97.1M)

Contractor: Pyramid Services, Inc

Awarding Agency: Department of Defense

Start Date: 2005-08-01

End Date: 2011-01-15

Contract Duration: 1,993 days

Daily Burn Rate: $48.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIXED PRICE AWARD FEE

Sector: Other

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $97.1 million to PYRAMID SERVICES, INC for work described as: Key points: 1. The contract's value proposition appears fair, with a significant portion of the total award value potentially tied to performance incentives. 2. Competition dynamics were limited, as the contract was awarded under 'full and open competition after exclusion of sources,' suggesting specific circumstances influenced the bidding process. 3. Risk indicators are moderate, with a fixed-price award fee structure that balances cost control with performance-based incentives. 4. Performance context is difficult to fully assess without detailed delivery data, but the contract duration of 1993 days indicates a long-term service requirement. 5. The contract falls within the facilities support services sector, a common area for government outsourcing. 6. The total award value of $97.1 million over its life cycle represents a substantial investment in maintaining government facilities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and a clear understanding of the services rendered. The fixed-price award fee structure suggests an attempt to control costs while incentivizing quality. However, the lack of detailed cost breakdowns and comparisons to similar contracts makes a definitive value assessment difficult. The total award value of over $97 million over its duration indicates a significant investment, and the 'fair' rating reflects the uncertainty in quantifying the precise value for money delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This specific procurement method suggests that while the initial intent may have been broad competition, certain factors led to the exclusion of some potential bidders or a more targeted approach. The number of bidders is not explicitly stated, but the 'exclusion of sources' implies a potentially narrower field than a standard full and open competition. This could impact price discovery, potentially leading to less competitive pricing than if all qualified sources were allowed to bid without restriction.

Taxpayer Impact: The limited competition may have resulted in taxpayers paying a premium compared to a scenario with broader participation. The exclusion of sources warrants further scrutiny to ensure it was justified and did not unduly restrict the government's ability to secure the best possible price.

Public Impact

The primary beneficiaries are the Department of Defense and its various facilities, which receive essential maintenance and support services. Services delivered likely include a range of facility operations, maintenance, repair, and potentially custodial or groundskeeping functions. The geographic impact is concentrated within the areas where the Department of Defense facilities are located, primarily in California based on the award data. Workforce implications include the creation or sustainment of jobs for individuals employed by Pyramid Services, Inc. and any potential subcontractors involved in delivering these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method raises questions about whether the most competitive pricing was achieved.
Lack of detailed performance metrics makes it difficult to assess the true value for money delivered under the contract.
The fixed-price award fee structure, while common, can sometimes lead to contractors focusing on meeting minimum requirements rather than exceeding them without additional incentive.

Positive Signals

The contract utilizes a fixed-price award fee structure, which aims to provide cost certainty while rewarding performance.
The long contract duration suggests a stable, long-term need for these services, providing predictability for both the government and the contractor.
The award to Pyramid Services, Inc. indicates they met the government's requirements for providing these critical facilities support services.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category encompassing a wide range of services necessary for the operation and maintenance of physical infrastructure. This sector is a significant component of government contracting, as agencies rely on these services to ensure their facilities are functional, safe, and well-maintained. Comparable spending benchmarks in this sector are highly variable, depending on the scope and scale of services, but government spending on facilities management is consistently in the billions annually across all agencies.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary focus or requirement for this specific contract. There is no indication of a small business set-aside. This suggests that the contract was likely awarded to a large business or that subcontracting opportunities for small businesses were not explicitly mandated or tracked in this data extract. The impact on the small business ecosystem would therefore be minimal unless Pyramid Services, Inc. voluntarily engaged small businesses for subcontracting.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) at the Department of the Air Force, responsible for monitoring performance and ensuring compliance with contract terms. Accountability measures are embedded in the award fee structure, which ties a portion of the payment to performance. Transparency is generally facilitated through contract award databases, though detailed performance reports are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Base Operations Support (BOS)
Logistics and Supply Chain Management
Professional, Scientific, and Technical Services
Government Facilities Maintenance
Contracted Services for Government Operations

Risk Flags

Limited competition due to exclusion of sources.
Potential for suboptimal value for money without clear performance benchmarks.
Contract duration may mask inefficiencies if not actively managed.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.1 million to PYRAMID SERVICES, INC. See the official description on USAspending.

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 Air Force).

What is the total obligated amount?

The obligated amount is $97.1 million.

What is the period of performance?

Start: 2005-08-01. End: 2011-01-15.

What specific types of facilities support services were included under this contract?

While the contract is categorized under 'Facilities Support Services' (NAICS 561210), the precise scope is not detailed in the provided data. Typically, this category encompasses a wide array of services essential for the operation and upkeep of government facilities. These can include, but are not limited to, maintenance and repair of buildings and grounds, custodial services, pest control, waste management, security systems maintenance, and potentially energy management. The specific services would have been defined in the Performance Work Statement (PWS) attached to the contract, outlining the exact requirements, standards, and deliverables expected from Pyramid Services, Inc.

How does the $97.1 million total award value compare to similar facilities support contracts awarded by the DoD?

Comparing the $97.1 million total award value requires context regarding the contract's duration and scope. This contract spanned from August 2005 to January 2011, approximately 5.4 years. For a contract of this duration and type, $97.1 million represents an average annual value of roughly $17.8 million. This figure is within the expected range for large-scale facilities support contracts for major military installations or multiple facilities. However, without knowing the specific number and size of facilities supported, the geographic spread, and the complexity of services required, a direct comparison to other DoD contracts is difficult. Larger, more complex contracts supporting extensive infrastructure or specialized services could easily exceed this value, while smaller contracts for single, less critical facilities would be significantly lower.

What are the primary risks associated with a Fixed Price Award Fee (FPAF) contract structure for facilities support?

The Fixed Price Award Fee (FPAF) structure presents a balance of risks. For the government, the primary risk is that the contractor may focus on achieving the minimum acceptable performance to earn the base fee, potentially neglecting opportunities for exceptional service unless significant award fees are attainable and clearly defined. There's also a risk that the award fee criteria might be poorly defined or subjective, leading to disputes. For the contractor, the risk lies in underestimating the costs associated with achieving the higher performance levels required to earn substantial award fees. If costs escalate beyond projections, and the award fee does not sufficiently compensate, profitability can be eroded. Additionally, poorly managed performance can lead to lower-than-expected earnings, impacting the contractor's financial stability.

What does the 'full and open competition after exclusion of sources' procurement method imply about the bidding process?

The 'full and open competition after exclusion of sources' method is a specific procurement strategy that suggests a deviation from a standard, unrestricted full and open competition. It implies that the agency initially intended to compete the requirement broadly but subsequently excluded certain sources based on specific, justifiable criteria outlined in the solicitation. These exclusions could be due to factors like security requirements, specialized capabilities, past performance issues with certain vendors, or specific program needs that only a subset of potential offerors could meet. While it aims for competition among the remaining eligible sources, it inherently limits the pool of bidders compared to a truly unrestricted process, potentially impacting the level of price competition achieved.

How has spending on facilities support services evolved within the Department of Defense since 2005?

Spending on facilities support services within the Department of Defense has generally trended upwards over the years, driven by factors such as aging infrastructure requiring more maintenance, increased emphasis on operational efficiency through outsourcing, and the growing complexity of facility management. While this specific contract ended in 2011, the overall DoD budget allocated to facilities sustainment, restoration, and modernization (SRM) has remained substantial, often in the tens of billions of dollars annually. Trends have also included a greater focus on performance-based contracting, sustainability initiatives (e.g., energy efficiency), and the integration of technology for better facility management. The outsourcing of routine maintenance and support services has been a consistent strategy to leverage private sector expertise and potentially achieve cost savings, although the effectiveness and cost-efficiency of such outsourcing remain subjects of ongoing analysis and debate.

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: 6

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $97,129,093

Exercised Options: $97,129,093

Current Obligation: $97,129,093

Contract Characteristics

Cost or Pricing Data: NO

Timeline