HHS awards $22.8M for water systems, with 3 bids received under SAP

Contract Overview

Contract Amount: $22,845 ($22.8K)

Contractor: Rotem Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-01-15

End Date: 2020-04-14

Contract Duration: 90 days

Daily Burn Rate: $254/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ROTEM INC.:1240202 [20-000122]

Place of Performance

Location: TOPSFIELD, ESSEX County, MASSACHUSETTS, 01983

State: Massachusetts Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $22,845.21 to ROTEM INC for work described as: ROTEM INC.:1240202 [20-000122] Key points: 1. Contract awarded via a competitive process under the Simplified Acquisition Procedures (SAP). 2. The contract value of $22.8 million is for a 90-day duration. 3. Fixed-price contract type suggests cost certainty for the government. 4. The award was made to ROTEM INC. for water supply and irrigation systems. 5. The National Institutes of Health (NIH) is the awarding agency. 6. The contract was awarded in Massachusetts.

Value Assessment

Rating: fair

The contract value of $22.8 million for a 90-day period appears high for water supply and irrigation systems, especially given the limited competition. Without more detailed scope of work and performance metrics, it is difficult to benchmark the value for money effectively. The fixed-price nature provides some cost control, but the overall cost per day is substantial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), which typically involves fewer bidders than full and open competition. Three bids were received, indicating some level of competition, but it is not as robust as a full and open solicitation. The SAP process is designed for smaller dollar value procurements, and the use here for a $22.8 million contract warrants further scrutiny regarding justification.

Taxpayer Impact: The limited competition under SAP for a contract of this magnitude may have resulted in a higher price for taxpayers than if it had been competed more broadly.

Public Impact

The primary beneficiaries are likely facilities or research operations managed by the National Institutes of Health (NIH) that require reliable water supply and irrigation systems. The services delivered involve the maintenance, repair, or upgrade of critical water infrastructure. The geographic impact is localized to Massachusetts, where the contract was awarded and likely performed. Workforce implications could include employment for skilled trades in plumbing, irrigation, and system maintenance within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value for a short duration may indicate potential overpricing or an urgent, complex need.
Competition under SAP for a $22.8M award raises questions about whether full and open competition was explored or justified.
Lack of detailed performance metrics makes it difficult to assess the true value for money.
The specific nature of 'Water Supply and Irrigation Systems' is broad and could encompass a wide range of complexities and costs.

Positive Signals

The contract was competed, indicating an effort to obtain multiple offers.
The fixed-price contract type helps to control costs and provides budget certainty.
Award to a single contractor (ROTEM INC.) suggests a potentially specialized capability or a streamlined award process.

Sector Analysis

The water supply and irrigation systems sector within federal contracting encompasses a range of services from maintenance and repair to the installation of new infrastructure. This contract falls under the broader category of facilities maintenance and operations. Comparable spending benchmarks for such services can vary significantly based on the scale and complexity of the systems involved. Federal agencies often procure these services to ensure the operational continuity of their facilities and research environments.

Small Business Impact

There is no indication from the provided data that this contract was set aside for small businesses, nor is there information on subcontracting plans. The award to ROTEM INC. does not specify if it is a small or large business. Further investigation would be needed to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the National Institutes of Health. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified goods or services. Transparency is generally facilitated through contract databases, though detailed performance reports may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Facilities Maintenance Contracts
Public Health Infrastructure Support
Research Facility Operations
Water Management Services

Risk Flags

Potential for inflated pricing due to limited competition under SAP.
Questionable use of SAP for a contract value significantly exceeding typical thresholds.
Lack of detailed performance metrics to assess value for money.
Uncertainty regarding contractor's past performance on similar large-scale projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $22,845.21 to ROTEM INC. ROTEM INC.:1240202 [20-000122]

Who is the contractor on this award?

The obligated recipient is ROTEM INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $22,845.21.

What is the period of performance?

Start: 2020-01-15. End: 2020-04-14.

What is the specific scope of work for these water supply and irrigation systems, and how does it justify the $22.8 million cost for a 90-day period?

The provided data does not detail the specific scope of work for the 'Water Supply and Irrigation Systems' contract awarded to ROTEM INC. The value of $22.8 million for a 90-day duration is substantial and suggests a significant undertaking, potentially involving emergency repairs, large-scale system upgrades, or the provision of complex water management services for critical NIH facilities. Without a detailed statement of work, performance work statement, or task orders, it is impossible to ascertain the precise activities covered and thus to definitively justify the cost. Factors that could contribute to such a high cost might include specialized equipment, hazardous material handling, extensive labor requirements, or the critical nature of the facilities being supported, demanding rapid and comprehensive solutions.

Why was this contract competed under Simplified Acquisition Procedures (SAP) given its $22.8 million value, and what is the justification for not using full and open competition?

The decision to compete a contract valued at $22.8 million under Simplified Acquisition Procedures (SAP) is unusual, as SAP is typically intended for procurements valued below the statutory threshold for simplified acquisition (currently $250,000, though this can be higher for certain agencies or circumstances). Federal Acquisition Regulation (FAR) Part 13 outlines SAP, and while it allows for flexibility, a contract of this magnitude would normally warrant a more robust competition. There might be specific justifications, such as urgent and compelling needs, unique circumstances, or specific agency authorities that permit the use of SAP for higher dollar values. However, without explicit documentation or a justification for other than full and open competition (JOFOC) or a determination and findings (D&F) supporting the use of SAP for this value, it raises concerns about whether the government obtained the best possible value and whether competition was unnecessarily restricted.

How does the pricing of this contract compare to similar water supply and irrigation system contracts awarded by the federal government?

Benchmarking the pricing of this $22.8 million contract for a 90-day period against similar federal contracts for water supply and irrigation systems is challenging without more specific details on the scope of work, location, and duration. However, the cost per day ($253,822) appears high for standard maintenance or routine services. If this contract involved emergency response, extensive infrastructure replacement, or support for highly specialized research facilities with unique water requirements, the cost might be more justifiable. A comprehensive analysis would require comparing it to contracts with similar technical requirements, geographic locations, and contract types (e.g., firm-fixed-price). Given the limited competition, it is plausible that the price may not be as competitive as it could have been under a broader solicitation.

What are the potential risks associated with awarding a large-value contract under SAP with limited competition?

Awarding a contract of this magnitude ($22.8 million) under SAP with only three bidders presents several potential risks. Firstly, limited competition can lead to higher prices for the government, as the contractor may face less pressure to offer competitive rates. Secondly, the pool of potential offerors is restricted, increasing the risk that the government may not select the offeror with the best overall value, technical capability, or innovative solution. Thirdly, the use of SAP for such a large contract might indicate a deviation from standard procurement practices, potentially increasing the risk of protest or audit if not properly justified. Finally, without a thorough evaluation process typical of larger, full-and-open competitions, there's a heightened risk of selecting a contractor that may not fully meet the complex requirements or deliver the expected performance, leading to potential cost overruns or schedule delays.

What is the track record of ROTEM INC. in performing federal contracts, particularly those related to water systems or infrastructure?

Information regarding the specific track record of ROTEM INC. in performing federal contracts, especially those related to water supply and irrigation systems, is not detailed in the provided data snippet. To assess their capability and past performance, one would typically consult the Federal Awardee Performance and Integrity Information System (FAPIIS) and review past performance evaluations within the System for Award Management (SAM). A thorough review would examine their history of on-time delivery, quality of work, cost control, and compliance with contract terms on previous government projects. Without this information, it's difficult to gauge their reliability and expertise for this specific $22.8 million award.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Water Supply and Irrigation Systems

Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 461 BOSTON ST STE D5, TOPSFIELD, MA, 01983

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $22,845

Exercised Options: $22,845

Current Obligation: $22,845

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline