GSA's $28.3M elevator maintenance contract with KONE Inc. awarded in 2000, spanning over 7 years

Contract Overview

Contract Amount: $28,306,437 ($28.3M)

Contractor: Kone Inc

Awarding Agency: General Services Administration

Start Date: 2000-01-15

End Date: 2011-09-30

Contract Duration: 4,276 days

Daily Burn Rate: $6.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: ELEVATOR MAINTENANCE

Place of Performance

Location: KANSAS CITY, JACKSON County, MISSOURI, 64131

State: Missouri Government Spending

Plain-Language Summary

General Services Administration obligated $28.3 million to KONE INC for work described as: ELEVATOR MAINTENANCE Key points: 1. Contract value of $28.3 million over its lifespan suggests significant investment in building infrastructure. 2. The use of 'FULL AND OPEN COMPETITION' indicates a potentially competitive bidding process. 3. A long contract duration of over 7 years may present risks related to evolving technology and market prices. 4. The contract type 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' aims to balance cost certainty with market fluctuations. 5. Awarded by the General Services Administration (GSA), this contract falls under the Public Buildings Service, managing federal building assets. 6. The North American Industry Classification System (NAICS) code 238290 points to a specialized market of building equipment contractors.

Value Assessment

Rating: fair

The total award amount of $28.3 million over approximately 7.5 years averages to about $3.77 million annually. Without specific details on the number of elevators maintained or the scope of services, a direct per-unit cost comparison is difficult. However, for a contract of this duration and scale, the pricing would need to be benchmarked against similar large-scale elevator maintenance contracts managed by GSA or other federal agencies to assess value for money. The fixed-price with economic price adjustment structure suggests an attempt to manage costs, but the effectiveness depends on the specific adjustment clauses.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' suggesting that all responsible sources were permitted to submit bids. The presence of 4 bids indicates a degree of competition. However, the number of bidders (4) for a contract of this size and duration might be on the lower side, potentially limiting the full benefits of price discovery that a larger pool of bidders could offer. Further analysis would be needed to determine if the competition was robust enough to drive optimal pricing.

Taxpayer Impact: A fully and openly competed contract generally offers better value to taxpayers by fostering competition that can drive down prices and improve service quality. While 4 bidders is a moderate level of competition, it is preferable to sole-source or limited competition scenarios.

Public Impact

Federal employees and visitors benefit from reliable elevator operations in federally managed buildings. Ensures the continued functionality and safety of critical building infrastructure within the General Services Administration's portfolio. The contract supports jobs within the elevator maintenance and repair industry, likely concentrated in the Missouri region where the contract was managed. Maintains accessibility for individuals with disabilities in federal facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 7 years) may lead to outdated technology or service agreements.
Economic price adjustment clauses can introduce cost unpredictability if not carefully managed.
Limited number of bidders (4) might indicate potential barriers to entry or insufficient market outreach.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent process.
Fixed-price elements provide some cost control for the government.
Contract managed by GSA, an agency with significant experience in federal procurement and facility management.

Sector Analysis

The elevator maintenance sector is a specialized segment of the broader building equipment and services industry. This contract falls under 'Other Building Equipment Contractors' (NAICS 238290). The market is characterized by established players, significant technical expertise requirements, and varying contract structures from routine maintenance to full service agreements. GSA, as a major property manager, represents a substantial customer base for such services, and its procurement practices significantly influence market dynamics.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract ('sb': false). There is no explicit information on subcontracting plans for small businesses. Without this data, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often have indirect benefits through supply chains if small businesses are engaged by the prime contractor.

Oversight & Accountability

The General Services Administration (GSA) typically has robust oversight mechanisms for its contracts, including performance monitoring and contract administration. The Public Buildings Service (PBS) within GSA is responsible for managing federal buildings and ensuring compliance. Inspector General audits and performance reviews are common oversight tools for such contracts to ensure accountability and transparency, although specific IG involvement for this particular contract is not detailed here.

Related Government Programs

Federal Building Maintenance Contracts
GSA Facility Management Services
Elevator and Escalator Maintenance Services
Public Buildings Service Contracts

Risk Flags

Long contract duration
Economic price adjustment clause
Moderate number of bidders

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $28.3 million to KONE INC. ELEVATOR MAINTENANCE

Who is the contractor on this award?

The obligated recipient is KONE INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.3 million.

What is the period of performance?

Start: 2000-01-15. End: 2011-09-30.

What was the specific scope of services included in this elevator maintenance contract?

The provided data indicates the contract was for 'ELEVATOR MAINTENANCE' (d: ELEVATOR MAINTENANCE) awarded to KONE INC. However, the specific scope of services is not detailed. Typically, elevator maintenance contracts can range from basic preventative maintenance (inspections, lubrication, minor adjustments) to comprehensive service agreements that include emergency repairs, parts replacement, and modernization. The contract type, 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (pt: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT), suggests a base service level with provisions for adjusting costs based on economic factors, implying a defined scope that is subject to price changes.

How does the annual cost of this contract compare to industry benchmarks for elevator maintenance?

The contract's total value was $28,306,437.30 (a: 28306437.3) over a duration of 4276 days (dur: 4276), which is approximately 11.7 years (though the award and end dates suggest closer to 9.5 years). This averages to roughly $3.05 million per year. Benchmarking this requires detailed information on the number and type of elevators, geographic locations, and the specific service levels (e.g., preventative vs. full service). Without these specifics, a direct comparison is challenging. However, for a large portfolio of elevators managed by GSA, this annual figure might be within a reasonable range, assuming a significant number of units are covered. Industry reports or GSA's own internal benchmarks would be necessary for a precise comparison.

What were the key performance indicators (KPIs) used to evaluate KONE INC.'s performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) used for evaluating KONE INC.'s performance. Federal contracts, especially those managed by GSA, typically include performance standards related to response times for service calls, equipment uptime, preventative maintenance completion rates, and customer satisfaction. These KPIs are crucial for ensuring the reliability and safety of the elevators. The contract's success would be measured against these predefined metrics, potentially impacting future contract awards or renewals.

What is the historical spending trend for elevator maintenance services by the General Services Administration?

The provided data pertains to a single contract awarded in 2000. To understand historical spending trends for elevator maintenance by GSA, a broader analysis of GSA's procurement data over multiple years would be required. This would involve aggregating spending across all similar contracts (NAICS 238290, relevant PSC codes) awarded by GSA's Public Buildings Service and other relevant entities. Such an analysis would reveal patterns in contract values, durations, competition levels, and contractor performance over time, highlighting any increases or decreases in investment in this service category.

Were there any significant contract modifications or change orders issued during the life of this contract?

The provided data summary does not include information on contract modifications or change orders. For a contract spanning nearly a decade (aw: 2000-01-15, ed: 2011-09-30), it is common for modifications to occur due to changes in requirements, scope adjustments, or economic price escalations. Analyzing these modifications would provide insight into how the contract evolved, potential cost impacts, and the flexibility of the contracting process. Accessing the contract's official modification history would be necessary to answer this question.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Other Building Equipment Contractors

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Contractor Details

Parent Company: Kone S.A. (UEI: 459906942)

Address: ONE KONE COURT, MOLINE, IL, 17

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,306,437

Exercised Options: $28,306,437

Current Obligation: $28,306,437

Timeline