State Department Awards $27.5M Contract for Hotel Services in New York

Contract Overview

Contract Amount: $27,506 ($27.5K)

Contractor: Sonesta Benjamin Hotel LLC

Awarding Agency: Department of State

Start Date: 2025-07-22

End Date: 2025-11-30

Contract Duration: 131 days

Daily Burn Rate: $210/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: HOTEL

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10022

State: New York Government Spending

Plain-Language Summary

Department of State obligated $27,506 to SONESTA BENJAMIN HOTEL LLC for work described as: HOTEL Key points: 1. Contract awarded to Sonesta Benjamin Hotel LLC for lodging. 2. The contract is for a duration of 131 days. 3. Services are for the Department of State. 4. The contract type is Firm Fixed Price. 5. The North American Industry Classification System (NAICS) code is 721110 (Hotels and Motels).

Value Assessment

Rating: fair

The contract value of $27.5 million for approximately 4 months of hotel services appears high. Benchmarking against typical per-diem rates for government travelers in New York City is necessary to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The competition method is listed as 'COMPETED UNDER SAP' (Simplified Acquisition Procedures), suggesting it was competed but potentially among a limited pool of vendors. Further details are needed to understand the extent of competition and its impact on price discovery.

Taxpayer Impact: The taxpayer impact is the $27.5 million allocated for these hotel services, which needs to be justified by the necessity and cost-effectiveness of the chosen vendor and location.

Public Impact

Provides essential lodging for government personnel, potentially supporting diplomatic or operational missions. The cost represents a significant expenditure for temporary accommodation. Location in New York City may indicate specific operational needs or events. The duration suggests a focused, short-term requirement rather than long-term housing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

The hospitality sector, particularly hotels, sees significant government spending for temporary lodging, conferences, and personnel support. This contract falls within standard government procurement for such services, though the specific value warrants scrutiny against market rates.

Small Business Impact

There is no indication that small businesses were involved in this contract award. Further analysis would be required to determine if opportunities were missed or if the nature of the requirement precluded small business participation.

Oversight & Accountability

The award is a Purchase Order, which is a common method for acquiring goods and services. Oversight would focus on ensuring the services rendered meet the contract's specifications and that the pricing remains justified throughout the performance period.

Related Government Programs

Risk Flags

Tags

hotels-except-casino-hotels-and-motels, department-of-state, ny, purchase-order, under-100k

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $27,506 to SONESTA BENJAMIN HOTEL LLC. HOTEL

Who is the contractor on this award?

The obligated recipient is SONESTA BENJAMIN HOTEL LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $27,506.

What is the period of performance?

Start: 2025-07-22. End: 2025-11-30.

What specific events or operational needs necessitate such a high expenditure for hotel services in New York City?

The specific operational needs driving this significant expenditure are not detailed in the provided data. Typically, large government contracts for hotel services in high-cost areas like New York City are associated with major diplomatic events, extended temporary duty assignments for personnel, or critical operational support requiring a centralized location. Without further context, it's difficult to ascertain the precise justification beyond general lodging requirements.

How does the per-unit cost of this contract compare to standard government per-diem rates in New York City?

The provided data does not include a per-unit cost breakdown, making a direct comparison to standard government per-diem rates impossible. The total award of $27.5 million over 131 days suggests a substantial daily rate. A thorough analysis would require obtaining the number of rooms or room-nights procured to calculate an effective daily rate and benchmark it against GSA or State Department per-diem limits for the relevant New York City zip codes.

What measures are in place to ensure the effectiveness and value for money of these hotel services over the contract duration?

Effectiveness and value for money are typically ensured through contract performance monitoring, adherence to service level agreements, and post-performance reviews. For this contract, the Department of State would likely have designated personnel to oversee the services, verify billing, and ensure the hotel meets the required standards. The firm fixed-price nature of the contract helps control costs, but ongoing vigilance is needed to confirm the necessity and appropriateness of the services utilized.

Industry Classification

NAICS: Accommodation and Food ServicesTraveler AccommodationHotels (except Casino Hotels) and Motels

Product/Service Code: TRANSPORT, TRAVEL, RELOCATIONTRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 125 E 50TH ST, NEW YORK, NY, 10022

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,506

Exercised Options: $27,506

Current Obligation: $27,506

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline

Start Date: 2025-07-22

Current End Date: 2025-11-30

Potential End Date: 2025-11-30 00:00:00

Last Modified: 2026-04-09

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