DHS awarded $25M for nonresidential building leasing in Virginia, with 3 bidders

Contract Overview

Contract Amount: $24,984,472 ($25.0M)

Contractor: CLP Industrial Properties LLC

Awarding Agency: Department of Homeland Security

Start Date: 2003-04-11

End Date: 2006-11-09

Contract Duration: 1,308 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: ADMINISTRATIVE (EXPLANATION OF TI AND BALANCES)

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $25.0 million to CLP INDUSTRIAL PROPERTIES LLC for work described as: ADMINISTRATIVE (EXPLANATION OF TI AND BALANCES) Key points: 1. The contract value of $24.98 million for leasing services appears reasonable given the duration and scope. 2. Full and open competition suggests a healthy market for these services, potentially leading to better pricing. 3. The fixed-price structure with economic price adjustment introduces some inflation risk. 4. This contract supports essential operational needs for the Transportation Security Administration. 5. The duration of over 3 years indicates a significant, long-term requirement. 6. The contract was awarded to CLP Industrial Properties LLC, a lessor of nonresidential buildings.

Value Assessment

Rating: good

The awarded amount of approximately $25 million over 1308 days (roughly 3.5 years) for nonresidential building leasing by the TSA is within a reasonable range for such services. Benchmarking against similar federal leases for commercial properties in Virginia would provide a more precise value-for-money assessment. The fixed-price with economic price adjustment (FPEPA) contract type allows for adjustments due to inflation, which is common in long-term real estate agreements but introduces some cost uncertainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. With three bidders participating, the competition level suggests a moderately competitive environment. This level of competition generally allows for price discovery and can help ensure that the government receives fair market value for the leased properties. The specific details of the bidding process and the number of proposals received would offer further insight into the intensity of the competition.

Taxpayer Impact: A competitive bidding process for leasing services helps ensure that taxpayer funds are used efficiently by driving down costs and encouraging providers to offer favorable terms. Three bidders suggest a reasonable level of market interest, which is generally positive for price negotiation.

Public Impact

The Transportation Security Administration (TSA) benefits from this contract by securing necessary facilities for its operations. The services delivered include the leasing of nonresidential buildings, likely for office space, operational hubs, or other support functions. The geographic impact is concentrated in Virginia, where the leased properties are located. This contract supports the real estate and property management sector, potentially benefiting local economies through property taxes and related services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs due to economic price adjustments if inflation rates are high.
Dependence on a single contractor for critical facility needs could pose a risk if performance issues arise.
The specific nature of leased space requirements might limit future flexibility if operational needs change significantly.

Positive Signals

Awarded under full and open competition, indicating a robust selection process.
The contract duration suggests a stable, long-term requirement being met.
The fixed-price element provides a baseline cost control, with adjustments for known economic factors.

Sector Analysis

This contract falls within the commercial real estate and property management sector, specifically focusing on the leasing of nonresidential buildings. The federal government is a significant consumer of leased real estate across various agencies. Comparable spending benchmarks would involve analyzing average lease rates for similar commercial properties in the Virginia region, considering factors like square footage, location, and amenities. The market size for federal real estate leasing is substantial, encompassing a wide range of property types and geographic locations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, CLP Industrial Properties LLC, may engage small businesses for ancillary services related to property management or maintenance, depending on their own subcontracting policies and the nature of the leased facilities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Homeland Security and the Transportation Security Administration contracting officers and program managers. They are responsible for ensuring compliance with contract terms, monitoring performance, and managing payments. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Federal Building and Fire Safety
Government Property Management
Real Estate Services
Lease of Nonresidential Buildings
Transportation Security Administration Operations

Risk Flags

Economic Price Adjustment Clause
Limited Number of Bidders

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $25.0 million to CLP INDUSTRIAL PROPERTIES LLC. ADMINISTRATIVE (EXPLANATION OF TI AND BALANCES)

Who is the contractor on this award?

The obligated recipient is CLP INDUSTRIAL PROPERTIES LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $25.0 million.

What is the period of performance?

Start: 2003-04-11. End: 2006-11-09.

What is the track record of CLP Industrial Properties LLC in performing federal contracts, particularly for leasing services?

Information regarding CLP Industrial Properties LLC's specific track record with federal contracts, especially for leasing services, is not detailed in the provided data snippet. A comprehensive assessment would require reviewing their past performance evaluations, contract history, and any reported disputes or awards. Federal procurement databases often contain contractor performance information that can shed light on their reliability, quality of service, and adherence to contract terms. Without this specific data, it's difficult to definitively assess their past performance in fulfilling similar government requirements.

How does the awarded price compare to market rates for similar commercial property leases in Virginia?

The provided data does not include specific details on the square footage, location within Virginia, or amenities of the leased properties, making a direct comparison to market rates challenging. However, the contract value of approximately $25 million over 1308 days suggests an average annual cost of roughly $7.5 million. To benchmark effectively, one would need to research average rental rates per square foot for comparable commercial office or operational space in the specific sub-markets within Virginia where these properties are located. Factors such as lease term, included services (e.g., maintenance, utilities), and building class significantly influence market rates.

What are the primary risks associated with the 'Fixed Price with Economic Price Adjustment' (FPEPA) contract type for this lease agreement?

The primary risk with an FPEPA contract for long-term leases is the potential for cost escalation due to inflation. While the fixed-price component provides a baseline, the economic price adjustment clause allows the contractor to seek increases in payment based on specified economic indicators, typically related to inflation. This introduces uncertainty for the government regarding the final cost of the lease over its duration. The government's risk is mitigated if the adjustment formula is well-defined and tied to objective economic data, but unforeseen spikes in inflation could lead to higher-than-budgeted expenditures.

What is the strategic importance of these leased facilities to the Transportation Security Administration's mission?

The strategic importance of these leased facilities to the TSA's mission is likely tied to providing essential operational infrastructure. This could include office space for administrative staff, command centers, training facilities, or staging areas for security personnel and equipment. Securing adequate and well-located facilities is crucial for the TSA to effectively carry out its mandate of ensuring the security of the nation's transportation systems. The duration of the contract (over 3 years) suggests these are not temporary needs but rather integral components of the TSA's ongoing operational footprint in Virginia.

How has federal spending on nonresidential building leases in Virginia trended over the past five years?

Analyzing the trend of federal spending on nonresidential building leases in Virginia over the past five years would require accessing historical federal procurement data. This would involve querying databases like FPDS or USAspending for contracts categorized under NAICS code 531120 (Lessors of Nonresidential Buildings) awarded by federal agencies within the state of Virginia. Such an analysis would reveal whether spending in this category has increased, decreased, or remained stable, potentially indicating shifts in federal real estate needs, budget allocations, or market conditions within the region.

What are the potential implications of having only three bidders for this leasing contract?

Having three bidders for this leasing contract suggests a moderately competitive market. While more bidders generally lead to more robust price competition and a wider range of options, three bidders still provide a basis for price discovery and comparison. It indicates that there are at least a few entities capable of meeting the government's requirements. However, it also raises questions about potential barriers to entry for other lessors or whether the market for such specialized leasing services in that specific geographic area is inherently limited. Further investigation into the nature of the requirements and the bidders themselves could clarify if this level of competition is optimal.

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: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Calwest Diversified

Address: 4701 CREEK RD STE 240, CINCINNATI, OH, 45242

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $70,530,471

Exercised Options: $70,530,471

Current Obligation: $24,984,472

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline