HHS awards $3.9M for switchgear surge protection, with limited competition and potential for cost overruns

Contract Overview

Contract Amount: $3,918,548 ($3.9M)

Contractor: Olgoonik Enterprises, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-08-23

End Date: 2026-12-30

Contract Duration: 1,225 days

Daily Burn Rate: $3.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: C115709 & C112985- DESIGN/BUILD SWITCHGEAR SURGE PROTECTION SYSTEM TO SHIELD ELECTRICAL VAULTS IN BUILDING 10 & FACNET SECURITIZATION RELATING TO NESS

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20810

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.9 million to OLGOONIK ENTERPRISES, LLC for work described as: C115709 & C112985- DESIGN/BUILD SWITCHGEAR SURGE PROTECTION SYSTEM TO SHIELD ELECTRICAL VAULTS IN BUILDING 10 & FACNET SECURITIZATION RELATING TO NESS Key points: 1. The contract's fixed-price nature aims to control costs, but the lack of robust competition raises concerns about optimal pricing. 2. Limited competition suggests potential for higher prices than if multiple bidders were involved. 3. The project's duration and scope present moderate execution risks. 4. This contract supports critical infrastructure protection at NIH facilities. 5. The awardee has a limited track record on large federal contracts. 6. The contract is a definitive contract, indicating a firm commitment for services.

Value Assessment

Rating: fair

The contract value of $3.9 million for switchgear surge protection is within a typical range for such specialized infrastructure projects. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar government contracts. The firm-fixed-price structure provides cost certainty, but the absence of competition may mean the government is not achieving the best possible value. Further analysis of the contractor's proposed costs against industry standards would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed openly, falling under a limited competition category. This suggests that only a select group of contractors were solicited or eligible to bid. The specific reasons for this limitation (e.g., unique capabilities, urgent need) are not detailed. A limited competition can lead to less aggressive pricing and potentially fewer innovative solutions compared to full and open competition, as the contractor may face less pressure to offer the most competitive bid.

Taxpayer Impact: Limited competition means taxpayers may not be benefiting from the most cost-effective solution available in the market. The government might be paying a premium due to the restricted bidding pool.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH), which will receive enhanced protection for its electrical vaults. The services delivered include the design and build of a switchgear surge protection system. The geographic impact is localized to NIH facilities in Maryland. The contract supports specialized construction and engineering roles, potentially impacting the local workforce in Maryland.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
The contractor's track record on similar large-scale federal projects is not extensive, posing potential execution risks.
The specific technical requirements might be complex, increasing the risk of delays or cost overruns if not managed effectively.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government.
The project addresses a critical need for infrastructure security at NIH facilities.
The contract is awarded to a specific entity, indicating a clear point of accountability.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on specialized electrical infrastructure. The market for such services is driven by government and private sector investments in maintaining and upgrading critical facilities. Comparable spending benchmarks for surge protection systems can vary widely based on system complexity, scale, and the specific facility requirements. The $3.9 million award is a moderate-sized contract within this niche.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this particular award. The focus appears to be on securing specialized services from a contractor deemed capable, rather than prioritizing small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant program officials within the National Institutes of Health. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through federal contract databases, though detailed project progress reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

NIH Facilities Management Contracts
Federal Building Infrastructure Modernization
Electrical Systems Upgrades
Critical Infrastructure Protection Programs

Risk Flags

Limited Competition
Contractor Performance Risk
Potential for Cost Overruns
Lack of Benchmarking Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.9 million to OLGOONIK ENTERPRISES, LLC. C115709 & C112985- DESIGN/BUILD SWITCHGEAR SURGE PROTECTION SYSTEM TO SHIELD ELECTRICAL VAULTS IN BUILDING 10 & FACNET SECURITIZATION RELATING TO NESS

Who is the contractor on this award?

The obligated recipient is OLGOONIK ENTERPRISES, 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 $3.9 million.

What is the period of performance?

Start: 2023-08-23. End: 2026-12-30.

What is the track record of Olgoonik Enterprises, LLC on similar federal contracts?

Olgoonik Enterprises, LLC has a limited track record specifically on large-scale federal design-build projects for critical infrastructure like switchgear surge protection systems. While they may have experience in construction, the scale and technical specificity of this $3.9 million contract require a detailed review of their past performance. Federal procurement data should be consulted to ascertain the number and size of previous contracts, client satisfaction ratings, and any history of performance issues or disputes. Without extensive relevant experience, there is an elevated risk associated with project execution and adherence to schedule and budget.

How does the $3.9 million contract value compare to similar surge protection system projects?

Benchmarking the $3.9 million contract value for a switchgear surge protection system is challenging without more specific details on the system's scope, complexity, and the exact facilities being protected. However, for critical infrastructure projects of this nature, the value appears to be within a reasonable range, especially considering it includes both design and build phases. The absence of competitive bidding, however, prevents a definitive assessment of whether this represents optimal value for money. Similar projects awarded under full and open competition could offer a more accurate price comparison point, but such data is not readily available for this specific award.

What are the primary risks associated with this contract?

The primary risks associated with this contract include: 1. **Execution Risk:** The contractor, Olgoonik Enterprises, LLC, may have limited experience with projects of this specific scale and technical complexity, potentially leading to delays or cost overruns. 2. **Cost Risk:** Due to the limited competition, the government may not have secured the most cost-effective solution, potentially leading to a higher-than-market price. 3. **Technical Risk:** The design and implementation of surge protection systems require specialized expertise, and any missteps could compromise the effectiveness of the protection. 4. **Schedule Risk:** The project duration of over 1200 days presents inherent risks of unforeseen issues impacting timely completion.

How effective is the oversight mechanism for this contract?

The effectiveness of oversight for this contract depends on the diligence of the contracting officer and the NIH program team. The firm-fixed-price structure provides a clear financial boundary, but oversight must focus on ensuring the contractor meets all technical specifications, quality standards, and delivery schedules. Regular progress reviews, site inspections, and performance monitoring are crucial. The limited competition aspect means that oversight should be particularly vigilant in ensuring the contractor is meeting all contractual obligations without the inherent checks and balances that robust competition provides. Transparency through public reporting of progress and outcomes would further enhance oversight.

What is the historical spending pattern for switchgear surge protection at NIH?

Historical spending patterns for switchgear surge protection at the National Institutes of Health (NIH) are not detailed in the provided data. To assess this, one would need to analyze past federal procurement records for similar contracts awarded by NIH or other agencies for electrical vault protection and surge suppression systems. This analysis would involve identifying the frequency of such awards, their average dollar values, the types of contracts used (e.g., competitive vs. sole-source), and the contractors typically involved. Understanding historical spending can help contextualize the current $3.9 million award and identify any trends or anomalies in procurement behavior.

What are the implications of the 'NOT AVAILABLE FOR COMPETITION' status?

The 'NOT AVAILABLE FOR COMPETITION' status, indicated by 'CT: NOT AVAILABLE FOR COMPETITION', signifies that this contract was not awarded through a competitive bidding process. This typically occurs when only one source is capable of meeting the government's requirements, or in specific circumstances like urgent and compelling needs, or when a contract is a follow-on to a previously competed effort where only one contractor possesses the necessary knowledge or proprietary data. For taxpayers, this status raises concerns about potential overpricing and a lack of market-driven cost efficiencies, as the government did not leverage the benefits of multiple bids to secure the best possible value.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3201 C ST STE 700, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,918,548

Exercised Options: $3,918,548

Current Obligation: $3,918,548

Actual Outlays: $2,936,068

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline