NIH awards $5.4M contract for cooling tower filters, impacting facility maintenance and operational efficiency

Contract Overview

Contract Amount: $5,448,723 ($5.4M)

Contractor: Olgoonik Enterprises, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-08-17

End Date: 2026-03-31

Contract Duration: 957 days

Daily Burn Rate: $5.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: C112352/C112353 DESCRIPTION - SIDE STREAM FILTERS FOR GROUPS 4 AND 5 COOLING TOWERS #24-#27 AT CENTRAL UTILITY PLANT (CUP), BUILDING 11 BASE AWARD CO - DAN BURK CS - DAVE SEID COR - ANDREW GOMES VENDOR POC - DAVID FREDERICK

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $5.4 million to OLGOONIK ENTERPRISES, LLC for work described as: C112352/C112353 DESCRIPTION - SIDE STREAM FILTERS FOR GROUPS 4 AND 5 COOLING TOWERS #24-#27 AT CENTRAL UTILITY PLANT (CUP), BUILDING 11 BASE AWARD CO - DAN BURK CS - DAVE SEID COR - ANDREW GOMES VENDOR POC - DAVID FREDERICK Key points: 1. The contract focuses on essential maintenance for critical infrastructure, ensuring the continued operation of cooling towers. 2. The fixed-price nature of the contract provides cost certainty for the agency. 3. The duration of the contract suggests a long-term need for these specialized filters. 4. The vendor, Olgoonik Enterprises, LLC, is a key supplier for this specific maintenance requirement. 5. The procurement method indicates a potential lack of readily available alternatives or a need for specialized expertise.

Value Assessment

Rating: fair

The contract value of $5.4 million for side stream filters over approximately 3 years appears to be within a reasonable range for specialized industrial equipment maintenance. Benchmarking against similar large-scale facility maintenance contracts for federal buildings would provide a clearer picture of value for money. Without specific details on the filter types, quantities, and installation complexity, a precise comparison is challenging. However, the fixed-price structure suggests an attempt to control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that the agency identified Olgoonik Enterprises, LLC as the only capable or appropriate source for these specific side stream filters for the Central Utility Plant cooling towers. This could be due to proprietary technology, unique specifications, or a lack of other qualified vendors in the market for this particular requirement. The absence of a competitive bidding process means that price discovery through market forces was not utilized.

Taxpayer Impact: Sole-source awards can sometimes lead to higher prices for taxpayers if competition is artificially limited or if the sole source does not face market pressure to offer competitive pricing.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) facilities, ensuring the reliable operation of their Central Utility Plant. The services delivered include the provision and potential installation of critical side stream filters for cooling towers. The geographic impact is localized to the NIH campus in Maryland, where the Central Utility Plant is located. This contract supports the operational workforce responsible for maintaining the facility's HVAC and cooling systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for higher costs due to sole-source award.
Dependence on a single vendor for critical maintenance components.
Lack of transparency in the selection process due to sole-source nature.

Positive Signals

Ensures continuity of essential cooling tower operations.
Fixed-price contract provides budget predictability.
Vendor likely possesses specialized knowledge for this specific equipment.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically related to the maintenance and operational support of critical infrastructure within large federal facilities. The market for specialized HVAC components and maintenance services can be niche, with a limited number of providers capable of meeting stringent federal requirements. Spending on facility maintenance is a consistent part of federal agency budgets, ensuring the longevity and functionality of government buildings and their systems.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary contractor, Olgoonik Enterprises, LLC, is either a large business or the nature of the specialized filters and services did not lend itself to small business participation in this instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal procurement and financial management systems. The National Institutes of Health would be responsible for monitoring contract performance and ensuring compliance with terms and conditions. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Federal Building Maintenance Contracts
HVAC System Maintenance
Critical Infrastructure Support
Cooling Tower Services
Government Facility Operations

Risk Flags

Sole-source award may limit price competition.
Potential for vendor lock-in.
Dependence on a single supplier for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $5.4 million to OLGOONIK ENTERPRISES, LLC. C112352/C112353 DESCRIPTION - SIDE STREAM FILTERS FOR GROUPS 4 AND 5 COOLING TOWERS #24-#27 AT CENTRAL UTILITY PLANT (CUP), BUILDING 11 BASE AWARD CO - DAN BURK CS - DAVE SEID COR - ANDREW GOMES VENDOR POC - DAVID FREDERICK

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 $5.4 million.

What is the period of performance?

Start: 2023-08-17. End: 2026-03-31.

What is the track record of Olgoonik Enterprises, LLC in performing similar federal contracts, particularly for HVAC maintenance or specialized filter provision?

A review of federal procurement data would be necessary to fully assess Olgoonik Enterprises, LLC's track record. Information on past performance, including contract values, agencies served, and performance ratings, would indicate their experience and reliability. Without specific data on prior similar contracts, it's difficult to definitively state their expertise. However, being awarded a sole-source contract for critical infrastructure components suggests a level of trust or unique capability recognized by the agency. Further investigation into their contract history, including any past performance issues or commendations, would provide a more comprehensive understanding of their capabilities and suitability for this role.

How does the $5.4 million contract value compare to market rates for similar side stream filters and installation services for large-scale cooling towers?

Benchmarking the $5.4 million contract value against market rates requires detailed specifications of the filters (type, size, filtration efficiency) and the scope of services (installation, maintenance, duration). Generally, specialized industrial filters for large-scale cooling towers, especially those for critical facilities like NIH, can be costly due to material quality, performance requirements, and the need for reliable suppliers. A sole-source award, however, removes the competitive pressure that typically drives prices down. To assess value, one would need to compare this contract's per-unit costs or total cost against quotes from multiple vendors for comparable equipment and services, or against historical data for similar procurements by other federal agencies or large private institutions. Without such comparative data, it's challenging to definitively state if this represents excellent or questionable value.

What are the specific risks associated with a sole-source award for critical cooling tower components?

The primary risks associated with a sole-source award for critical cooling tower components include potential overpricing due to the lack of competition, limited vendor options if performance issues arise, and a reduced incentive for the sole provider to innovate or offer cost-saving measures. Taxpayers may bear a higher cost compared to a competitively bid contract. Furthermore, reliance on a single vendor can create supply chain vulnerabilities. If the vendor experiences production issues, financial instability, or decides to discontinue the product line, the agency could face significant operational disruptions. Robust contract management and clear performance expectations are crucial to mitigate these risks.

How effective are side stream filters in maintaining the operational efficiency and longevity of large cooling tower systems at federal facilities?

Side stream filters play a crucial role in maintaining the operational efficiency and longevity of large cooling tower systems. They are designed to remove suspended solids, scale, and biological growth from the circulating water, which can otherwise lead to reduced heat transfer efficiency, increased energy consumption, corrosion, and fouling of system components. By continuously filtering a portion of the system's water, side stream filters help prevent the buildup of contaminants that can impair performance and necessitate costly repairs or premature system replacement. Their effectiveness is directly linked to proper selection, installation, and regular maintenance, contributing significantly to the overall reliability and cost-effectiveness of the cooling system.

What is the historical spending pattern for cooling tower maintenance and filter replacement at the NIH Central Utility Plant?

Analyzing historical spending patterns for cooling tower maintenance and filter replacement at the NIH Central Utility Plant would provide valuable context for the current $5.4 million award. This would involve examining past contracts for similar services, noting the frequency, duration, and total expenditure over several fiscal years. Understanding historical trends can reveal whether spending has been consistent, increasing, or decreasing, and whether previous contracts were also sole-source or competitively bid. Such analysis helps in identifying potential cost escalations, assessing the long-term financial commitment, and evaluating the agency's procurement strategies for essential facility maintenance over time.

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

Solicitation ID: 75N99023R00081

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: $5,448,723

Exercised Options: $5,448,723

Current Obligation: $5,448,723

Actual Outlays: $4,906,944

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline