NASA awards $5.8M contract for industrial gases, highlighting a need for critical life support and research materials
Contract Overview
Contract Amount: $5,825,021 ($5.8M)
Contractor: AIR Products and Chemicals, Inc
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2024-07-19
End Date: 2029-06-30
Contract Duration: 1,807 days
Daily Burn Rate: $3.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: THE PURPOSE OF THIS PROCUREMENT IS FOR LIQUID NITROGEN AND LIQUID OXYGEN.
Place of Performance
Location: ALLENTOWN, LEHIGH County, PENNSYLVANIA, 18106
Plain-Language Summary
National Aeronautics and Space Administration obligated $5.8 million to AIR PRODUCTS AND CHEMICALS, INC for work described as: THE PURPOSE OF THIS PROCUREMENT IS FOR LIQUID NITROGEN AND LIQUID OXYGEN. Key points: 1. Contract focuses on essential industrial gases, crucial for NASA's research and operational needs. 2. The procurement method was full and open competition, suggesting a competitive market for these specialized gases. 3. A firm-fixed-price contract type indicates predictable costs for the government. 4. The contract duration spans over five years, ensuring a stable supply chain for critical materials. 5. The awarded amount is modest relative to the extensive needs of a federal agency like NASA. 6. The supplier, Air Products and Chemicals, Inc., is a significant player in the industrial gas market.
Value Assessment
Rating: good
The contract value of $5.8 million over approximately five years for liquid nitrogen and oxygen appears reasonable given the specialized nature of industrial gases and the demanding requirements of NASA. Benchmarking against similar government contracts for industrial gases is challenging without more specific volume and purity data, but the price seems aligned with market rates for bulk industrial gas supply. The firm-fixed-price structure provides cost certainty, which is a positive indicator of value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 5 bids suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and ensures that the government receives a fair market price for the goods and services procured.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process that drives down costs and ensures that NASA is not overpaying for essential industrial gases.
Public Impact
NASA research facilities and astronaut support systems benefit from a reliable supply of liquid nitrogen and oxygen. These gases are critical for scientific experiments, maintaining controlled environments, and supporting life in space. The contract ensures operational continuity for NASA's missions, particularly those involving cryogenic materials or life support. The workforce at NASA facilities will have access to necessary materials for their research and development activities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price fluctuations in the industrial gas market over the five-year contract term.
- Dependence on a single supplier for critical gases could pose a risk if supply chain disruptions occur.
- Ensuring consistent purity and quality of gases to meet NASA's stringent scientific standards.
Positive Signals
- Awarded through full and open competition, indicating market availability and competitive pricing.
- Firm-fixed-price contract provides cost predictability and budget certainty for NASA.
- Long-term contract (over 5 years) ensures supply chain stability for critical operational needs.
- Supplier is a well-established company with significant experience in industrial gas production and distribution.
Sector Analysis
The industrial gas manufacturing sector is a mature and essential industry, providing critical inputs for a wide range of applications, including aerospace, healthcare, and manufacturing. NASA's procurement of liquid nitrogen and oxygen falls within this sector, specifically for high-purity applications supporting research and life support. The market is characterized by large, established players like Air Products and Chemicals, Inc., and competition often centers on reliability, purity, and logistical capabilities. Spending benchmarks for industrial gases can vary widely based on volume, purity, and delivery method, but this contract's value appears consistent with specialized government needs.
Small Business Impact
This contract does not appear to have a specific small business set-aside. However, the prime contractor, Air Products and Chemicals, Inc., may engage small businesses for subcontracting opportunities related to logistics, delivery, or specialized support services. The impact on the small business ecosystem would depend on the extent to which the prime contractor utilizes subcontracting, which is not detailed in the provided data.
Oversight & Accountability
Oversight for this contract will likely be managed by NASA's procurement and program management offices, ensuring adherence to contract terms, delivery schedules, and quality specifications. Accountability is established through the firm-fixed-price contract, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is facilitated by the public nature of federal contract awards, allowing for general oversight, though specific performance metrics may not be publicly disclosed.
Related Government Programs
- NASA Research and Development Contracts
- Aerospace Industrial Gas Supply
- Federal Cryogenic Material Procurement
- Industrial Gas Manufacturing Contracts
Risk Flags
- Potential for price volatility in the industrial gas market over the contract's duration.
- Supply chain disruption risk for critical gases.
- Ensuring consistent high purity for scientific applications.
Tags
industrial-gas, nasa, liquid-nitrogen, liquid-oxygen, full-and-open-competition, firm-fixed-price, aerospace, research-and-development, air-products-and-chemicals, pennsylvania, delivery-order, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $5.8 million to AIR PRODUCTS AND CHEMICALS, INC. THE PURPOSE OF THIS PROCUREMENT IS FOR LIQUID NITROGEN AND LIQUID OXYGEN.
Who is the contractor on this award?
The obligated recipient is AIR PRODUCTS AND CHEMICALS, INC.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $5.8 million.
What is the period of performance?
Start: 2024-07-19. End: 2029-06-30.
What is the historical spending pattern for liquid nitrogen and oxygen by NASA or similar agencies?
Historical spending data for liquid nitrogen and oxygen by NASA and comparable agencies like the Department of Defense (DoD) or the National Science Foundation (NSF) would provide valuable context. Analyzing past contracts, including their duration, value, and the number of bidders, can reveal trends in pricing, supplier reliability, and the typical scale of such procurements. For instance, if NASA has consistently awarded similar contracts in the $1-2 million annual range, the current $5.8 million over five years ($1.16 million annually) appears consistent. Conversely, a significant increase in spending could warrant further investigation into the reasons, such as expanded mission requirements or market price inflation. Without specific historical data, it's difficult to definitively assess if this contract represents an increase or decrease in spending for these critical gases.
How does the per-unit cost of industrial gases in this contract compare to market rates or other federal contracts?
Determining the precise per-unit cost benchmark is challenging without detailed specifications on the volume, purity, and delivery terms (e.g., bulk tanks, cylinders) for the liquid nitrogen and oxygen. However, the total contract value of $5.8 million over approximately 60 months (1807 days) suggests an average annual expenditure of about $1.16 million. Industrial gas prices are highly sensitive to these factors. For example, high-purity gases required for sensitive scientific research typically command a premium over standard industrial grades. Comparing this to publicly available market rate data or other federal contracts for similar quantities and specifications would be necessary for a robust benchmark. Given that Air Products and Chemicals, Inc. is a major supplier, the pricing is likely competitive within the industry, but a detailed unit-cost analysis against comparable federal procurements would offer a clearer picture of value for money.
What is the track record of Air Products and Chemicals, Inc. in supplying industrial gases to the federal government?
Air Products and Chemicals, Inc. has a substantial track record of supplying industrial gases to various federal agencies, including NASA and the Department of Defense. Their experience often involves providing gases for complex operations, research, and critical infrastructure. Government contract databases and performance reviews would typically indicate their history of on-time delivery, quality compliance, and responsiveness to government needs. As a large, established corporation, they generally possess the infrastructure and expertise to meet stringent federal requirements. However, a thorough assessment would involve reviewing past performance evaluations, any documented disputes or contract terminations, and their overall performance trends across multiple government contracts to ensure continued reliability and value.
What are the potential risks associated with a long-term (5-year) contract for industrial gases?
A significant risk with a long-term contract for industrial gases is potential price escalation beyond what might be experienced in a shorter-term or spot-market purchase, especially if market prices for raw materials or energy fluctuate significantly over the five-year period. Another risk is the potential for supplier dependency; if Air Products and Chemicals, Inc. faces production issues, supply chain disruptions, or logistical challenges, NASA's operations could be severely impacted. Furthermore, technological advancements in gas production or alternative materials could emerge during the contract term, making the contracted gases less optimal or more expensive relative to newer solutions. Ensuring robust contract clauses for quality control and performance standards is crucial to mitigate these risks.
How does the competition level (5 bidders) for this contract impact price discovery and value for taxpayers?
Having five bidders for this industrial gas contract indicates a healthy level of competition, which is generally beneficial for taxpayers. A larger number of bidders increases the likelihood that the government will receive competitive pricing, as companies vie to win the contract. This competitive pressure encourages suppliers to offer their best prices and terms. It also provides NASA with a clearer understanding of the fair market value for these gases, reducing the risk of overpayment. The competitive process helps ensure that taxpayer funds are used efficiently by securing the required gases at a reasonable cost, fostering a more transparent and accountable procurement environment.
Industry Classification
NAICS: Manufacturing › Basic Chemical Manufacturing › Industrial Gas Manufacturing
Product/Service Code: FUELS, LUBRICANTS, OILS, WAXES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1940 AIR PRODUCTS BLVD, ALLENTOWN, PA, 18106
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $5,825,021
Exercised Options: $5,825,021
Current Obligation: $5,825,021
Actual Outlays: $4,731,863
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 80KSC024DA013
IDV Type: IDC
Timeline
Start Date: 2024-07-19
Current End Date: 2029-06-30
Potential End Date: 2029-06-30 00:00:00
Last Modified: 2026-02-23
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