Department of the Army's $105M Facilities Support Services contract awarded to PRIDE INDUSTRIES shows potential value concerns

Contract Overview

Contract Amount: $105,365,353 ($105.4M)

Contractor: Pride Industries

Awarding Agency: Department of Defense

Start Date: 2018-06-01

End Date: 2023-05-31

Contract Duration: 1,825 days

Daily Burn Rate: $57.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF PREVENTATIVE MAINTENANCE ORDER PMO LABOR

Place of Performance

Location: FORT POLK, VERNON County, LOUISIANA, 71459

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $105.4 million to PRIDE INDUSTRIES for work described as: IGF::OT::IGF PREVENTATIVE MAINTENANCE ORDER PMO LABOR Key points: 1. The contract's value-for-money is questionable given the lack of competitive bidding and the high per-unit cost. 2. Competition dynamics are limited, with the contract being awarded on a 'not available for competition' basis. 3. Risk indicators include the sole-source nature of the award and the absence of a clear justification for limited competition. 4. Performance context is broad, covering preventative maintenance and labor for facilities support. 5. Sector positioning is within Facilities Support Services, a critical but often high-cost area for government operations.

Value Assessment

Rating: questionable

The total award of over $105 million for facilities support services over five years warrants scrutiny, especially given the lack of competitive pricing. Benchmarking against similar contracts is difficult without knowing the specific scope of services and geographic locations covered. However, the absence of competition suggests that taxpayers may not have received the best possible pricing. The firm-fixed-price nature of the contract provides some cost certainty, but the overall value proposition is weakened by the procurement method.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'not available for competition' basis, indicating a sole-source procurement. There is no information provided on the number of bidders or the justification for limiting competition. Sole-source awards can lead to higher prices and reduced innovation as there is no market pressure to offer competitive terms. This procurement method bypasses the standard competitive processes designed to ensure fair and reasonable pricing for the government.

Taxpayer Impact: The lack of competition means taxpayers likely paid a premium for these services. Without a competitive bidding process, there is no assurance that the government secured the most cost-effective solution available in the market.

Public Impact

The Department of the Army benefits from consistent facilities support services, ensuring operational readiness. Services include preventative maintenance and labor, crucial for maintaining military infrastructure. The contract's geographic impact is concentrated in Louisiana, supporting installations in that state. Workforce implications include the potential employment of personnel for facilities maintenance and support roles within Louisiana.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpayment.
Sole-source award limits transparency and price discovery.
Absence of detailed justification for non-competitive award.
Potential for contractor lock-in due to sole-source nature.
Limited visibility into performance metrics and cost-effectiveness.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Long-term contract (5 years) offers stability for service delivery.
Focus on preventative maintenance can reduce long-term repair costs.
Award to an established contractor may indicate a history of satisfactory performance.

Sector Analysis

Facilities Support Services is a broad category encompassing a wide range of maintenance, repair, and operational services for government and commercial properties. This sector is characterized by numerous providers, from large facility management corporations to specialized service companies. Government spending in this area is substantial, driven by the need to maintain extensive infrastructure. Benchmarking is challenging due to the variability in service scope, geographic location, and contract structure. However, competitive solicitations typically aim to secure services at rates reflecting market conditions.

Small Business Impact

The data indicates that small business participation was not a stated goal for this contract (ss: false, sb: false). There is no information on subcontracting plans or set-asides for small businesses. This suggests that the primary contractor, PRIDE INDUSTRIES, likely performed the majority of the work, with limited opportunities for small businesses to participate in this large-scale federal contract. This could represent a missed opportunity to leverage the small business industrial base.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) and potentially the agency's Inspector General (IG). The firm-fixed-price nature provides some level of cost control, but the lack of competition limits the ability to assess value for money through market comparisons. Transparency is reduced due to the sole-source award. Accountability would primarily stem from performance reviews and adherence to contract terms, but the absence of competitive benchmarks makes objective performance assessment more challenging.

Related Government Programs

Base Operations Support Services
Facilities Maintenance Contracts
Logistics and Support Services
Government Property Management

Risk Flags

Sole-source award
Lack of competition justification
High contract value without competitive benchmark
Potential for cost overruns due to lack of market pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.4 million to PRIDE INDUSTRIES. IGF::OT::IGF PREVENTATIVE MAINTENANCE ORDER PMO LABOR

Who is the contractor on this award?

The obligated recipient is PRIDE INDUSTRIES.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $105.4 million.

What is the period of performance?

Start: 2018-06-01. End: 2023-05-31.

What specific services are included under 'Facilities Support Services' for this contract, and how do they align with the Army's operational needs?

The provided data categorizes this contract under 'Facilities Support Services' (NAICS 561210) and mentions 'IGF PREVENTATIVE MAINTENANCE ORDER PMO LABOR'. This suggests the contract covers routine maintenance, repair, and labor necessary to keep Army facilities operational and in good condition. Specific services likely include HVAC maintenance, electrical and plumbing repairs, janitorial services, groundskeeping, and general labor for facility upkeep. These services are fundamental to maintaining the readiness and habitability of military installations, ensuring that personnel have safe and functional environments to live and work in. The 'preventative maintenance' aspect indicates a focus on proactive measures to avoid costly breakdowns and extend the lifespan of facility assets.

Can the $105 million contract value be benchmarked against similar facilities support contracts awarded by other federal agencies or the Department of Defense?

Benchmarking this $105 million contract is challenging without more detailed information on the specific scope of services, geographic locations, and the level of service required. Facilities support contracts can vary significantly in their comprehensiveness, ranging from basic janitorial services to full-spectrum facility management including maintenance, repairs, security, and landscaping. The Department of Defense alone manages a vast portfolio of real property, and contract values are highly dependent on the size and complexity of the facilities being supported. However, a $105 million award over five years ($21 million annually) for facilities support, especially if awarded sole-source, suggests a substantial scope of work. Without competitive data, it's difficult to definitively state if this represents a fair market price, but the lack of competition inherently raises concerns about potential overpayment compared to what a competitive process might yield.

What are the primary risks associated with awarding a large facilities support contract on a sole-source basis?

The primary risks associated with awarding a large facilities support contract on a sole-source basis include: 1. **Higher Costs:** Without competition, the contractor has less incentive to offer the lowest possible price, potentially leading to inflated costs for taxpayers. 2. **Reduced Innovation:** A sole-source award removes the pressure to innovate or offer more efficient service delivery methods that might be brought forth by competing firms. 3. **Lack of Transparency:** The justification for a sole-source award may not always be fully transparent or robust, making it difficult to assess the necessity of bypassing competition. 4. **Contractor Lock-in:** The agency may become dependent on the incumbent contractor, making it difficult to switch providers even if performance or pricing becomes unsatisfactory. 5. **Potential for Complacency:** The contractor may become complacent in service delivery or cost management, knowing that competition is not a threat.

How does the 'firm fixed price' contract type impact the government's financial risk and the contractor's performance incentives?

A 'firm fixed price' (FFP) contract type is generally favored by the government for services where the scope of work is well-defined and unlikely to change significantly. Under an FFP contract, the contractor agrees to perform a specific scope of work for a predetermined price, regardless of the actual costs incurred. This shifts the primary financial risk to the contractor; if their costs exceed the fixed price, their profit margin decreases or they may incur a loss. Conversely, if they can perform the work for less than the fixed price, their profit increases. This structure provides the government with cost certainty, as the total price is fixed. It also incentivizes the contractor to control costs and perform efficiently to maximize their profit. However, for complex or evolving services, an FFP contract can disincentivize the contractor from suggesting cost-saving innovations if it reduces their profit, and it may lead to scope creep disputes if the government requests work beyond the original definition.

What is the historical spending pattern for facilities support services by the Department of the Army, and how does this contract fit within that trend?

Historical spending on facilities support services by the Department of the Army is substantial, reflecting the vast real estate portfolio and operational requirements of military installations. The Army consistently allocates significant portions of its budget to maintaining buildings, infrastructure, and grounds across numerous bases worldwide. Contracts for these services range from small, localized maintenance agreements to large, comprehensive base operations support (BOS) contracts. This specific $105 million contract, awarded in 2018 and ending in 2023, represents a significant, multi-year investment in facilities support for a particular region (Louisiana). Its value suggests it covers a broad scope of services, potentially including preventative maintenance and labor across multiple facilities or a large installation. Without access to detailed historical spending data and contract specifics, it's difficult to precisely contextualize this single award within the Army's overall trend, but it aligns with the general pattern of substantial and ongoing investment in facility upkeep.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9124715R0021

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10030 FOOTHILLS BLVD, ROSEVILLE, CA, 95747

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

Financial Breakdown

Contract Ceiling: $106,061,546

Exercised Options: $106,061,546

Current Obligation: $105,365,353

Actual Outlays: $382,413

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline