ARPA-H secures flexible co-working space for $8M, with performance extending through November 2027

Contract Overview

Contract Amount: $8,004,972 ($8.0M)

Contractor: Hines GS Properties LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-11-16

End Date: 2027-11-30

Contract Duration: 1,475 days

Daily Burn Rate: $5.4K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS PERFORMANCE WORK STATEMENT DESCRIBES THE REQUIREMENT FOR FLEXIBLE CO-WORKING SPACE AS A SERVICE FOR ARPA-H IN THE NATIONAL CAPITAL REGION. THE CONTRACTOR SHALL PROVIDE FLEXIBLE CO-WORKING SPACE AS A SERVICE FOR THE DURATION OF THE PERFORMANCE PE

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $8.0 million to HINES GS PROPERTIES LLC for work described as: THIS PERFORMANCE WORK STATEMENT DESCRIBES THE REQUIREMENT FOR FLEXIBLE CO-WORKING SPACE AS A SERVICE FOR ARPA-H IN THE NATIONAL CAPITAL REGION. THE CONTRACTOR SHALL PROVIDE FLEXIBLE CO-WORKING SPACE AS A SERVICE FOR THE DURATION OF THE PERFORMANCE PE Key points: 1. The contract's value appears reasonable for flexible co-working space in the National Capital Region, considering market rates for similar services. 2. Competition dynamics indicate a potentially favorable outcome for the government, though specific details of the bidding process are limited. 3. Risk indicators are low, given the nature of the service and the established contractor. 4. Performance context suggests a need for adaptable workspace solutions to support ARPA-H's mission. 5. The contract positions ARPA-H within the broader federal real estate and facilities management sector.

Value Assessment

Rating: good

The contract value of approximately $8 million for flexible co-working space over nearly four years seems aligned with market expectations for the National Capital Region. Benchmarking against similar federal leases or commercial co-working solutions would provide a more precise value assessment. However, the fixed-price nature of the contract offers cost certainty to the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), suggesting a limited competition environment. While the specific number of bidders is not detailed, SAP is typically used for procurements below certain thresholds, often resulting in fewer offers than full and open competition. This approach can expedite the acquisition process but may limit the breadth of price discovery.

Taxpayer Impact: Limited competition under SAP may mean that taxpayers did not benefit from the most aggressive pricing achievable through a wider bidding pool. However, it also suggests the agency sought to meet its needs efficiently within regulatory parameters.

Public Impact

ARPA-H personnel will benefit from flexible and modern co-working facilities, potentially enhancing productivity and collaboration. The service delivered is adaptable workspace, catering to the evolving needs of a research and development agency. The geographic impact is concentrated in the National Capital Region, specifically the District of Columbia. Workforce implications include providing a conducive work environment for federal employees and potentially contractors supporting ARPA-H.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if space needs fluctuate significantly beyond initial projections.
Dependence on a single contractor for a critical operational need.
Limited transparency into the specific cost breakdown of the co-working services provided.

Positive Signals

Fixed-price contract provides cost predictability.
Clear performance period with defined end date.
Service addresses a specific, stated need for flexible workspace.

Sector Analysis

This contract falls within the broader federal real estate and facilities management sector, specifically addressing the growing demand for flexible and adaptable workspace solutions. The market for co-working and flexible office space has expanded significantly, driven by evolving work models. Comparable spending benchmarks for federal leases in the DC area would typically be assessed based on square footage and lease duration, but this 'space as a service' model introduces a different valuation approach.

Small Business Impact

The provided 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 impacts on the small business ecosystem stemming from this particular award. The primary contractor, HINES GS PROPERTIES LLC, is likely a larger entity.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and the relevant program officials within ARPA-H and the National Institutes of Health (NIH). Accountability measures are embedded in the firm-fixed-price contract terms, requiring the delivery of specified services. Transparency is generally maintained through contract databases, although detailed operational oversight specifics are not publicly available.

Related Government Programs

Federal Real Property Management
Government Workspace Solutions
Agency Support Services
Research and Development Facilities

Risk Flags

Limited Competition
Potential for Scope Creep
Vendor Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $8.0 million to HINES GS PROPERTIES LLC. THIS PERFORMANCE WORK STATEMENT DESCRIBES THE REQUIREMENT FOR FLEXIBLE CO-WORKING SPACE AS A SERVICE FOR ARPA-H IN THE NATIONAL CAPITAL REGION. THE CONTRACTOR SHALL PROVIDE FLEXIBLE CO-WORKING SPACE AS A SERVICE FOR THE DURATION OF THE PERFORMANCE PE

Who is the contractor on this award?

The obligated recipient is HINES GS PROPERTIES 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 $8.0 million.

What is the period of performance?

Start: 2023-11-16. End: 2027-11-30.

What is the track record of HINES GS PROPERTIES LLC in providing similar flexible co-working space services to federal agencies?

Information regarding HINES GS PROPERTIES LLC's specific track record in providing flexible co-working space as a service to federal agencies is not detailed in the provided data. However, Hines is a well-established global real estate investment, development, and property-management firm with a significant portfolio. Their experience likely extends to managing commercial properties that could be adapted for co-working. Further investigation into their federal contract history, particularly with agencies like NIH or ARPA-H, would be necessary to fully assess their performance in this specific service area. Publicly available contract databases and agency performance reviews could offer more insight.

How does the per-square-foot cost of this co-working space compare to market rates in the National Capital Region?

The provided data does not include the square footage or a detailed breakdown of costs, making a direct per-square-foot comparison to market rates challenging. The total contract value is approximately $8 million over a period of roughly 1475 days (from Nov 2023 to Nov 2027). To perform a benchmark, one would need to estimate the total square footage provided and the occupancy levels. Commercial co-working space rates in the DC area can vary widely based on location, amenities, and membership type, ranging from $300 to $700+ per person per month. Without these specifics, it's difficult to definitively state if the $8 million represents a competitive per-square-foot cost.

What are the primary risks associated with this 'space as a service' model for ARPA-H?

The primary risks associated with this 'space as a service' model for ARPA-H include potential inflexibility if the agency's space needs change drastically and rapidly beyond what the service agreement can accommodate. There's also a risk of vendor lock-in, where switching providers might be costly or disruptive. Furthermore, the government's control over the physical space, its security, and its customization might be less direct compared to owning or long-term leasing traditional office space. Ensuring the service provider maintains high standards for uptime, security, and amenities is crucial to mitigate operational risks.

How does this contract align with ARPA-H's mission and operational requirements?

This contract directly aligns with ARPA-H's mission by providing flexible and potentially agile workspace solutions. As an agency focused on high-risk, high-reward research, ARPA-H may require adaptable facilities that can accommodate evolving project teams, varying numbers of personnel, and a dynamic work environment. Flexible co-working space offers the ability to scale resources up or down more easily than traditional leases, supporting the agency's need for responsiveness and innovation. The location in the National Capital Region also places it strategically within a hub of research, policy, and federal activity.

What is the historical spending trend for flexible workspace solutions by the Department of Health and Human Services (HHS) or its sub-agencies like NIH?

Historical spending data specifically on 'flexible co-working space as a service' for HHS or NIH is not provided. However, federal agencies, including HHS and its components like NIH, have historically spent significant amounts on real estate acquisition, leasing, and facility management. The trend towards flexible work arrangements and the increasing adoption of co-working models across the government suggest that spending in this category may be growing. Analyzing broader categories like 'facility support services' or 'rental payments' for HHS/NIH over several years would be necessary to identify any upward trend in flexible workspace utilization.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Lessors of Real Estate › Lessors of Nonresidential Buildings (except Miniwarehouses)

Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 75N99223Q00004

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 845 TEXAS ST STE 3300, HOUSTON, TX, 77002

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

Financial Breakdown

Contract Ceiling: $10,968,597

Exercised Options: $8,004,972

Current Obligation: $8,004,972

Actual Outlays: $5,619,082

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline