HHS awards $21.7M for nonresidential building leasing, with limited competition

Contract Overview

Contract Amount: $21,736,184 ($21.7M)

Contractor: 5600 Fishers Lane LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2020-02-23

End Date: 2025-08-31

Contract Duration: 2,016 days

Daily Burn Rate: $10.8K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 5600 FISHERS LANE AND SOUTH LOT PARKING

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $21.7 million to 5600 FISHERS LANE LLC for work described as: 5600 FISHERS LANE AND SOUTH LOT PARKING Key points: 1. Leasing services for federal facilities represent a significant operational cost. 2. The contract's duration and fixed-price nature suggest predictable budgeting. 3. Limited competition raises questions about potential overpayment and value. 4. The contractor's performance history and market rates are key to assessing value. 5. This contract falls within the broader category of real estate and facilities management for government agencies. 6. The geographic location in Maryland may influence local real estate market dynamics.

Value Assessment

Rating: fair

The contract value of $21.7 million over its period of performance appears substantial for leasing services. Without specific details on the square footage, location specifics, and amenities provided, a direct comparison to similar contracts is challenging. However, the absence of robust competition suggests that the government may not have secured the most competitive pricing. Benchmarking against prevailing market rates for comparable commercial real estate in the Rockville, Maryland area would be necessary to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed under the Simplified Acquisition Procedures (SAP), indicating it likely exceeded the SAP threshold. The 'NOT COMPETED UNDER SAP' designation, coupled with the 'DEFINITIVE CONTRACT' award type, suggests a procurement process that may have involved limited sources or a justification for other than full and open competition. The specific reasons for limited competition, such as specialized requirements or a lack of available bidders, are not detailed. This limited competition could potentially lead to higher prices than if a broader range of vendors had been solicited.

Taxpayer Impact: Limited competition means taxpayers may not have benefited from the lowest possible price achievable through a fully open bidding process. This could translate to a less efficient use of taxpayer funds if alternative, more cost-effective solutions were available but not considered.

Public Impact

The Department of Health and Human Services (HHS) benefits from secured office space. The services delivered include the leasing of nonresidential buildings, likely for administrative or operational purposes. The geographic impact is concentrated in Maryland, specifically Rockville, where the property is located. The contract supports the operational infrastructure of a key federal agency, indirectly impacting the workforce that relies on these facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for inflated costs due to limited competition.
Lack of transparency regarding the specific reasons for limited competition.
Uncertainty about whether the most cost-effective leasing solution was secured.

Positive Signals

The contract provides essential facilities for a major federal agency.
A firm-fixed-price contract offers budget predictability.
The contractor is identified, allowing for performance tracking.

Sector Analysis

This contract falls within the commercial real estate sector, specifically focusing on the leasing of nonresidential buildings. The North American Industry Classification System (NAICS) code 531120, 'Lessors of Nonresidential Buildings (except Miniwarehouses),' categorizes this activity. Government agencies are significant consumers of leased real estate, and spending in this area is influenced by federal real property management policies and local market conditions. Comparable spending benchmarks would involve analyzing lease agreements for similar government facilities in the same geographic region.

Small Business Impact

The data indicates that this contract was not awarded to a small business (sb: false) and does not appear to have a small business set-aside component. Therefore, there are no direct subcontracting implications for small businesses stemming from this specific award. The absence of small business participation in this particular contract does not preclude small businesses from competing on other, smaller procurements or from being involved in the broader real estate services market.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal contracting and procurement oversight mechanisms. The Office of the Assistant Secretary for Administration (ASA) is the contracting activity, suggesting internal administrative oversight. Transparency regarding the specific terms, performance metrics, and any modifications would be subject to Freedom of Information Act (FOIA) requests and agency reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Real Property Management
Government Office Space Leasing
Facilities Management Contracts
Department of Health and Human Services Operations

Risk Flags

Limited competition may lead to suboptimal pricing.
Lack of detailed performance metrics in summary data.
Contract duration extends beyond the initial award year, requiring ongoing monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $21.7 million to 5600 FISHERS LANE LLC. 5600 FISHERS LANE AND SOUTH LOT PARKING

Who is the contractor on this award?

The obligated recipient is 5600 FISHERS LANE LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $21.7 million.

What is the period of performance?

Start: 2020-02-23. End: 2025-08-31.

What is the specific square footage and type of facility being leased under this contract?

The provided data does not specify the exact square footage or the precise type of facility being leased beyond 'nonresidential buildings (except miniwarehouses)'. The contract value of $21.7 million suggests a significant space requirement. To fully assess the value and appropriateness of the contract, details on the leased premises, including size, location within the 5600 Fishers Lane complex, and any included amenities or services (e.g., utilities, maintenance), would be crucial. This information is typically found in the contract's statement of work or lease agreement.

What were the specific reasons for limiting the competition for this contract?

The data indicates the contract was 'NOT COMPETED UNDER SAP' and is a 'DEFINITIVE CONTRACT', suggesting it was not a small purchase and likely involved a limited number of sources or a justification for other than full and open competition. Common reasons for limited competition include specialized requirements that only one or a few contractors can meet, urgent needs, or situations where only one responsible source exists. Without further documentation (e.g., a Justification for Other Than Full and Open Competition - JOFOC), the precise rationale remains unclear. This lack of clarity hinders a full assessment of whether taxpayer funds were used efficiently.

How does the contract's price compare to market rates for similar leased properties in Rockville, Maryland?

Benchmarking the contract's price against market rates requires detailed information not present in the summary data, such as the exact square footage, lease term, included services (e.g., utilities, maintenance, janitorial), and specific location within Rockville, Maryland. The General Services Administration (GSA) often sets per-square-foot leasing rates for federal properties. A comparison would involve obtaining current market data for comparable commercial office spaces in the Rockville area and calculating a per-square-foot cost for this contract to see how it aligns with prevailing rates. Given the limited competition, there is a risk the price may be above market.

What is the track record of 5600 Fishers Lane LLC in providing similar leasing services to the federal government?

The provided data identifies '5600 Fishers Lane LLC' as the contractor. However, it does not offer details on their past performance, prior federal contracts, or specific experience in leasing nonresidential buildings. A thorough assessment would require reviewing the contractor's performance history, including any past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), previous contract awards, and their financial stability. This information is essential for understanding the reliability and capability of the contractor to fulfill the terms of the current agreement.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this lease agreement?

The summary data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, lease agreements for federal facilities would outline requirements related to building maintenance, safety standards, occupancy, utility provision, and response times for issues. The effectiveness of the contract and the value received by HHS would depend on the contractor's adherence to these performance standards. Information on KPIs and SLAs would be detailed within the contract's Statement of Work (SOW) or Performance Work Statement (PWS).

How does this contract's total value compare to historical federal spending on similar leasing services in Maryland?

The total contract value is $21.7 million over its period of performance (February 23, 2020, to August 31, 2025). To compare this to historical spending in Maryland, one would need access to federal procurement databases (like FPDS or USASpending.gov) to aggregate spending on NAICS code 531120 or similar facility leasing categories within the state over previous fiscal years. This analysis would help determine if this contract represents an increase or decrease in federal leasing expenditures in the region and whether spending patterns are consistent.

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: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 N WACKER DR STE 4025, CHICAGO, IL, 60606

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,080,084

Exercised Options: $21,736,184

Current Obligation: $21,736,184

Actual Outlays: $15,245,214

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline