HHS awarded $44M+ to Goodwill for custodial services over 5 years, with no competition

Contract Overview

Contract Amount: $44,173,174 ($44.2M)

Contractor: Goodwill Industries of North Georgia, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2007-07-01

End Date: 2012-09-22

Contract Duration: 1,910 days

Daily Burn Rate: $23.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NISH/GOODWILL NEW CUSTODIAL CONTRACT 2007

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $44.2 million to GOODWILL INDUSTRIES OF NORTH GEORGIA, INC. for work described as: NISH/GOODWILL NEW CUSTODIAL CONTRACT 2007 Key points: 1. The contract utilized a Firm Fixed Price structure, providing cost certainty for the government. 2. Awarded to a single entity, Goodwill Industries of North Georgia, Inc., limiting potential cost savings from competition. 3. The contract duration of approximately 5 years (1910 days) allowed for stable service provision. 4. The services were categorized under Janitorial Services, a common requirement across federal agencies. 5. The contract was not competed, raising questions about potential value for money compared to market rates.

Value Assessment

Rating: fair

The contract's value of over $44 million for custodial services over five years appears substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or other similar contracts. The use of a Firm Fixed Price contract suggests a defined scope and cost, but the lack of competition means the government may not have secured the most economical price. Further analysis would require comparing the per-square-foot cost or service level agreements to industry standards for janitorial services in the region.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Goodwill Industries of North Georgia, Inc. This means the agency did not solicit bids from multiple vendors. While sole-source awards can be justified under specific circumstances, such as unique capabilities or urgent needs, the absence of competition typically leads to higher prices and reduced innovation. The lack of a competitive process here means the government did not benefit from the price discovery and cost efficiencies that open competition usually provides.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the lack of competitive pressure. Without multiple bids, there is less assurance that the price reflects the best value achievable in the market.

Public Impact

The Centers for Disease Control and Prevention (CDC) facilities in Georgia benefited from consistent custodial services. This contract supported the operational readiness and cleanliness of critical public health infrastructure. The award to Goodwill Industries likely provided employment opportunities for individuals, potentially including those with disabilities or facing employment barriers, aligning with Goodwill's mission. The services ensured a sanitary environment, contributing to the health and safety of federal employees and visitors at CDC sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in higher costs for taxpayers.
Sole-source award limits transparency in pricing and service level comparisons.
Contract duration without re-competition could lead to complacency in service delivery.

Positive Signals

Award to a mission-driven organization like Goodwill aligns with social responsibility goals.
Firm Fixed Price contract provides budget certainty for the agency.
Long-term contract ensures continuity of essential janitorial services.

Sector Analysis

The janitorial services sector is highly competitive, with numerous small and large businesses offering these services. Federal agencies often procure janitorial services through various contract vehicles, including competitive solicitations and set-asides for small businesses. The total federal spending on janitorial services is significant, reflecting the widespread need for facility maintenance across government operations. This contract represents a portion of that spending, specifically for the CDC in Georgia.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award was made directly to Goodwill Industries, a large non-profit organization. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award, although Goodwill's mission often involves employing individuals who may have previously faced barriers to employment.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). As a definitive contract, it would be subject to standard contract administration and performance monitoring. The Firm Fixed Price nature simplifies financial oversight but requires close monitoring of service delivery against the contract's statement of work. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Custodial Services Contracts
HHS Facility Maintenance Contracts
CDC Support Services
Goodwill Industries Federal Contracts

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $44.2 million to GOODWILL INDUSTRIES OF NORTH GEORGIA, INC.. NISH/GOODWILL NEW CUSTODIAL CONTRACT 2007

Who is the contractor on this award?

The obligated recipient is GOODWILL INDUSTRIES OF NORTH GEORGIA, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $44.2 million.

What is the period of performance?

Start: 2007-07-01. End: 2012-09-22.

What was the specific justification for awarding this contract on a sole-source basis to Goodwill Industries?

The provided data indicates the contract was 'NOT COMPETED,' suggesting a sole-source award. Specific justifications for sole-source awards typically fall under FAR Part 6, such as 'only one responsible source and no other supplies or services will satisfy agency requirements.' This could be due to unique capabilities of Goodwill, a specific mandate to support their mission, or potentially an emergency situation. Without further documentation from the agency at the time of award, the precise justification remains unclear. However, agencies often partner with Goodwill due to their social mission of providing employment and training to individuals with barriers to employment, which can sometimes be a factor in sole-source considerations, though it must still meet regulatory requirements for justification.

How does the contract value compare to industry benchmarks for janitorial services in Georgia during the 2007-2012 period?

Benchmarking this $44 million contract against industry standards for janitorial services from 2007-2012 is challenging without more specific details on the scope of work, square footage serviced, and service levels. Janitorial costs vary significantly based on facility type, cleaning frequency, and specific tasks (e.g., deep cleaning, specialized disinfection). Generally, federal contracts can sometimes be priced higher than commercial equivalents due to stricter requirements and overhead, but the lack of competition here raises concerns. Industry reports from that era might provide average cost-per-square-foot data, but a direct comparison would require a detailed analysis of the contract's deliverables versus typical commercial service agreements in the Atlanta metropolitan area or Georgia.

What were the potential risks associated with a sole-source award for essential custodial services?

The primary risk associated with a sole-source award for essential custodial services is the potential for inflated costs. Without competitive bidding, the contractor may not feel pressured to offer the most competitive pricing, leading to taxpayers potentially overpaying. Another risk is reduced service quality or innovation, as there is less incentive for the sole provider to exceed expectations or adopt new, cost-effective methods when there is no threat of losing the contract to a competitor. Furthermore, a sole-source award can limit flexibility if the agency's needs change significantly, as renegotiating terms with a single provider might be less advantageous than having multiple options available.

What is the track record of Goodwill Industries of North Georgia, Inc. in performing large federal custodial contracts?

Goodwill Industries of North Georgia, Inc. has a history of performing contracts, including those with federal agencies. Their mission often aligns with government objectives to support employment for diverse populations. While specific details on their track record for large federal custodial contracts prior to or during this period (2007-2012) are not provided in the data, their longevity and scale suggest experience in managing such operations. Federal agencies often consider a contractor's past performance when making awards, especially sole-source ones, implying that HHS likely had some basis for confidence in Goodwill's ability to fulfill the requirements of this significant contract.

How has federal spending on janitorial services evolved since this contract was awarded in 2007?

Federal spending on janitorial services has likely seen fluctuations and potential increases since 2007, influenced by factors such as inflation, changes in federal facility needs, and evolving cleaning standards (especially post-pandemic). Agencies continuously procure janitorial services across numerous locations. While this specific $44 million contract was a significant award for its time, overall federal spending in this category is distributed across many contracts and agencies. Trends may include increased emphasis on green cleaning practices, enhanced hygiene protocols, and potentially greater use of performance-based contracts. Data from subsequent years would show shifts in total spending, average contract values, and the mix of competitive versus sole-source awards in this service category.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Services to Buildings and Dwellings › Janitorial Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2007N09218

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2201 GLENWOOD AVE SE, ATLANTA, GA, 30316

Business Categories: AbilityOne Program Participant, Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $272,250,419

Exercised Options: $186,477,274

Current Obligation: $44,173,174

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline