HHS awarded $22.5M for hospital services, with a monthly rent of over $100K for a Maryland facility

Contract Overview

Contract Amount: $22,508,267 ($22.5M)

Contractor: Harbor Hospital, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2007-06-27

End Date: 2018-09-30

Contract Duration: 4,113 days

Daily Burn Rate: $5.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: LRP080199 HARBOR HOSPITAL 3001 S HANOVER STREET JUNE 2007 RENT $100,117.63 MONTHLY 152049166001 MAIN HSP-HABOR HSP C/O MEDSTAR HEALTH

Place of Performance

Location: BROOKLYN, BALTIMORE CITY County, MARYLAND, 21225

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $22.5 million to HARBOR HOSPITAL, INC. for work described as: LRP080199 HARBOR HOSPITAL 3001 S HANOVER STREET JUNE 2007 RENT $100,117.63 MONTHLY 152049166001 MAIN HSP-HABOR HSP C/O MEDSTAR HEALTH Key points: 1. The contract value of $22.5 million over its life suggests a significant investment in healthcare infrastructure. 2. The firm fixed-price contract type indicates that costs were established upfront, potentially limiting cost overruns. 3. The duration of over 11 years (4113 days) points to a long-term need for these hospital services. 4. The contract was awarded through full and open competition, suggesting a robust bidding process. 5. The primary service area is Maryland, indicating a localized impact for this federal spending. 6. The North American Industry Classification System (NAICS) code 531120 points to lessors of nonresidential buildings, suggesting the contract may involve leasing space.

Value Assessment

Rating: fair

The total contract value of $22.5 million over approximately 11 years averages to about $2 million per year. The monthly rent of $100,117.63 for the facility, totaling $1.2 million annually, represents a substantial portion of the overall contract cost. Benchmarking this against similar healthcare facility leases or service contracts would be necessary for a precise value-for-money assessment. However, the fixed-price nature provides some cost certainty.

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 bids. The presence of 3 bidders (no) suggests a moderate level of competition for this contract. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through a competitive bidding process, leading to potentially lower overall costs for the services rendered.

Public Impact

The primary beneficiary is likely the Department of Health and Human Services (HHS) and its associated agencies, such as the National Institutes of Health (NIH), which awarded the contract. The services delivered are related to the leasing of nonresidential buildings, specifically a hospital facility, suggesting support for healthcare operations or research. The geographic impact is concentrated in Maryland (MD), specifically at 3001 S Hanover Street. Workforce implications could include employment opportunities for healthcare professionals, administrative staff, and support personnel at the facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 11 years) could lead to potential price increases over time if not managed effectively.
Dependence on a single lessor for a critical facility could pose a risk if the lessor faces financial or operational difficulties.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive environment that should yield reasonable pricing.
Awarded by a major health agency (HHS/NIH) implies alignment with national health priorities.

Sector Analysis

This contract falls within the Healthcare sector, specifically related to the provision or leasing of healthcare facilities. The NAICS code 531120 (Lessors of Nonresidential Buildings) indicates a focus on real estate and facility management within the healthcare context. Comparable spending benchmarks would involve analyzing other federal contracts for hospital leases or facility management services, particularly those awarded by HHS or other health-focused agencies.

Small Business Impact

The contract details do not indicate any specific small business set-asides (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if Harbor Hospital, Inc. or its affiliates engage in such arrangements. Without explicit set-aside goals, direct benefits to small businesses are not guaranteed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS), likely managed by the National Institutes of Health (NIH). Accountability measures would be defined by the contract terms and conditions, including performance standards and reporting requirements. Transparency is facilitated by the contract's public availability, allowing for scrutiny of its terms and value.

Related Government Programs

Federal Healthcare Facility Leases
HHS Real Estate Management
NIH Research Facilities
Nonresidential Building Leases

Risk Flags

Long-term contract duration
Potential for market shifts impacting facility value
Lessor financial stability risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $22.5 million to HARBOR HOSPITAL, INC.. LRP080199 HARBOR HOSPITAL 3001 S HANOVER STREET JUNE 2007 RENT $100,117.63 MONTHLY 152049166001 MAIN HSP-HABOR HSP C/O MEDSTAR HEALTH

Who is the contractor on this award?

The obligated recipient is HARBOR HOSPITAL, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $22.5 million.

What is the period of performance?

Start: 2007-06-27. End: 2018-09-30.

What is the track record of Harbor Hospital, Inc. as a federal contractor?

Information regarding Harbor Hospital, Inc.'s specific track record as a federal contractor is limited based solely on this contract data. This contract, awarded in 2007 and ending in 2018, represents a significant engagement with the federal government, particularly with HHS. To fully assess their track record, one would need to examine other contracts awarded to this entity, including their performance history, any past performance issues, and their overall compliance with federal acquisition regulations. A deeper dive into contract databases like FPDS or SAM.gov would be necessary to identify any other federal awards and their associated performance metrics.

How does the monthly rent of $100,117.63 compare to market rates for similar healthcare facilities in Maryland?

A direct comparison of the monthly rent of $100,117.63 to market rates for similar healthcare facilities in Maryland requires detailed market analysis. Factors such as facility size, condition, specific amenities (e.g., specialized medical equipment, number of beds), location within Maryland, and lease terms (e.g., full-service lease vs. gross lease) significantly influence rental prices. Without access to current commercial real estate data specific to healthcare properties in the relevant sub-market of Maryland, it is difficult to definitively benchmark this rate. However, given the substantial annual rent of over $1.2 million, it represents a significant cost that would warrant thorough due diligence against prevailing market conditions at the time of contract award and throughout its duration.

What are the potential risks associated with a long-term (11+ year) lease for a healthcare facility?

Long-term leases for healthcare facilities, such as this 11+ year contract, present several potential risks. Firstly, market conditions for healthcare services and real estate can change significantly over such a long period, potentially making the leased space less suitable or more expensive relative to alternatives. Secondly, technological advancements in medical equipment and treatment protocols might necessitate facility upgrades or changes that are not easily accommodated within a fixed lease agreement. Thirdly, the financial stability of the lessor (Harbor Hospital, Inc.) is a critical consideration; any financial distress on their part could disrupt essential services. Lastly, changes in federal healthcare policy or agency needs could lead to a reduced requirement for the facility, resulting in underutilization and wasted expenditure.

How effective is a firm fixed-price contract for managing costs in healthcare facility leases?

A firm fixed-price (FFP) contract is generally considered effective for managing costs in healthcare facility leases, especially when the scope of work and associated costs are well-defined and predictable. In this case, the monthly rent is fixed, providing the government with cost certainty for that component of the contract. This structure shifts the risk of cost overruns to the contractor. However, the effectiveness is contingent on the initial price being fair and reasonable. If the initial price was set too high, the government might end up paying a premium throughout the contract's life. For services beyond simple leasing, such as maintenance or utilities, an FFP contract might be less adaptable to unforeseen operational cost fluctuations.

What does the number of bidders (3) suggest about the competition for this specific healthcare facility contract?

A total of 3 bidders for this healthcare facility contract suggests a moderate level of competition. While more than a sole-source or limited competition scenario, it indicates that the market for providing such specialized facilities might not be exceptionally broad, or that the specific requirements of the solicitation may have narrowed the field. A higher number of bidders (e.g., 5+) typically leads to more robust price discovery and potentially lower prices for the government. Conversely, only 3 bidders could imply that the contract requirements were complex, the geographic scope limited, or that potential competitors were hesitant due to other market factors. This level of competition is generally considered adequate but could potentially be improved in future solicitations.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3001 S HANOVER ST, BALTIMORE, MD, 21225

Business Categories: Category Business, Corporate Entity Tax Exempt, Hospital, Nonprofit Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $22,508,267

Exercised Options: $22,508,267

Current Obligation: $22,508,267

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline