HHS awards $240K for logistics consulting, raising questions about competition and value

Contract Overview

Contract Amount: $24,000 ($24.0K)

Contractor: THE ART of Space LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-01-01

End Date: 2024-12-31

Contract Duration: 365 days

Daily Burn Rate: $66/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE ART OF SPACE LLC:1125930 [24-000090]

Place of Performance

Location: POTOMAC, MONTGOMERY County, MARYLAND, 20854

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $24,000 to THE ART OF SPACE LLC for work described as: THE ART OF SPACE LLC:1125930 [24-000090] Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Limited competition raises concerns about whether the government secured the best possible value. 3. The fixed-price contract type offers some cost certainty but doesn't mitigate sole-source risks. 4. The contract duration of one year suggests a need for ongoing services. 5. The small value of the contract may indicate a specific, niche requirement. 6. The contractor, THE ART OF SPACE LLC, is receiving its first federal award of this type.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of 'Process, Physical Distribution, and Logistics Consulting Services.' Without competitive bids, it's difficult to assess if the $240,000 price represents fair market value. Compared to other federal consulting contracts, this award appears to be on the smaller side, which could indicate a focused scope or a pilot project. Further analysis would require understanding the specific deliverables and the contractor's proposed approach.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required services, often due to unique capabilities or proprietary technology. The lack of competition means that taxpayers did not benefit from the price reductions and innovation that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no market pressure to drive down costs. It also limits opportunities for other businesses to compete for federal dollars.

Public Impact

The Department of Health and Human Services (HHS) is the primary beneficiary, receiving specialized logistics consulting. The services delivered are expected to improve processes related to physical distribution and logistics within NIH. The geographic impact is likely concentrated within Maryland, where the contractor is located. Workforce implications are minimal, as this is a consulting service rather than a large-scale operational contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source award limits transparency in the procurement process.
Scope of services is not clearly defined in the provided data, making value assessment difficult.

Positive Signals

Contract is for a defined period, allowing for reassessment of needs.
Fixed-price contract provides some cost predictability.
Award to a single entity may streamline communication and project management for this specific need.

Sector Analysis

The federal consulting services market is diverse, encompassing a wide range of expertise. Logistics consulting, specifically within the healthcare sector, is crucial for efficient operations, supply chain management, and distribution of medical supplies and research materials. While specific benchmarks for 'Process, Physical Distribution, and Logistics Consulting Services' are not readily available, the overall federal IT and professional services market is substantial, with agencies frequently procuring such expertise to optimize operations and achieve strategic goals.

Small Business Impact

This contract was not set aside for small businesses, nor does the data indicate any subcontracting requirements. As a sole-source award, it bypasses the typical mechanisms for engaging small businesses in federal contracting. The impact on the small business ecosystem is therefore neutral to negative, as opportunities were not specifically created or directed towards them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services' internal procurement and program management offices. As a purchase order, it is a less formal instrument than a large contract, but still subject to federal acquisition regulations. Transparency is limited due to the sole-source nature. There is no specific mention of an Inspector General's involvement at this stage, but their jurisdiction could be invoked if performance issues or fraud were suspected.

Related Government Programs

Federal Supply Schedule (FSS) Professional Services
Logistics and Supply Chain Management Consulting
Healthcare Administration Support Services
Management and Financial Consulting, Acquisition and Technology Services

Risk Flags

Sole-source award lacks competitive justification.
Limited data on contractor's federal performance history.
Scope of services not fully detailed, hindering value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $24,000 to THE ART OF SPACE LLC. THE ART OF SPACE LLC:1125930 [24-000090]

Who is the contractor on this award?

The obligated recipient is THE ART OF SPACE LLC.

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 $24,000.

What is the period of performance?

Start: 2024-01-01. End: 2024-12-31.

What specific logistics challenges is NIH attempting to address with this contract?

The provided data indicates the contract is for 'Process, Physical Distribution, and Logistics Consulting Services' awarded to THE ART OF SPACE LLC. However, the specific challenges or objectives driving this need are not detailed. Typically, such consulting engagements aim to optimize supply chains, improve inventory management, streamline the movement of goods (potentially including research materials, equipment, or pharmaceuticals), reduce operational costs, and enhance overall efficiency within the agency's distribution networks. Without further documentation, the precise nature of NIH's logistics issues remains speculative.

Why was this contract awarded on a sole-source basis?

The data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. Federal regulations permit sole-source procurements under specific circumstances, such as when only one responsible source is available or capable of providing the required services. This could be due to unique expertise, proprietary technology, or a critical need that cannot be met through competition within the required timeframe. The justification for this specific sole-source award would be documented in the contract file, but is not provided here. This lack of competition raises concerns about potential price inflation and missed opportunities for other qualified vendors.

What is the track record of THE ART OF SPACE LLC with federal contracts?

Based on the provided data, this award to THE ART OF SPACE LLC for $240,000 appears to be their first federal contract. The data indicates 'no' for prior awards of this nature. This lack of federal contracting history means there is limited public information available to assess their past performance, reliability, or experience in delivering services to government agencies. Future performance will be crucial in establishing their track record within the federal space.

How does the $240,000 award amount compare to similar federal logistics consulting contracts?

The $240,000 award is relatively small compared to many federal consulting contracts, especially those awarded through competitive processes. Larger, competed contracts for comprehensive logistics or supply chain optimization can range from millions to tens of millions of dollars. This smaller value suggests that the scope of work for THE ART OF SPACE LLC is likely focused and specific, perhaps addressing a particular process improvement or a limited-duration project. Without knowing the exact deliverables, a direct comparison is difficult, but its size suggests a niche requirement rather than a broad strategic overhaul.

What are the potential risks associated with a sole-source award for consulting services?

The primary risks associated with a sole-source award for consulting services include a lack of price competition, which can lead to overpayment. There's also a risk that the chosen contractor may not be the most innovative or best-suited vendor available, as the government did not explore the broader market. Furthermore, without a competitive process, there may be less incentive for the contractor to deliver exceptional value or to be highly responsive to the client's needs. Transparency is also reduced, making it harder for oversight bodies and the public to scrutinize the procurement decision and ensure fairness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: 11140 KORMAN DR, POTOMAC, MD, 20854

Business Categories: Category Business, Limited Liability Corporation, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $24,000

Exercised Options: $24,000

Current Obligation: $24,000

Actual Outlays: $23,975

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline