Commerce's NIST awards $3.9M for JEOL instrument maintenance, a sole-source purchase order

Contract Overview

Contract Amount: $3,920,490 ($3.9M)

Contractor: Jeol USA, Inc.

Awarding Agency: Department of Commerce

Start Date: 2020-10-01

End Date: 2025-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $2.1K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: MAINTENANCE ON JEOL INSTRUMENTS

Place of Performance

Location: PEABODY, ESSEX County, MASSACHUSETTS, 01960

State: Massachusetts Government Spending

Plain-Language Summary

Department of Commerce obligated $3.9 million to JEOL USA, INC. for work described as: MAINTENANCE ON JEOL INSTRUMENTS Key points: 1. Value for money is difficult to assess due to the sole-source nature of the award. 2. Competition dynamics are absent, as the contract was not competed. 3. Risk indicators include potential overpricing and lack of market validation. 4. Performance context is limited to instrument maintenance, with no specific metrics provided. 5. Sector positioning is within analytical laboratory instrument manufacturing, a specialized niche.

Value Assessment

Rating: questionable

This $3.9 million purchase order for JEOL instrument maintenance was awarded on a sole-source basis, making direct value-for-money comparisons challenging. Without competitive bidding, it's difficult to benchmark pricing against market rates or assess if the government secured the best possible terms. The fixed-price nature provides some cost certainty, but the lack of competition raises concerns about potential overpayment compared to what might have been achieved in a more open market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, as indicated by 'NOT COMPETED UNDER SAP'. The award was made directly to JEOL USA, INC., suggesting a sole-source justification was likely applied. The absence of competition means there were no other bidders to compare against, and price discovery was not facilitated through a bidding process.

Taxpayer Impact: Taxpayers may not have received the most competitive pricing due to the lack of a bidding process. The government did not benefit from the potential cost savings that competition typically drives.

Public Impact

The National Institute of Standards and Technology (NIST) benefits from continued maintenance of critical laboratory instruments. Essential analytical services supported by these instruments can proceed without interruption. The geographic impact is primarily within Massachusetts, where the contractor is located. Workforce implications are minimal, likely involving specialized technicians for maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential savings.
Lack of transparency in the justification for sole-source procurement.
Potential for vendor lock-in with specialized instrument maintenance.

Positive Signals

Ensures continued operation of critical scientific instruments.
Fixed-price contract provides some budget predictability.
Contract awarded to the original equipment manufacturer, likely possessing specialized knowledge.

Sector Analysis

The contract falls within the Analytical Laboratory Instrument Manufacturing sector, specifically focusing on maintenance services for JEOL instruments. This is a specialized area where original equipment manufacturers often hold significant expertise and market share for servicing their own products. Benchmarking spending in this niche is difficult without more specific data on comparable maintenance contracts for similar high-value scientific equipment.

Small Business Impact

This contract does not appear to involve small business set-asides, as the award is to JEOL USA, INC., a known entity in the instrument manufacturing space. There is no indication of subcontracting opportunities for small businesses within this specific purchase order. The focus is on specialized maintenance provided by the original equipment manufacturer.

Oversight & Accountability

Oversight for this purchase order would typically fall under the Department of Commerce's internal financial management and procurement regulations. As a sole-source award, it may be subject to higher scrutiny to ensure the justification was appropriate. Transparency is limited by the nature of the award, and specific Inspector General jurisdiction would depend on broader audit plans for NIST or the Department of Commerce.

Related Government Programs

Federal Agency Scientific Equipment Maintenance
National Institute of Standards and Technology Operations
Analytical Laboratory Instrument Services
Sole-Source Procurement Justifications

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $3.9 million to JEOL USA, INC.. MAINTENANCE ON JEOL INSTRUMENTS

Who is the contractor on this award?

The obligated recipient is JEOL USA, INC..

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Institute of Standards and Technology).

What is the total obligated amount?

The obligated amount is $3.9 million.

What is the period of performance?

Start: 2020-10-01. End: 2025-09-30.

What is the track record of JEOL USA, INC. in providing maintenance services to federal agencies?

JEOL USA, INC. is the manufacturer of JEOL scientific instruments, which are widely used in research and analytical laboratories. Their track record in providing maintenance services to federal agencies is likely tied to the specific instruments they have sold to various government entities, including NIST. As the original equipment manufacturer (OEM), they possess the proprietary knowledge, specialized tools, and trained technicians necessary for the upkeep of their complex machinery. Federal agencies often rely on OEMs for maintenance, especially for highly specialized or critical equipment, to ensure optimal performance and longevity. However, the cost-effectiveness of OEM maintenance compared to third-party or in-house options can vary, and agencies must carefully consider pricing and service level agreements.

How does the value of this contract compare to similar instrument maintenance contracts?

Direct comparison of this $3.9 million contract for JEOL instrument maintenance is challenging due to its sole-source nature and the specific duration (five years). Without competitive bids, it's difficult to establish a market-based price. However, the cost per year is approximately $784,000. To benchmark, one would need to identify similar maintenance contracts for comparable high-end analytical instruments (e.g., electron microscopes, mass spectrometers) from other manufacturers awarded through competitive processes. Factors like the number and type of instruments covered, the scope of services (preventive vs. corrective maintenance, response times), and the specific technological sophistication of the equipment would be crucial for a meaningful comparison. The absence of competition here suggests potential for higher costs than might be achieved in a more open market.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract are related to cost and competition. Firstly, the lack of competition means NIST may be paying a premium price for maintenance services, as JEOL USA, INC. faced no pressure to offer the lowest possible cost. Secondly, there's a risk of vendor lock-in; NIST may become dependent on JEOL for maintenance, potentially limiting future flexibility or negotiation power. Thirdly, without competitive benchmarking, it's difficult to ascertain if the service levels provided are truly aligned with industry best practices or if the scope of work is appropriately defined. Finally, the justification for the sole-source award itself could be a risk if it was not adequately documented or if alternative solutions were overlooked.

How effective is NIST in managing its instrument maintenance contracts?

Assessing the overall effectiveness of NIST's management of instrument maintenance contracts based solely on this one award is difficult. This specific contract's effectiveness hinges on whether the instruments are consistently maintained, operational, and performing to required specifications throughout the contract period. NIST, as a leading scientific research organization, likely has established internal processes for contract oversight, performance monitoring, and technical evaluation. However, the sole-source nature of this award limits the ability to judge effectiveness through the lens of competitive procurement. Future analysis could involve reviewing NIST's performance metrics for this contract, user feedback from NIST scientists, and comparisons with other NIST maintenance contracts awarded through different procurement methods.

What are the historical spending patterns for JEOL instrument maintenance at NIST or similar agencies?

Historical spending patterns for JEOL instrument maintenance at NIST or similar agencies are not detailed in the provided data. To analyze this, one would need access to historical contract databases (like FPDS-NG) to search for previous awards to JEOL USA, INC. or other vendors for similar maintenance services. Key metrics to track would include the total amount spent annually, the number of contracts awarded, the duration and type of contracts (e.g., competitive vs. sole-source), and the specific instruments covered. Understanding these patterns would reveal trends in spending, identify periods of increased or decreased investment in maintenance, and highlight any shifts in procurement strategies (e.g., a move towards or away from sole-source awards).

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Analytical Laboratory Instrument Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 1333ND20QNB680304

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11 DEARBORN RD, PEABODY, MA, 01960

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $8,302,735

Exercised Options: $7,246,520

Current Obligation: $3,920,490

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline