DOE's $13.9M Nevada Property Lease Awarded to Howard Hughes Corp. Under Full and Open Competition
Contract Overview
Contract Amount: $13,905,133 ($13.9M)
Contractor: Howard Hughes Corporation, the
Awarding Agency: Department of Energy
Start Date: 1999-11-15
End Date: 2011-10-31
Contract Duration: 4,368 days
Daily Burn Rate: $3.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: LEASE FOR PROPERTY AT 1551 HILLSHIRE DRIVE
Place of Performance
Location: LAS VEGAS, CLARK County, NEVADA, 89134
State: Nevada Government Spending
Plain-Language Summary
Department of Energy obligated $13.9 million to HOWARD HUGHES CORPORATION, THE for work described as: LEASE FOR PROPERTY AT 1551 HILLSHIRE DRIVE Key points: 1. The Department of Energy (DOE) leased property for $13.9 million over 12 years. 2. The contract was awarded to The Howard Hughes Corporation. 3. Competition was full and open, suggesting a competitive bidding process. 4. The sector is commercial real estate, specifically nonresidential building leasing.
Value Assessment
Rating: fair
The lease duration is over 12 years, which is a significant commitment. Without comparable lease data for similar properties in Nevada, assessing the pricing against market benchmarks is difficult. The firm fixed price suggests cost certainty for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method is generally expected to yield competitive pricing and best value for the government.
Taxpayer Impact: The firm fixed price contract provides budget predictability. However, the long duration means taxpayers are committed to this cost over an extended period, regardless of potential future market fluctuations.
Public Impact
Taxpayers funded a long-term lease for government operations in Nevada. The lease supported the Department of Energy's mission in the region. The use of a large commercial entity as a lessor raises questions about potential economies of scale for government needs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long lease duration (over 12 years)
- Lack of specific per-unit cost data for benchmarking
Positive Signals
- Full and open competition utilized
- Firm fixed price contract for cost certainty
Sector Analysis
The sector involves leasing nonresidential buildings, a common government procurement need. Benchmarking requires comparison to similar commercial lease rates in the specific geographic area, considering property type, size, and amenities.
Small Business Impact
The lessor is The Howard Hughes Corporation, a large commercial entity. There is no indication that small businesses were involved as subcontractors or partners in this specific lease agreement.
Oversight & Accountability
The contract was awarded under full and open competition, which implies a structured procurement process. However, the long duration warrants periodic review to ensure continued value and alignment with agency needs.
Related Government Programs
- Lessors of Nonresidential Buildings (except Miniwarehouses)
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Long-term commitment (over 12 years)
- Lack of detailed cost breakdown or per-unit analysis
- Potential for price escalation or market misalignment over lease duration
- No explicit mention of small business participation
Tags
lessors-of-nonresidential-buildings-exce, department-of-energy, nv, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $13.9 million to HOWARD HUGHES CORPORATION, THE. LEASE FOR PROPERTY AT 1551 HILLSHIRE DRIVE
Who is the contractor on this award?
The obligated recipient is HOWARD HUGHES CORPORATION, THE.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $13.9 million.
What is the period of performance?
Start: 1999-11-15. End: 2011-10-31.
What was the specific purpose of the leased property and how did it align with DOE's mission in Nevada?
The provided data does not specify the exact purpose of the leased property at 1551 Hillshire Drive. Understanding the function (e.g., office space, research facility, storage) is crucial for assessing its strategic importance to the Department of Energy's operations in Nevada and whether the lease terms adequately supported those needs.
Were there any performance metrics or service level agreements included in the lease to ensure the property met DOE's operational requirements?
The data indicates a firm fixed price lease agreement but does not detail specific performance metrics or service level agreements. For a long-term lease, it is essential that the contract includes provisions for property maintenance, security, and adherence to any specific operational requirements of the Department of Energy to ensure the facility remains suitable and functional throughout the lease period.
How did the final negotiated price compare to the initial estimated value or market rates at the time of award?
The data provides the awarded amount ($13.9 million) but not the initial estimate or detailed market rate analysis. While full and open competition was used, a comparison to prevailing market rates for similar nonresidential buildings in Nevada during November 1999 would be necessary to definitively assess if the negotiated price represented optimal value for the taxpayer.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Growth Properties, Inc. (UEI: 803033943)
Address: 10000 W CHARLESTON BLVD STE 200, LAS VEGAS, NV, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $13,361,605
Exercised Options: $13,361,605
Current Obligation: $13,905,133
Timeline
Start Date: 1999-11-15
Current End Date: 2011-10-31
Potential End Date: 2011-10-31 00:00:00
Last Modified: 2014-07-28
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