Treasury's $19M Janitorial Contract Awarded to Memphis Goodwill Replaces Prior Contract

Contract Overview

Contract Amount: $19,057,849 ($19.1M)

Contractor: Memphis Goodwill Industries Inc

Awarding Agency: Department of the Treasury

Start Date: 2005-04-01

End Date: 2011-09-30

Contract Duration: 2,373 days

Daily Burn Rate: $8.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: JANITORIAL SERVICES - MEMPHIS - REPLACES TIRSE-00-C-00001

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38118

State: Tennessee Government Spending

Plain-Language Summary

Department of the Treasury obligated $19.1 million to MEMPHIS GOODWILL INDUSTRIES INC for work described as: JANITORIAL SERVICES - MEMPHIS - REPLACES TIRSE-00-C-00001 Key points: 1. Value for money assessed against similar janitorial contracts. 2. Competition dynamics indicate a sole-source award, potentially impacting price. 3. Risk indicators include contract duration and sole-source nature. 4. Performance context is limited without specific service delivery metrics. 5. Sector positioning within government support services. 6. The contract replaces a previous award to the same entity.

Value Assessment

Rating: fair

The contract's value of approximately $19 million over its duration appears reasonable for janitorial services of this scale. Benchmarking against similar government contracts for janitorial services in the region or for comparable facilities would provide a clearer picture of value for money. Without specific details on the scope of services or performance standards, a definitive assessment is challenging. However, the consistent award to the same contractor suggests a level of satisfaction with past performance, which can sometimes justify a slightly higher price point if service quality is consistently high.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded sole-source. This means that only one vendor, Memphis Goodwill Industries Inc., was solicited for this requirement. The lack of competition limits the government's ability to explore alternative pricing or service models that might be offered by other qualified vendors. While sole-source awards can be justified under specific circumstances, they generally lead to less favorable pricing and reduced innovation compared to fully competed contracts.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. This award mechanism bypasses the opportunity for multiple vendors to offer lower bids, potentially resulting in higher overall costs for the government.

Public Impact

The primary beneficiaries are the employees of Memphis Goodwill Industries Inc., providing them with employment opportunities. The services delivered include janitorial and cleaning services for IRS facilities in Memphis, Tennessee. The geographic impact is concentrated in Memphis, Tennessee, supporting local operations. Workforce implications include job creation and support for individuals with employment barriers through Goodwill's mission.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Long contract duration (over 6 years) may reduce flexibility to adapt to changing needs or market conditions.
Lack of competition could lead to complacency in service delivery if not actively managed.

Positive Signals

Award to a non-profit organization (Goodwill) aligns with social responsibility goals.
Consistent award to the same contractor suggests a stable and potentially effective working relationship.
Potential for positive community impact through Goodwill's employment mission.

Sector Analysis

Janitorial services fall under the broader Facilities Support Services sector, which is a significant component of government contracting. This sector includes a wide range of services necessary for the operation and maintenance of government buildings and infrastructure. The market for these services is generally stable, with demand driven by the need to maintain government facilities. While specific benchmarks for janitorial services can vary by region and facility type, government contracts often represent a substantial portion of the overall market, particularly for large-scale operations.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, Memphis Goodwill Industries Inc., is a non-profit organization, not typically categorized as a small business for set-aside purposes. There is no explicit information regarding subcontracting plans for small businesses within this award. The impact on the small business ecosystem is therefore likely minimal, as the primary contract is not structured to promote small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Internal Revenue Service (IRS) or the Department of the Treasury. Accountability measures would be outlined in the contract's performance standards and service level agreements. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise concerning the contract's execution.

Related Government Programs

Federal Janitorial Services Contracts
Government Facilities Maintenance
IRS Operations Support
Department of the Treasury Procurement
Non-profit Contracting

Risk Flags

Sole-source award
Long contract duration
Lack of explicit performance metrics in provided data

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $19.1 million to MEMPHIS GOODWILL INDUSTRIES INC. JANITORIAL SERVICES - MEMPHIS - REPLACES TIRSE-00-C-00001

Who is the contractor on this award?

The obligated recipient is MEMPHIS GOODWILL INDUSTRIES INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $19.1 million.

What is the period of performance?

Start: 2005-04-01. End: 2011-09-30.

What was the specific justification for awarding this contract sole-source?

The provided data indicates the contract type as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for such an award is typically documented in a Justification for Other Than Full and Open Competition (JOFOC) or a similar waiver document. Common reasons for sole-source awards include unique capabilities of a single vendor, urgent and compelling needs where competition is impractical, or when a previous contract expires and only one vendor can continue services without unacceptable delay or cost. Without access to the JOFOC for this specific contract, the precise rationale remains unknown, but it would need to demonstrate why full and open competition was not feasible or not in the government's best interest.

How does the pricing of this contract compare to similar janitorial services contracts awarded by the government?

Directly comparing the pricing of this $19 million contract to similar janitorial services contracts is challenging without more granular data. Key factors influencing price include the scope of services (e.g., frequency of cleaning, specific tasks like window washing or floor waxing), the square footage of the facilities, labor rates in the Memphis area, and the contract duration. The contract is a Firm Fixed Price (FFP) type, which shifts cost risk to the contractor. To perform a robust comparison, one would need to identify contracts with similar service levels, facility sizes, and geographic locations, and then normalize for differences in contract length and economic conditions at the time of award. The fact that it is a sole-source award also suggests that competitive pricing pressures may have been absent.

What are the potential risks associated with a sole-source award for janitorial services?

The primary risk of a sole-source award for janitorial services is the potential for inflated pricing due to the lack of competitive pressure. Without multiple bidders vying for the contract, the selected vendor may not feel compelled to offer the most cost-effective solution. Another risk is reduced service quality or innovation, as the contractor may face less incentive to improve services or adopt new technologies if they are guaranteed the contract without competition. Furthermore, sole-source awards can create a perception of favoritism or lack of transparency, potentially undermining public trust. Finally, if the sole-source vendor experiences performance issues, the government may have limited recourse or face significant disruption in service if transitioning to a new vendor is difficult and costly.

What is the track record of Memphis Goodwill Industries Inc. in performing government contracts, particularly janitorial services?

Memphis Goodwill Industries Inc. has a history of performing janitorial services for the government, as evidenced by this contract replacing a prior award to the same entity (TIRSE-00-C-00001). This continuity suggests a potentially positive track record, as agencies often prefer to re-award contracts to proven performers, especially in service-based contracts where reliability and established processes are crucial. However, a comprehensive assessment would require reviewing performance evaluations, any past performance issues or disputes, and the overall satisfaction levels expressed by the contracting agency over the duration of previous contracts. Without access to these specific performance metrics, it's difficult to definitively gauge their track record beyond the fact of repeated awards.

How does the duration of this contract (2373 days) impact its overall value and risk?

The contract duration of 2373 days, approximately 6.5 years, is quite long for a janitorial services contract. While a longer duration can provide stability and predictability for both the government and the contractor, it also introduces several potential issues. From a value perspective, it locks in pricing for an extended period, which could be disadvantageous if market rates for janitorial services decrease over time. Conversely, it could be advantageous if rates are expected to rise significantly. From a risk perspective, a long duration increases the exposure to potential performance degradation, changes in the contractor's operational capacity, or shifts in government requirements that the contract may not adequately address. It also reduces the government's flexibility to adapt to new technologies or service providers that may emerge during the contract period.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: TIRSE-04-R-00002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2605 CHELSEA AVENUE, MEMPHIS, TN, 09

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

Financial Breakdown

Contract Ceiling: $19,057,849

Exercised Options: $19,057,849

Current Obligation: $19,057,849

Timeline