State Department Awards $4.2M for Hotel Services to Lotte Hotel New York Palace, LLC
Contract Overview
Contract Amount: $4,225,133 ($4.2M)
Contractor: Lotte Hotel NEW York Palace, LLC
Awarding Agency: Department of State
Start Date: 2025-09-08
End Date: 2025-12-31
Contract Duration: 114 days
Daily Burn Rate: $37.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
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 $4.2 million to LOTTE HOTEL NEW YORK PALACE, LLC for work described as: HOTEL Key points: 1. Significant contract value of $4.2 million for hotel services. 2. Sole provider identified: Lotte Hotel New York Palace, LLC. 3. Contract duration of 114 days. 4. Potential risk due to lack of competition.
Value Assessment
Rating: questionable
The contract value of $4.2 million for 114 days of hotel services appears high without competitive bidding. Benchmarking against similar government hotel contracts in New York City is difficult without more detailed service specifications.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating no competition. This method limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition raises concerns about whether the government secured the best possible price for these hotel services.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Limited transparency on the necessity and specific services provided. Potential for future sole-source awards if this is not challenged.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Short contract duration
- Lack of detailed service description
Positive Signals
- Clear vendor identified
- Defined contract period
Sector Analysis
The hospitality sector, particularly hotels, sees significant government spending for temporary lodging, conferences, and events. Benchmarks vary widely based on location, service level, and duration.
Small Business Impact
This contract does not appear to involve small businesses, as it is a direct award to a large hotel entity.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and necessity. The Department of State should provide justification for the lack of competition.
Related Government Programs
- Hotels (except Casino Hotels) and Motels
- Department of State Contracting
- Department of State Programs
Risk Flags
- Sole-source award lacks competition.
- High contract value without clear justification.
- Potential for inflated pricing.
- Limited transparency on services provided.
Tags
hotels-except-casino-hotels-and-motels, department-of-state, ny, purchase-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $4.2 million to LOTTE HOTEL NEW YORK PALACE, LLC. HOTEL
Who is the contractor on this award?
The obligated recipient is LOTTE HOTEL NEW YORK PALACE, LLC.
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $4.2 million.
What is the period of performance?
Start: 2025-09-08. End: 2025-12-31.
What specific services are included in this $4.2 million hotel contract, and how were they justified as sole-source?
The provided data does not detail the specific services rendered under this contract, only the vendor and total value. Justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of other qualified sources. Without further information, it's impossible to assess the validity of the sole-source justification or the value proposition.
What is the per-diem rate or cost per room implied by this contract, and how does it compare to market rates?
The data does not provide a per-diem or per-room rate, making direct comparison to market rates impossible. The total award of $4,225,133.28 over 114 days suggests a significant daily expenditure, which warrants scrutiny, especially given the lack of competitive bidding. Further analysis would require breaking down the total cost by room nights or specific services.
What is the risk of overpayment or under-delivery given the sole-source nature and fixed-price contract?
The primary risk of overpayment stems directly from the sole-source award, as competition is absent to drive down prices. While a firm fixed-price contract aims to control costs, the lack of competitive benchmarking means the 'fixed' price might still be inflated. Under-delivery risk is mitigated by the fixed-price nature, but quality control and adherence to any unstated service levels remain potential concerns.
Industry Classification
NAICS: Accommodation and Food Services › Traveler Accommodation › Hotels (except Casino Hotels) and Motels
Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 455 MADISON AVE, NEW YORK, NY, 10022
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $4,225,133
Exercised Options: $4,225,133
Current Obligation: $4,225,133
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Timeline
Start Date: 2025-09-08
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2026-01-22
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