Increased Competition Can Reduce Elevator Maintenance and Cleaning Service Contract Costs

The General Services Administration's (GSA) Public Buildings Service (PBS) manages federally owned buildings and commercial space leased for federal agency use. GSA contracts with private firms for some maintenance and repair services. As of May 1977, GSA had 295 contracts worth $5.1 million for elevator maintenance services and, as of June 1977, had contracts worth $49 million for cleaning services in about 500 buildings. Federal statutes provide that government purchases of goods and services be made by formal advertising whenever feasible and practical.

Nearly 75 percent of the GSA elevator maintenance contracts in effect during fiscal year 1977 were awarded noncompetitively to elevator equipment manufacturers. GSA justified its actions based on the determination that it was impractical to secure competition by advertising and necessary to purchase these services from the manufacturer in order to get replacement parts on a timely basis and avoid service interruptions. Although GSA has made limited efforts to obtain competition, it is available for elevator maintenance services. Most of the GSA cleaning service contracts are advertised, fixed-price contracts. However, as of June 30, 1977, 13 percent of the federal buildings were cleaned under negotiated, cost-plus-award-fee contracts. Cleaning costs for the 64 buildings under cost-plus-award-fee contracts were about $5 million higher than the costs would have been under advertised contracts.

Recommendations

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