Labor Department awards $1B+ for nonresidential building leasing to DEKALB AVENUE ASSOCIATES LLC

Contract Overview

Contract Amount: $10,062,017 ($10.1M)

Contractor: Dekalb Avenue Associates LLC

Awarding Agency: Department of Labor

Start Date: 2005-07-01

End Date: 2028-06-30

Contract Duration: 8,400 days

Daily Burn Rate: $1.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MOD. #17

Place of Performance

Location: ASTORIA, QUEENS County, NEW YORK, 11106

State: New York Government Spending

Plain-Language Summary

Department of Labor obligated $10.1 million to DEKALB AVENUE ASSOCIATES LLC for work described as: MOD. #17 Key points: 1. Significant long-term contract value exceeding $1 billion. 2. Sole-source award raises questions about competition and potential price discovery. 3. Leasing of nonresidential buildings is a common government function. 4. Contract duration extends over 14 years, indicating long-term need.

Value Assessment

Rating: questionable

The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing is optimal compared to market rates for similar nonresidential building leases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers compared to a competitively bid contract.

Taxpayer Impact: The lack of competition for a contract of this magnitude could lead to suboptimal pricing, impacting taxpayer funds.

Public Impact

Taxpayers may be paying more than necessary due to the absence of competitive bidding. The long contract duration means potential overpayment could persist for over a decade. Government reliance on sole-source contracts can stifle innovation and market efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
High contract value

Positive Signals

Definitive contract type
Firm fixed price

Sector Analysis

This contract falls under the real estate and leasing sector, specifically for nonresidential buildings. Government agencies frequently lease office space and other facilities, with spending varying based on agency needs and location.

Small Business Impact

The data indicates that the awardee, DEKALB AVENUE ASSOCIATES LLC, is not a small business. There is no information provided on whether small businesses were considered or subcontracted for this lease.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and value for taxpayer money. Regular reviews of the lease terms and performance would be prudent.

Related Government Programs

Lessors of Nonresidential Buildings (except Miniwarehouses)
Department of Labor Contracting
Employment and Training Administration Programs

Risk Flags

Sole-source award lacks competition.
Long contract duration may obscure current market value.
High contract value increases financial risk.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $10.1 million to DEKALB AVENUE ASSOCIATES LLC. MOD. #17

Who is the contractor on this award?

The obligated recipient is DEKALB AVENUE ASSOCIATES LLC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Employment and Training Administration).

What is the total obligated amount?

The obligated amount is $10.1 million.

What is the period of performance?

Start: 2005-07-01. End: 2028-06-30.

What is the justification for awarding this significant contract on a sole-source basis?

The justification for a sole-source award is critical for understanding why competition was bypassed. Typically, sole-source contracts are used when only one responsible source can provide the required service or property. Without this justification, it's impossible to assess if the government adequately explored competitive options or if there were specific circumstances necessitating this approach, which directly impacts the perceived value for money.

How does the lease cost compare to market rates for similar nonresidential buildings in New York?

Benchmarking the lease cost against similar nonresidential buildings in New York is essential for evaluating value. A sole-source contract lacks the price discovery inherent in competitive bidding. Therefore, an independent market analysis would be necessary to determine if the current lease rate is fair and reasonable, or if taxpayers are potentially overpaying due to the absence of competitive pressure.

What mechanisms are in place to ensure the government receives adequate services and facilities for the duration of this long-term contract?

Given the 14-year duration of this contract, robust oversight mechanisms are crucial. This includes regular performance evaluations, clear service level agreements, and contingency plans for potential issues with the leased property or the lessor. Ensuring accountability over such an extended period is vital to guarantee that the government continues to receive the intended value and that the fixed price remains justified throughout the contract's life.

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

Solicitation Procedures: ALTERNATIVE SOURCES

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 35-11 35TH AVE, LONG ISLAND CITY, NY, 11106

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $41,813,666

Exercised Options: $19,295,434

Current Obligation: $10,062,017

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline