DHS Coast Guard awards $10.6M janitorial services contract to CW Resources, Inc. without competition

Contract Overview

Contract Amount: $10,610,366 ($10.6M)

Contractor: CW Resources, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2006-12-01

End Date: 2011-09-30

Contract Duration: 1,764 days

Daily Burn Rate: $6.0K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: JANITORIAL SERVICES

Place of Performance

Location: NEW LONDON, NEW LONDON County, CONNECTICUT, 06320

State: Connecticut Government Spending

Plain-Language Summary

Department of Homeland Security obligated $10.6 million to CW RESOURCES, INC. for work described as: JANITORIAL SERVICES Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The contract was not competed under the simplified acquisition procedures, suggesting a potential lack of broad market engagement. 3. A duration of 1764 days (approximately 4.8 years) indicates a long-term need for these services. 4. The contract was awarded as a purchase order, a common instrument for service acquisition. 5. The North American Industry Classification System (NAICS) code 561720 points to the specific industry for janitorial services. 6. The contract was awarded to a single vendor, raising questions about the extent of price discovery. 7. The contract was not set aside for small businesses, nor does it appear to have small business subcontracting requirements. 8. The contract was awarded in Connecticut, providing a geographic focus for the service delivery.

Value Assessment

Rating: questionable

Benchmarking the value of this $10.6 million janitorial services contract is challenging without more specific details on the scope of work and service levels. However, the lack of competition and the long duration suggest that a thorough market analysis may not have been conducted to ensure the best possible pricing. Comparing this to similar large-scale janitorial contracts across federal agencies would be necessary to determine if the per-unit costs or overall price represent good value for money. The firm-fixed-price structure provides cost certainty but does not inherently guarantee optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly noted as 'NOT COMPETED UNDER SAP,' which typically implies a sole-source or limited competition award. Without further details on the justification for not competing, it is difficult to assess the level of competition. If it was truly sole-source, it means only one vendor was considered, potentially leading to higher prices than if multiple bids were solicited. The absence of competition limits the government's ability to leverage market forces for cost savings.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the most cost-effective pricing available in the market. Without a competitive bidding process, there is a risk that the awarded price is higher than it would have been under a fully competed scenario.

Public Impact

The primary beneficiaries are the U.S. Coast Guard facilities in Connecticut, which will receive essential janitorial services. The services delivered include general janitorial tasks necessary for maintaining a clean and safe working environment. The geographic impact is localized to Connecticut, where the Coast Guard facilities are located. The contract supports jobs within CW Resources, Inc., contributing to employment in the janitorial services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Long contract duration without clear justification for sole-source award raises concerns about value.
Absence of small business set-aside or subcontracting requirements limits opportunities for smaller firms.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established company (CW Resources, Inc.) may indicate reliability in service delivery.
Long duration suggests a stable, ongoing need that has been met by the incumbent.

Sector Analysis

The janitorial services sector is a mature and competitive market, with numerous providers ranging from small local businesses to large national corporations. Federal spending in this area is substantial, supporting facility maintenance across various government agencies. Contracts like this, even for specialized government needs, typically see robust competition when properly solicited. The NAICS code 561720 covers establishments primarily engaged in cleaning building interiors, offices, and/or industrial facilities on a contract basis. This contract represents a portion of the overall federal expenditure on facility support services.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this contract, either as the prime contractor or as subcontractors, were likely limited or non-existent. The absence of such provisions means that the potential economic benefits for the small business ecosystem associated with this specific contract are minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the contracting officer and the relevant program managers within the U.S. Coast Guard and the Department of Homeland Security. The purchase order mechanism itself implies a level of administrative oversight. However, the lack of competition and the long duration might warrant closer scrutiny from oversight bodies like the Government Accountability Office (GAO) or the DHS Inspector General to ensure that the government received fair value and that the sole-source justification was appropriate.

Related Government Programs

Federal Janitorial Services Contracts
Department of Homeland Security Facility Support Services
U.S. Coast Guard Operations Support
Government Purchase Orders
Non-Competed Federal Contracts

Risk Flags

Lack of Competition
Potential for Overpricing
Long Contract Duration
Sole-Source Justification Unclear

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $10.6 million to CW RESOURCES, INC.. JANITORIAL SERVICES

Who is the contractor on this award?

The obligated recipient is CW RESOURCES, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $10.6 million.

What is the period of performance?

Start: 2006-12-01. End: 2011-09-30.

What was the specific justification for awarding this contract on a sole-source basis, especially given the maturity of the janitorial services market?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures). This phrasing often implies a sole-source award, but the specific justification is not detailed. Typically, sole-source awards require a formal justification, such as the unique capability of a single contractor, urgent and compelling needs that preclude competition, or specific statutory authority. Without this justification, it's impossible to definitively assess why competition was bypassed. The janitorial services market is generally competitive, making a sole-source award unusual unless specific circumstances applied, such as a requirement for highly specialized services or a need to maintain continuity with a contractor possessing unique knowledge of specific Coast Guard facilities.

How does the $10.6 million total award value compare to typical janitorial service contracts for facilities of similar size and scope?

Direct comparison of the $10.6 million total award value is difficult without knowing the specific square footage, types of services required (e.g., deep cleaning, specialized disinfection, groundskeeping), frequency of service, and geographic spread of the facilities managed by the U.S. Coast Guard in Connecticut. However, for a contract spanning nearly five years (1764 days), $10.6 million averages roughly $2.12 million per year. This figure could be reasonable or high depending on the scale of operations. Federal agencies often spend significant amounts on facility maintenance. To benchmark effectively, one would need to analyze contracts for similar-sized federal installations or comparable commercial facilities in the same region, considering factors like labor costs and service level agreements.

What are the potential risks associated with awarding a long-term contract (nearly 5 years) without competition?

The primary risks associated with awarding a long-term contract without competition are twofold: potential for inflated costs and reduced service quality. Without the pressure of competing bids, the contractor may have less incentive to offer the most competitive pricing or to continuously improve service delivery. Taxpayers could end up paying more than necessary for the services rendered. Furthermore, a lack of competition can stifle innovation, as the incumbent may not feel compelled to adopt new technologies or more efficient methods. There's also a risk that the government becomes locked into a relationship with a contractor that may not be performing optimally, as switching costs could be high.

What is the track record of CW Resources, Inc. in performing federal janitorial contracts, particularly with the Department of Homeland Security?

CW Resources, Inc. has a history of performing federal contracts, including janitorial services. As a company that has held government contracts, it is likely familiar with federal procurement regulations and performance expectations. Information regarding their specific performance history on DHS or Coast Guard contracts would typically be available through federal procurement databases (like SAM.gov) or past performance evaluations. Without access to those specific performance records, it's difficult to provide a detailed assessment of their track record. However, the fact that they were awarded this contract, even without competition, suggests they may have had prior positive engagement or were identified as a capable provider.

How does this contract's duration and value fit into the broader pattern of federal spending on janitorial and facility maintenance services?

This contract, valued at $10.6 million over approximately 4.8 years, represents a significant but not extraordinary expenditure within the vast landscape of federal facility maintenance. Federal agencies collectively spend billions annually on janitorial, maintenance, and related facility support services. Contracts of this size are common for supporting medium-to-large federal installations. The trend in federal spending often favors longer-term contracts for services like janitorial work to ensure continuity and potentially achieve economies of scale, though the preference is generally for competed contracts. The non-competed nature of this specific award might be an outlier or indicative of specific agency needs or contracting strategies.

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 UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: CW Group Inc (UEI: 849889662)

Address: 200 MYRTLE ST, NEW BRITAIN, CT, 05

Business Categories: AbilityOne Program Participant, Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $10,610,366

Exercised Options: $10,610,366

Current Obligation: $10,610,366

Timeline