DHS awards $5.98M contract for real property services to SK2 LLC, a sole-source acquisition

Contract Overview

Contract Amount: $5,980,800 ($6.0M)

Contractor: SK2 LLC

Awarding Agency: Department of Homeland Security

Start Date: 2026-01-07

End Date: 2026-04-06

Contract Duration: 89 days

Daily Burn Rate: $67.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE PURPOSE OF THIS AWARD IS FOR THE ACQUISITION OF REAL PROPERTY SERVICES TO PURCHASE EXISTING STRUCTURES TO MEET ICE OPERATING REQUIREMENTS TO SUPPORT ICE-OAFM.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92154

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $6.0 million to SK2 LLC for work described as: THE PURPOSE OF THIS AWARD IS FOR THE ACQUISITION OF REAL PROPERTY SERVICES TO PURCHASE EXISTING STRUCTURES TO MEET ICE OPERATING REQUIREMENTS TO SUPPORT ICE-OAFM. Key points: 1. The contract is for acquiring existing structures to meet ICE operating requirements. 2. This is a sole-source award, indicating limited competition. 3. The contract duration is 89 days, suggesting a short-term need. 4. The firm fixed-price contract type aims to control costs. 5. The award is for real property services, a critical operational need for ICE. 6. The geographic focus is California.

Value Assessment

Rating: fair

The contract value of $5.98 million for 89 days of real property acquisition services appears high on a daily basis. Benchmarking against similar short-term real estate acquisition contracts is difficult without more specific service details. However, the price is fixed, which provides some cost certainty for the government. The value proposition hinges on the successful acquisition of suitable properties within the specified timeframe and budget.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that the Department of Homeland Security did not solicit bids from multiple offerors. This approach is typically used when only one source is capable of meeting the requirement, or in urgent situations. The lack of competition means that price discovery through market forces was not utilized, potentially leading to a higher price than if multiple bids were received.

Taxpayer Impact: For taxpayers, a sole-source award means that the government may not have achieved the lowest possible price for these real property services, as competitive pressures were absent.

Public Impact

U.S. Immigration and Customs Enforcement (ICE) will benefit from the acquisition of necessary real property. The services delivered will support ICE's operational requirements. The geographic impact is concentrated in California. The contract supports the operational infrastructure of a federal law enforcement agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Short contract duration may indicate an urgent or specific need that could be difficult to fulfill competitively.
Lack of detailed service description makes it hard to assess true value for money.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award supports critical operational needs for ICE.
Specific geographic focus (California) allows for targeted acquisition.

Sector Analysis

The real estate services sector involves brokers and agents facilitating property transactions. This contract falls under the 'Offices of Real Estate Agents and Brokers' NAICS code (531210). Federal agencies frequently procure real estate services for office space, operational facilities, and other property needs. The market size for such services is substantial, with numerous firms capable of providing these solutions. This contract represents a specific, short-term acquisition need within the broader federal real estate portfolio.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The award to SK2 LLC, without further information on the contractor's size, suggests it may not be a small business or that the specific nature of the requirement did not lend itself to a small business set-aside. The impact on the small business ecosystem is likely minimal given the sole-source nature and lack of explicit small business provisions.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Homeland Security, specifically U.S. Immigration and Customs Enforcement. As a definitive contract with a firm fixed price, the primary accountability measure is the successful delivery of the acquired real property services within the agreed-upon terms and budget. Transparency is limited due to the sole-source nature of the award. There is no specific mention of an Inspector General's jurisdiction for this particular award, though the DHS IG generally oversees agency spending.

Related Government Programs

Federal Real Estate Acquisition
Government Property Management
Law Enforcement Agency Support Services
Department of Homeland Security Operations

Risk Flags

Sole-source award
Lack of competition
High daily cost potential
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $6.0 million to SK2 LLC. THE PURPOSE OF THIS AWARD IS FOR THE ACQUISITION OF REAL PROPERTY SERVICES TO PURCHASE EXISTING STRUCTURES TO MEET ICE OPERATING REQUIREMENTS TO SUPPORT ICE-OAFM.

Who is the contractor on this award?

The obligated recipient is SK2 LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $6.0 million.

What is the period of performance?

Start: 2026-01-07. End: 2026-04-06.

What is the specific nature of the 'real property services' being acquired, and what criteria were used to justify a sole-source award?

The provided data indicates the purpose is 'ACQUISITION OF REAL PROPERTY SERVICES TO PURCHASE EXISTING STRUCTURES TO MEET ICE OPERATING REQUIREMENTS'. However, the specific services (e.g., property identification, negotiation, closing assistance, due diligence) are not detailed. A sole-source justification typically requires demonstrating that only one responsible source can provide the required services, often due to unique capabilities, urgent needs, or lack of market availability. Without the formal justification document, it's impossible to ascertain the precise reasons for bypassing full and open competition. This lack of transparency is a concern for value assessment.

How does the contract value of $5.98 million compare to similar real property acquisition contracts for federal agencies, particularly for short durations?

Direct comparison of the $5.98 million contract value for an 89-day duration is challenging without more granular data on the scope and complexity of the real property being acquired. Federal real estate acquisitions can vary significantly in cost based on location, size, condition, and the specific services required (e.g., site selection, environmental assessments, legal support). However, on a per-day basis, this contract represents a substantial expenditure. Benchmarking against similar sole-source, short-term acquisitions for critical infrastructure or operational facilities would be necessary for a more precise value assessment. The absence of competitive bidding further complicates a direct value-for-money comparison.

What are the potential risks associated with a sole-source acquisition of this magnitude for real property services?

The primary risk associated with a sole-source acquisition is the potential for overpayment due to the absence of competitive pricing. Without multiple bids, the government may not be achieving the best possible price. Other risks include limited vendor options if the sole source fails to perform, potential delays if unforeseen issues arise with the selected vendor, and reduced transparency in the procurement process. For real property acquisition, risks also extend to the quality and suitability of the acquired properties, the thoroughness of due diligence, and the efficiency of the closing process, all of which could be compromised without competitive scrutiny.

What is the track record of SK2 LLC in providing real property services to federal agencies, and have they been awarded sole-source contracts previously?

Information regarding SK2 LLC's track record in providing real property services to federal agencies, and specifically their history with sole-source awards, is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history databases (like SAM.gov or FPDS), and any available CPARS (Contractor Performance Assessment Reporting System) reports. Understanding their experience, past performance quality, and previous sole-source awards would help evaluate the risk and potential value of this current contract. Without this background, it's difficult to assess their reliability and pricing competitiveness.

What are the historical spending patterns of the Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) for real property acquisition services?

Analyzing historical spending patterns for real property acquisition by DHS and ICE would provide context for this $5.98 million award. This includes examining the frequency of such acquisitions, the typical contract values, the duration of similar contracts, and the procurement methods used (competitive vs. sole-source). Significant increases or deviations from historical spending could indicate changing operational needs, market conditions, or potential inefficiencies. Understanding past trends helps in assessing whether this contract aligns with established patterns or represents an anomaly requiring further investigation into its necessity and cost-effectiveness.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Offices of Real Estate Agents and Brokers › Offices of Real Estate Agents and Brokers

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

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: 273 AVE PONCE DE LEON STE 900, SAN JUAN, PR, 00917

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

Financial Breakdown

Contract Ceiling: $5,980,800

Exercised Options: $5,980,800

Current Obligation: $5,980,800

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline