NIH Spends $235K Monthly on 5 Research Court Lease, Totaling $23.3M

Contract Overview

Contract Amount: $23,342,160 ($23.3M)

Contractor: Are-Maryland NO 24 LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2007-07-23

End Date: 2014-10-31

Contract Duration: 2,657 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: LABOR HOURS

Sector: Other

Official Description: JULY RENT 2007 FOR 5 RESEARCH COURT LRP0603121 @ $235,747.84 MONTHLY INV. NIH-2007-07 EIN: 1201341846A1

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $23.3 million to ARE-MARYLAND NO 24 LLC for work described as: JULY RENT 2007 FOR 5 RESEARCH COURT LRP0603121 @ $235,747.84 MONTHLY INV. NIH-2007-07 EIN: 1201341846A1 Key points: 1. The lease for 5 Research Court in Maryland represents a significant monthly expenditure for the NIH. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (over 7 years) indicates a long-term commitment to this facility. 4. The lessor, ARE-MARYLAND NO 24 LLC, is a private entity, not a small business.

Value Assessment

Rating: fair

The monthly rent of $235,747.84 for 5 Research Court appears to be within a reasonable range for commercial office space in the Maryland area, though specific comparable lease data for similar research facilities is needed for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which typically allows for the widest possible range of bidders and promotes price discovery. This method suggests that the government sought the best value through a competitive process.

Taxpayer Impact: Taxpayer funds are being used to lease this facility. While competition aims for fair pricing, the substantial monthly cost means a significant portion of taxpayer money is allocated to this lease over its duration.

Public Impact

Federal agencies rely on leased facilities for critical operations, impacting the real estate market. Long-term leases represent a stable revenue stream for property owners and developers. The cost of federal real estate leases can influence budget allocations for agency programs. Transparency in leasing contracts is crucial for public trust and accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for rent escalation over the contract term.
Lack of small business participation in the contract.
Dependency on a single lessor for a critical facility.

Positive Signals

Awarded under full and open competition.
Long contract duration provides stability.
Clear identification of the lessor and agency.

Sector Analysis

The lease falls under the 'Lessors of Nonresidential Buildings' sector. Federal real estate leasing is a common practice across many agencies to secure necessary operational space, with costs varying significantly based on location, size, and facility type.

Small Business Impact

The lessor, ARE-MARYLAND NO 24 LLC, is not identified as a small business. This contract does not appear to have specific provisions or set-asides for small business participation.

Oversight & Accountability

The contract was awarded by the Department of Health and Human Services, National Institutes of Health. Standard procurement regulations and oversight mechanisms would apply to ensure compliance and proper use of funds.

Related Government Programs

Lessors of Nonresidential Buildings (except Miniwarehouses)
Department of Health and Human Services Contracting
National Institutes of Health Programs

Risk Flags

High monthly expenditure.
Long-term commitment without clear exit strategy.
Potential for unmitigated rent increases.
Lack of transparency on specific use of facility.
No indication of small business utilization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $23.3 million to ARE-MARYLAND NO 24 LLC. JULY RENT 2007 FOR 5 RESEARCH COURT LRP0603121 @ $235,747.84 MONTHLY INV. NIH-2007-07 EIN: 1201341846A1

Who is the contractor on this award?

The obligated recipient is ARE-MARYLAND NO 24 LLC.

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 $23.3 million.

What is the period of performance?

Start: 2007-07-23. End: 2014-10-31.

What is the total cost of the lease over its entire duration, and how does this compare to the cost of purchasing a similar facility?

The total cost of the lease, based on the monthly rent of $235,747.84 and a duration of 2657 days (approximately 7.28 years), amounts to roughly $20.5 million. A comparative analysis with the purchase cost of a similar facility would require detailed market data on property values and ownership costs, which is not provided here.

Are there any clauses in the lease agreement that allow for rent adjustments or escalations over the contract period?

The provided data does not specify the terms regarding rent adjustments or escalations. Typically, long-term leases may include provisions for annual increases based on market rates or a fixed percentage. Further review of the full contract document would be necessary to determine if such clauses exist and their potential impact on the total cost.

What specific research or operational needs does this leased facility fulfill for the NIH?

The data indicates the leased property is '5 Research Court' and the lessor is involved in 'Lessors of Nonresidential Buildings'. While the agency is the National Institutes of Health, the specific research or operational functions housed at this location are not detailed in the provided information. Understanding the necessity of this space is key to evaluating its value.

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: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 9800 MEDICAL CENTER DRIVE, ROCKVILLE, MD, 20850

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,342,160

Exercised Options: $23,342,160

Current Obligation: $23,342,160

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline